The High Cost of P&G's Inaction

More than 100 days after P&G’s voting shareholders sent an overwhelming message to the company to stop fueling deforestation and forest degradation, P&G still has not announced an action plan. This delay is inexcusable and costly to communities, the planet, as well as P&G’s investors.

On October 13th, 2020, Procter & Gamble (P&G) received a stunning rebuke from two-thirds of its voting shareholders, who sent a message that the company is failing to protect communities, forests, and the global climate throughout its supply chain.

More than 100 days later, P&G, which manufactures Charmin toilet paper entirely from virgin forest fiber, has yet to demonstrate that it is serious in heeding shareholder demands that it increase the scale, pace, and rigor of its efforts to eliminate deforestation and intact forest degradation from its supply chains.

The cost of P&G’s inaction to both people and the planet is high. In just the three months since the shareholder meeting, mills that make pulp for P&G’s tissue products in Ontario have sourced wood that weighs the rough equivalent of more than 100,000 passenger vehicles.[1] These same mills sourced from an area the equivalent of harvesting approximately 50 football fields of land every single day during this period.[2] Through this sourcing, P&G is one of the players driving intact forest loss in Canada that lags just behind Brazil. 

For P&G’s palm oil supply chain, the picture is just as bleak. The company has yet to demonstrate meaningful progress, even in the case of one of P&G’s largest palm oil suppliers, which is linked to horrific forced labor practices that led to an import ban by U.S. Customs and Border Protection. Other palm oil suppliers have been tied to corruption, deforestation, and other human rights violations, and many of P&G’s suppliers do not require free, prior, and informed consent from the communities in whose lands they operate.

The organizations shining a spotlight on P&G’s inaction include NRDC, Stand.earth, Rainforest Action Network, Friends of the Earth US, and Environment America. These groups have written to P&G’s CEO David Taylor and the board calling for more urgent action. The coalition's demands are straightforward and would significantly mitigate P&G’s risk across supply chains and resolve the companies ongoing risk:

1. Cut the company’s use of virgin fiber for throwaway tissue products in half by 2025.

2. Require, monitor and verify if all suppliers are complying with commitments to immediately end deforestation, intact forest degradation, and destruction of critical habitat for threatened and endangered species.

3. Require, monitor and verify if suppliers are respecting the right of Indigenous and traditional communities to give or withhold their free, prior and informed consent.

4. Engage directly with impacted communities to resolve grievances; and

5. Establish a non-compliance protocol that outlines the consequences of supplier non-compliance, and defines specific thresholds at which those consequences take place.

P&G knew about the significant problems within their supply chain long before shareholders had a chance to vote to push the company toward action. For years, many groups have flagged that P&G’s pulp and palm oil suppliers are tied to forced labor, human rights violations, intact forest destruction, degrading threatened species habitat and more.

In the two and a half years since NRDC and Stand.earth first communicated to P&G links in the company’s tissue pulp supply chain to threatened boreal caribou habitat, human rights issues, and intact forest destruction, P&G’s pulp suppliers in Ontario alone have expanded their logging footprint by an area the size of Cincinnati. [3] This does not include pulp volumes the company sources from other boreal provinces.

But instead of demonstrating leadership, P&G continues to rely on third-party certifications as their primary method for mitigating supply chain impacts, an approach that is wholly insufficient, attempts to deflect responsibility, and legitimizes weak certification schemes at the expense of real solutions. P&G has not committed to avoiding threatened species habitat, nor to requiring their suppliers respect human rights, nor even to making clear what consequences their suppliers will endure as a result of violating their policies. Even as asset managers like BlackRock make it clear that they are expecting the companies they invest in to ratchet up their sustainability policies and climate plans, P&G is choosing the path of least resistance, remaining mired in a perpetual state of forest destruction, rights violations, and financial risk.

The path to leadership and responsibility for P&G is clear, but it remains to be seen how quickly the company will act, and whether it will go far enough. One thing is certain—if P&G does not do enough now, impacted communities, civil society groups, and the financial world will not forget P&G’s lack of leadership during this planetary crisis.

Tell Procter & Gamble CEO David Taylor that you want P&G to stop flushing our forests.

[1] According to the most recent Forest Management Unit (FMU) annual reports from Ontario’s Ministry of Natural Resources and Forestry, mills producing NBSK pulp in Ontario source nearly 600,000 cubic meters of wood in an estimated three-month period. Based on an average wood density of softwoods (393 kg/m3), this volume of wood weighs roughly 517,000,000 pounds. Assuming the average passenger vehicle weighs 5,000 pounds, we arrived at this statistic.
[2] Based on Ontario’s most recent FMU annual reports, over a three-month period, we estimate that the volume of wood sourced by mills producing NBSK pulp in the province translates to approximately 5,897 acres of harvested area (a football field covers about 1.32 acres). To estimate the land area equivalent of these mills’ wood volume sourcing, we multiplied the percentage of each FMU’s total wood volumes that were allocated to NBSK mills by the total harvested area reported in the FMU.
[3] Logging footprint refers to the area harvested, either directly by the companies that own these mills or by third-party operations, in order to supply the total wood volume received by these NBSK mills. Based on our estimate that, over a three-month period, NBSK mills in Ontario source a total wood volume equivalent to harvesting 5,897 acres of land, this translates to logging approximately 58,970 acres over two and a half years. The land area of Cincinnati is 77.94 square miles or about 49,882 acres.