By Jessica DiNapoli
NEW YORK (Reuters) – Procter & Gamble has promised a group of shareholders that it will release more details about how it controls wood pulp suppliers, the investors told Reuters, after shareholders for years pressured the maker of Charmin toilet paper to buy more forest products buy sustainably.
The world’s largest consumer products maker has previously said it is conducting audits, but has provided little information. The impact of logging on the environment has increased the attention of P&G and other major pulp users.
The next step is for P&G and the investors to discuss the details of what the company will reveal next, said Andrew Shalit, a shareholder attorney at Green Century. Shalit sees such revelations as important to help environmentally conscious investors evaluate their holdings in P&G and other companies that buy pulp, especially from Canada’s environmentally sensitive forests.
The maker of Bounty paper towels said this month that it is guarding the details of its global supply chain for competitive reasons.
Green Century wants clarity on P&G’s supply chain to set an example for other companies that rely on Canadian pulp, such as Home Depot, in which Green Century also invests, Shalit said.
“We believe it will benefit P&G if the depth and accuracy of their oversight is better understood by investors,” he said.
Home Depot did not respond to a request for comment.
“We have agreed to share additional information to reassure consumers about the thorough and robust steps we are taking to protect forests for future generations,” a P&G spokesperson said, adding that the information would be available by mid-2025. “It is important to note that P&G is committed to protecting old-growth forests, and for every tree used in our paper products, at least two are regrown.”
The company relies on third-party certifiers, such as the nonprofit Forest Stewardship Council, to ensure its wood pulp is sustainably sourced. But a Reuters investigation this year found the certifications do little to stop the clearing of forests that absorb carbon and slow climate change.
P&G made the commitment to more disclosure after Green Century and other investors owning nearly $1 billion in stock jointly planned to advance a resolution on the company’s forestry practices at its annual meeting earlier this year, Shalit said. Major shareholders of P&G Robeco, BNP Paribas Asset Management and AXA Investment Managers were also involved in discussions with P&G, he said.
“By relying on an increasingly vulnerable ecosystem, companies expose themselves to purchasing risks,” says Peter van der Werf, head of Active Ownership at Robeco. “This is why we encouraged P&G to explore how to strengthen its vision for fiber resilience in the long term.”
“These enhanced disclosures should give investors a better understanding of the role P&G plays,” said Adam Kanzer, head of stewardship, Americas, at BNP Paribas Asset Management.
AXA declined to comment.
P&G has previously made similar pledges, dropping a pledge last year to prevent forest degradation because it simplified the language. The company says it only buys wood pulp from tree plantations and forests that produce wood.
Disagreement ABOUT CANADA
Green Century still wants P&G to reduce its reliance on pulp from Canadian forests, which the investment firm views as threatened by decades of logging, Shalit said.
“They don’t agree and don’t set a goal to reduce dependency,” Shalit said. “That’s an ongoing point of discussion.”
According to its website, P&G purchases 3% of all wood pulp produced in Canada. One of the main reasons environmentalists object to P&G’s reliance on wood pulp is because toilet paper and paper towels are thrown away after one use.
In its agreement with investors, Cincinnati-based P&G also said it would invest $20 million between 2025 and 2030 to develop wood pulp alternatives and recommit to protecting Canada’s pristine forests, Shalit said.
That investment represents a fraction of the $860 million P&G spends annually buying pulp for its North American toilet paper and paper towel businesses, based on an estimate from TTOBMA analyst Fraser Hart.
P&G also agreed to disclose more about its Canadian lobbying practices.
Rival Kimberly-Clark said this year it aims to ensure its products are made without wood pulp from untouched or naturally regrown forests.
(Reporting by Jessica DiNapoli in New York; Editing by Rod Nickel)
