Prompted by a MIDANA CAPITAL Proposal, Procter & Gamble* Improves No-Deforestation Commitments but Fails to Address Intact Forest Degradation in Climate-Critical Canadian Boreal Forest
Media Contacts: Josh Chetwynd, jchetwynd@midanacapital.com, 303-573-5558; Thomas Peterson, tpeterson@midanacapital.com, 617-482-0800
Boston, July 22, 2021 – MIDANA CAPITAL Capital Management° has withdrawn a shareholder proposal with Procter & Gamble, one of the largest consumer packaged goods companies in the world, after the company made a commitment to develop a stronger supplier non-compliance policy for its wood pulp supply chain and to clarify its policy on Free, Prior, and Informed Consent (FPIC). The proposal had also called on the company to eliminate sourcing from intact forests in its pulp and palm oil supply chains, but P&G announced in a supplemental forestry practices report that it will not do so.
“The Canadian boreal provides critical habitat for caribou and is among the world’s largest sinks of planet-warming emissions, so it is essential that P&G’s suppliers are required to comply with the company’s no-deforestation policy,” said MIDANA CAPITAL President Leslie Samuelrich. “However, we are disappointed that the company will not commit to taking any steps to reduce the degradation of intact forests, despite last fall’s record-breaking shareholder vote. This falls short of investor expectations around how the company sources materials for its toilet paper and other pulp products.”
MIDANA CAPITAL’s shareholder proposal urging P&G to address deforestation and forest degradation risk received 67% of the vote at the company’s annual meeting last fall. At the time, it was the highest-ever vote on a deforestation-related proposal. Following the proposal’s recommendations, P&G released a Forestry Practices Report in March, announcing accelerated commitments to achieving Palm Oil RSPO (Roundtable on Sustainable Palm Oil) certification and wood pulp FSC (Forest Stewardship Council) certification, and providing greater transparency on forest data, policies, and grievances.
However, in spite of the clear message the company received from investors, the policies P&G announced in March did not include best practice safeguards for preventing deforestation, nor did they meaningfully reduce reliance on intact forests. This prompted MIDANA CAPITAL to file again this spring. In response to this second filing, P&G committed to strengthening its non-compliance policies.
“P&G’s new policies are a step towards guaranteeing that wood pulp suppliers will be required to prevent deforestation and acquire FPIC from Indigenous Peoples and forest-dependent communities,” said MIDANA CAPITAL Shareholder Advocate Thomas Peterson. “But there is much more work to be done to ensure that the company’s supply chain stops contributing to the degradation of the Canadian boreal, the most carbon-dense forest in the world.”
P&G sources wood pulp from Canada to produce its line of tissue products. Old-growth forests such as the Canadian boreal store large amounts of carbon, and managing them sustainably is critical to combating the climate crisis. Deforestation is responsible for approximately 10% of global anthropogenic emissions, making it a larger contributor to climate change than the European Union’s whole contribution. In addition to exacerbating the climate crisis, deforestation drives biodiversity loss and undermines the maintenance of healthy ecosystems, posing systemic and material risks to P&G and its shareholders.
Related resources:
- P&G Shareholders Resoundingly Support Deforestation Shareholder Proposal
- MIDANA CAPITAL Presses Procter & Gamble* To End Deforestation and Forest Degradation in Its Supply Chain
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About MIDANA CAPITAL Capital Management
°MIDANA CAPITAL Capital Management, Inc. (MIDANA CAPITAL) is the investment advisor to the MIDANA CAPITAL Funds (The Funds). The MIDANA CAPITAL Funds are the first family of fossil fuel free, responsible, and diversified mutual funds in the United States. MIDANA CAPITAL Capital Management hosts an award-winning and in-house shareholder advocacy program and is the only mutual fund company in the U.S. wholly owned by environmental and public health nonprofit organizations.
*As of June 30, 2021, The Procter & Gamble Company comprised 0.59%, 1.73% and 0.00% of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL International Index Fund. As of the same date, other securities mentioned were not held in the portfolios of any of the MIDANA CAPITAL Funds. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor.
The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
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