Boston, December 17, 2024 – Procter & Gamble, the international consumer goods company, has agreed to provide additional information regarding its practices related to sourcing wood pulp from the boreal forests of Canada. The updates will reiterate the company’s aim to eliminate sourcing from intact forest landscapes and to protect primary forests. Among the world’s largest and most important remaining forestlands, the boreal provides critical wildlife habitat and stores vast amounts of carbon. Procter & Gamble uses some wood pulp from the boreal in the production of Charmin toilet paper, Bounty paper towels, and other consumer products.
The agreement came after discussions earlier this year with investment firms Green Century Capital Management, AXA Investment Managers, BNP Paribas Asset Management, and Robeco. In exchange, these investors agreed to withdraw a shareholder proposal asking the company to enhance its disclosures in relation to its existing efforts to mitigate risks to biodiversity and forest resilience.
“These disclosures will help investors better understand how P&G is managing the risks associated with sourcing from such an ecologically important area,” said Leslie Samuelrich, President of Green Century. “We’d prefer that the company eliminate its sourcing from the boreal. But if it is going to continue, it’s important that the company more clearly disclose its policies, practices and impact.”
This represents a significant milestone in the ongoing discussions between the investor group and the company, which aim to pursue their dialogue with P&G and closely monitor the company’s efforts with regards to this important biome through enhanced disclosures.
In addition, P&G will renew its investment in the development of alternative fibers. The company also agreed to increase disclosure of its advocacy and lobbying efforts related to robust forest management in Canadian forests.
Multiple Pressures on the Boreal
The boreal is under increasing ecological pressure from the combined effects of climate change and decades of logging. Recent years have seen a drop in caribou populations, considered an indicator of overall biodiversity decline. In 2023, wildfires consumed over 45 million acres of the boreal, roughly equal to the totals from the previous seven years combined.
“By relying on an increasingly fragile ecosystem, companies expose themselves to sourcing risks,” said Peter van der Werf, Head of Active Ownership at Robeco. “This is why we encouraged P&G to explore how its vision for fiber resilience could be strengthened in the long run, a logical step for both its competitive standing and biodiversity
Adam Kanzer, Head of Stewardship, Americas at BNP Paribas Asset Management, added, “Degradation of the Canadian boreal is a key threat to diversified investors. We cannot afford to lose this critical carbon sink and cradle of biodiversity. These enhanced disclosures should provide investors with a clearer understanding of the role P&G is playing. We hope that this will raise the bar for other companies as well.”
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