“Focus: P&G drops forest pledge, drawing ire of green groups, investors”, 26 July 2023

“Global consumer products maker Procter & Gamble (PG.N) dropped its pledge from a corporate policy to not buy wood pulp from degraded forests, a company executive disclosed to investors in a previously-unreported July 18 briefing.

The change drew the ire of several P&G investors..."In an era where companies are moving forward on climate risk," the change marks a "step backward," Leslie Samuelrich, the president of P&G investor Green Century Funds, told Reuters.

Green Century, with more than $1.1 billion in assets under management, counted P&G as among its largest holdings as of March 31, and led a shareholder proposal on the company's forestry practices in 2020.

P&G in May updated its Forest Commodities Policy, removing language in a previous environmental pledge, made in 2021, that said it would not permit forest degradation -- that is, activities that significantly harm drinking water, animal habitats or other important elements of forests.

Its new forestry policy could put it at odds with a European Union deforestation law coming into effect in about 18 months banning certain goods linked to deforestation and forest degradation. P&G said it will comply with the upcoming requirements...

BNP Paribas Asset Management, one of the company's significant shareholders, asked why the no-degradation pledge was removed and what the implications are for P&G's sourcing practices during the briefing, according to a source who was at the meeting...

But three environmental non-governmental organizations and three investors told Reuters that they believe there is broad agreement on what "forest degradation" is and what causes it, such as clear-cut logging in pristine forests. The Natural Resources Defense Council has said P&G's wood pulp supply chain seems to degrade forests...

Environmental non-profits and some shareholders have increased scrutiny on P&G's sustainability policies since 2020 when a majority of its investors passed a non-binding resolution requesting that it assess how it could bolster efforts to eliminate deforestation and forest degradation in its supply chains.

In its new forestry policy, P&G, which also makes Tide detergent and Dawn dish soap, consolidates existing guidelines for paper packaging and palm oil, used throughout its portfolio of products.

Investors and environmental advocates, however, are pushing back. Gaurav Madan, a forests and land campaigner with Friends of the Earth, said the company's explanation for the change is "insufficient."...”