We wanted to share an update from Green Century’s progressive work with Deforestation within their funds. Green Century is the only mutual fund company in the world that is owned by environmental non-profits and ending deforestation is their flagship environmental campaign.
Green Century has filed a shareholder proposal with Procter & Gamble (P&G), one of the largest consumer packaged goods companies in the world, calling on the company to eliminate deforestation and forest degradation in its supply chain. Shareholders will vote on the resolution at the company’s Fall annual shareholder meeting.
“P&G’s failure to adequately mitigate deforestation and forest degradation in its supply chains poses material financial risk to the company and its shareholders,” said Green Century President Leslie Samuelrich. “The company must catch up to its peers and enact stronger policies to prevent unsustainable forest products from entering its supply chain.”
P&G lags behind competitors like Kimberly-Clark, which has committed to halving its use of natural forest fibers, including those from the Canadian boreal, and sourcing 90% of its wood pulp from alternative, recycled, or FSC-certified fibers by 2025.
P&G currently sources wood pulp certified by the Sustainable Forestry Initiative, which does not prohibit logging in old growth and high conservation value forests, such as the Canadian boreal, or provide safeguards for threatened species like caribou.
Green Century is urging P&G to reduce its reliance on natural forest fibers and ensure all remaining virgin fiber is certified by the Forest Stewardship Council (FSC), the industry gold standard.
The environmental and social problems associated with deforestation and forest degradation are increasingly known to consumers and investors, thanks to public awareness campaigns. P&G has received negative attention from more than 100 nongovernmental organizations for its sourcing practices in the Canadian boreal. P&G’s 2020 climate commitment also received significant negative attention for relying on offsets to meet its goals, rather than minimizing upstream impact. Events that impact a company’s reputation may affect a company’s value by as much as 30%.
“P&G policies neither set the company up to be a sustainability leader nor fully mitigate the Company’s exposure to forest-related risks,” said Green Century Shareholder Advocate Jessye Waxman. “P&G needs to set goals that comprehensively mitigate material operational and reputational risks.”
Blue Summit does not directly engage with companies listed above. Many, but not all clients, are invested in funds that perform this advocacy.