P&G leadership disappointed investors in forest protection

In October 2020, the shareholders of Procter & Gamble massively called on the consumer goods juggernaut to address its role in the loss of climate-critical forests. In the two years that followed, the world changed. The international community has further strengthened primary forests as a vital pillar in the fight against climate change. Policy makers have introduced legislation to align global markets with the protection of irreplaceable forests. Due Diligence Standards and consumer expectations for corporate sustainability have become more stringent. And nations and communities in the world have rolled up under the rising tide climate chaos.

P&G, meanwhile, got stuck in another era.

Clearcutting in Ontario

In a massive failure by corporate management, P&G sidestepped calls from its investors to significantly stem the devastating impact of its wood pulp and palm oil supply chains on forests, the climate and human rights. Instead, toilet paper producer Charmin and other forest-destroying brands provided a masterclass in the industry, delivering empty ads, spurious talking points and even new forms of climate denial. Investor calls for P&G to disclose its impacts on forests and shine a light on ways to address them have instead revealed how ill-suited the company’s leadership is to guide the company through a changing climate and to face the realities – and the opportunities – of a changing market.

Now the NRDC, Friends of the Earth and Rainforest Action Network are ask the shareholders to hold P&G management accountable for the environmental and human rights record still wrapped in every roll of Charmin and bottled in every jar of Tide – and for the market, regulatory and reputational risk to investors due to P&G’s outdated and irresponsible approach. In a recent filing with the Securities & Exchange Commission (SEC), NRDC and its partners urged P&G shareholders to vote against the re-election of the three key members of the company’s board of directors most directly responsible for these failures: Chairman and CEO Jon Moeller, Angela Braly, Chair of the Governance and Public Accountability Committee, and Patricia Woertz.

As NRDC pointed out in a brief to P&G investors, over the past two years the company’s response to the shareholder resolution has been largely cosmetic, failing to meaningfully address the impact of the company’s sourcing on climate-critical forests like Canada’s boreal forest.

Most notably, P&G has not made time-bound commitments to end its sourcing from never-before-harvested primary, carbon-rich, biodiversity-rich forests that international scientists, including the Expert Panel Intergovernmental Panel on Climate Change (IPCC), highlighted. as essential to averting catastrophic climate change and adapting to a changing world. While P&G has recently expressed an ambition to reduce its primary impact on the forest, this falls well short of a real commitment – and P&G has no timeline to achieve this. In fact, in the same breath, P&G appears to be tempering all expectations, indicating that it has no way to achieve even its more modest ambition of eliminating sourcing from Intact Forest Landscapes (IFL), a subcategory of primary forests.

P&G has also done surprisingly little to prepare for this primary forestry ambition. In its announcement on primary forests, P&G laments the lack of comprehensive maps of Canada’s primary forests, a lack of information it offers as an excuse for not providing more concrete action. However, P&G declined to set time-limited commitments even for well-mapped regions, including critical boreal caribou habitat and IFLs. Moreover, the fact that P&G does not have a complete mapping of the primary forest is due to the company’s complacency, not a scientific shortcoming. The data to create these maps exists. For a small slice of $115 million it spent in 2021 to advertise Charmin alone, P&G could have those cards in hand and start laying out a plan.

Pulp mill in Ontario

Instead, two years later, P&G still cannot report to its investors the extent of its impact on primary forests.

Meanwhile, the company also continues to manufacture Charmin and other leading fabric brands from virgin forest fibers, recklessly and unnecessarily sending the world’s most vital forests to a spell in customers’ toilets and trash cans.

Even where P&G has made commitments, such as its promise to end deforestation by 2020 and to ensure Indigenous peoples’ right to free, prior and informed consent – ​​P&G does not have the necessary processes in place to ensure supplier compliance with its policies. P&G still relies primarily on third-party certifications to ensure adherence to its policies – a practice that exposes the company to significant risk and that due diligence standards as a recent project OECD-FAO Handbook discouraged. This is particularly problematic for P&G since it continues to sourcesignificant amount of wood pulp from SFI and PEFC certified forests, industry-dominated systems that, in fact, do not guarantee the standards of P&G’s sourcing policies.

P&G has wrapped its inaction in a whole new level of greenwashing, attempting to obscure, rather than fix, its impacts on forests. In addition to its empty statements of ambition, P&G has provided misleading statistics around its actual impact on IFLs which rely on crude extrapolations from map overlays, and have distorted the third-party certifier requirements such as SFI and PEFC which do not, contrary to P&G’s claims, guarantee Indigenous rights or freedom from degradation. Nor do P&G’s own disclosures match its claim that it prohibits “forest degradation” – a term that, by reasonable scientific interpretationswould encompass the clear-cutting of irreplaceable primary forests, including boreal caribou habitat, which P&G does not actually prohibit.

P&G even waded into a new kind of climate denial, with a company representative actually indicating, contrary to well-established science, that industrial logging has no impact on the climate. In Canada, logging accounts for more than 10% of the country’s annual greenhouse gas emissions.

P&G management, particularly its chairman and CEO, Jon Moeller, and board members Angela Braly and Patricia Woertz, are responsible for the company’s regressive approach. These three business leaders have overseen the company’s years of inaction, its entrenchment in greenwashing, and its failure to capitalize on opportunities to lead a more sustainable market.

Each of these board members also has their own ugly past that puts their leadership failures in an even more disturbing context. Ms. Woertz held senior positions at Chevron in the late 1990s and early 2000s, during the height of Chevron’s efforts to obstruct climate action (an article from 2004 dubbed her the “first lady of oil”) – and faced many critical for its failure to address impacts on forests at Archer Daniels Midland. Ms Braly has her own ties to the oil industry, as a board member of ExxonMobil, and has, in various roles, faced pressure from investors for her inaction on climate change disclosures and managerial failures. Mr Moeller, himself a former Monsanto board member, has overseen P&G’s insufficient response, refusing to meet with NGOs and affected P&G family members, and cultivating a corporate culture that allows for denial. , greenwashing and complacency.

P&G’s short-sighted approach of turning investor demands into superficial rhetoric with little impact outside the confines of an ESG portal will leave the company increasingly out of touch with customers, decision-makers, the science and the deep urgency of the moment. By eliminating these three board members at P&G’s annual general meeting on October 11e, investors will have the opportunity to chart a new course for P&G, ensuring that its management is ready to deliver real solutions. Investors made it clear two years ago that they understand what is at stake. P&G now needs leadership that will act.

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