P&G Descendants Call on Shareholders to Vote Against Board Members Over Forest Destruction Policies
NEW YORK – Descendants of the founders of Procter & Gamble (P&G) are urging their fellow shareholders to vote against current members of the board of directors, due to the company’s failure to address unsustainable sourcing of wood pulp and palm oil from climate-critical forests in the Canadian boreal and southeast Asia. Environmental advocacy organizations NRDC (Natural Resources Defense Council), Rainforest Action Network (RAN), and Friends of the Earth US all support the recommendation.
In a letter that the descendants directed to P&G’s shareholders and filed as an exempt solicitation with the Securities and Exchange Commission (SEC), they write: “We take pride in Procter & Gamble’s history of being a socially progressive leader by offering employees stock options in 1903, and by promoting gender diversity amongst its management positions beginning in the 90s. We are inextricably tied to the company, and are invested, beyond the literal sense, in P&G maintaining a reputation of leadership among its peers and delivering on being a ‘Force for Good.’ Unfortunately, our experience in recent years has led us to believe that the company may be failing to deliver on this pledge and falling behind its peers, creating significant financial risk.”
The descendants of both founders, William Procter and James Gamble, urged investors to vote against four current members of the Board at its October 10 Annual General Meeting: CEO and Board Chair Jon Moeller, Lead Director Joe Jimenez, Governance and Public Responsibility Committee Chair Angela Braly, and longest-serving board member Patricia Woertz. The exempt solicitation makes the case that these board members have failed to provide the leadership needed to respond to overwhelming shareholder demand that P&G align its forest sourcing with the urgency of the climate and biodiversity crises, exposing the company to significant risk.
At P&G’s 2020 annual meeting, two-thirds of voting shareholders urged the company to increase the scale, pace, and rigor with which it addresses environmental and social harms linked to its sourcing of pulp and palm oil. Yet P&G leadership has taken insufficient action since that vote. Additionally, following a complaint filed by NRDC, the company now faces the prospect of SEC scrutiny for misleading shareholders regarding its wood pulp sourcing practices.
“Three years after the passage of a landmark shareholder proposal, P&G has fallen even more out of step with its competitors in addressing forest and human rights risks. In a rapidly shifting policy landscape wherein governments are taking major steps to hold companies accountable for their contributions to deforestation, forest degradation, and human rights abuses, P&G’s inaction puts the company at risk of not only losing market share but also facing significant regulatory consequences. All the while, the real world costs of P&G’s current sourcing continue to drive rampant habitat loss, human rights abuses, and increased climate emissions,” said Shelley Vinyard, NRDC’s Boreal Corporate Campaign Director. (See Shelley’s blog here.)
“Time and time again, decision makers at P&G have been shown concrete evidence of the company’s complicity in rainforest destruction, Indigenous rights violations and illegal palm oil production, including inside a protected wildlife reserve in Indonesia,” said Gemma Tillack, Forest Policy Director with Rainforest Action Network (RAN). “In response to these scandals, P&G has failed to eliminate problematic suppliers, displaying an alarming level of irresponsibility as a corporate actor and exposing itself to regulatory and economic risks.”
“After a summer of devastating fires and unprecedented heat, we cannot afford to follow P&G down the corporate-trodden path of destructive production and consumption,” said Gaurav Madan, Senior Forest and Land Rights Campaigner at Friends of the Earth U.S. “P&G continues to source from conflict palm oil companies that are stealing communities’ lands in Indonesia and decimating the world’s last standing forests. Despite its rhetoric, P&G has not meaningfully addressed the widespread environmental and human rights violations in its supply chains. This Fall investors should vote against company directors due to their ongoing failure to shift P&G’s business model.”
Background:
Longstanding concerns about P&G’s forest sourcing for wood pulp supply from the boreal forest of Canada and palm oil sourcing from suppliers driving deforestation in tropical rainforests are galvanizing shareholder engagement. A detailed investor brief analyzes P&G’s latest policy language and statements to investors reflecting the company’s longstanding intransigence to mitigate risk associated with the environmental and human rights impacts of its supply chains. Key issues of concern are summarized below.
P&G’s wood pulp supply chain in boreal forest of Canada:
NRDC’s report, Issue with Tissue 2022, highlights that P&G, America’s top toilet paper maker, continues to make Charmin with large volumes of wood pulp from the climate-critical Canadian boreal forest. However, the marketplace is shifting toward sustainability, driven by growing consumer interest in purchasing toilet paper and tissue brands that are not complicit in clearcutting the last forests untouched by industrial logging.
The boreal forest is essential in the fight against climate change, holding more than 300 billion tons of climate-altering carbon – twice as much carbon as the world’s oil reserves – in its soils, plants, and wetlands. The boreal is the homeland of hundreds of Indigenous communities and vital habitat for threatened species. More than 1 million acres of the Canadian boreal forest are clear-cut each year – in part to make the ultimate disposable, single-use item: toilet paper. Toilet paper made with recycled content has one-third the carbon footprint of toilet paper made from trees.
P&G’s palm oil sourcing from tropical rainforests:
P&G sources palm oil and palm kernel oil from over a thousand mills in Indonesia and Malaysia, many of which are credibly linked to ongoing land rights abuses, the destruction of lowland rainforests and peatlands and suppliers operating illegal plantations in Indonesia. According to recent reports from Rainforest Action Network, P&G continues to do business with the Royal Golden Eagle Group and Harita Group––which are two of the most controversial corporations in forest commodity sectors in Indonesia. Following the publication of a March 2022 report detailing land grabbing, environmental pollution, and violence against environmental human rights defenders by AAL, P&G commissioned an independent verification assessment of the allegations which broadly affirmed numerous violations by AAL. P&G proceeded to suspend supply from three AAL subsidiaries, while continuing to source from AAL as a whole. P&G has since stopped its direct engagement with AAL, while conflicts persist; and it remains unclear what the company is doing to address communities’ longstanding grievances and seek remedy for harm done.
NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law, and people power to confront the climate crisis, protect public health, and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, Beijing and Delhi (an office of NRDC India Pvt. Ltd). Visit us at www.nrdc.org and follow us on Twitter @NRDC.
Rainforest Action Network preserves forests, protects the climate and upholds human rights by challenging corporate power and systemic injustice through frontline partnerships and strategic campaigns. RAN works toward a world where the rights and dignity of all communities are respected and where healthy forests, a stable climate and wild biodiversity are protected and celebrated. Visit us at www.ran.org
Friends of the Earth fights to create a more healthy and just world. Our current campaigns focus on promoting clean energy and solutions to climate change, ensuring the food we eat and products we use are safe and sustainable, and protecting marine ecosystems and the people who live and work near them.