Oil Fund disagrees with Procter & Gamble – E24

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The owners of Procter & Gamble ask the company to do more to prevent products such as toilet paper from contributing to deforestation. The Petroleum Fund voted in favor of the proposal.

These are some of Procter & Gamble’s products. This week, the Petroleum Fund supported a shareholder proposal that the company must do more to limit deforestation.

Procter & Gamble

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A solid majority of 67 percent of the shareholders in the giant company Procter & Gamble supported the proposal from Green Century Funds at Procter & Gamble’s general meeting this week, against the management’s recommendation.

Among the shareholders who supported the proposal was the Norwegian Petroleum Fund, which at New Year owned shares worth NOK 28.4 billion in Procter & Gamble, which corresponds to an ownership of 1.04 percent.

Procter & Gamble’s shareholders have sent an emphatic message to the company, said Jessy Waxman of Green Century in a statement after the vote.

In its shareholder proposal, Green Century called for Procter & Gamble to do more to limit deforestation and felling of virgin forest in its value chain. The proposal also asked the company to report on the work against deforestation.

Procter & Gamble uses pulp (pulp) for Puffs, Charmin dope and Bounty paper towels.

P&G also uses palm oil in its products, with the risk of deforestation and emissions of CO₂, according to the shareholder proposal.

The board of Procter & Gamble advised the shareholders in advance to reject the proposal, and pointed out that the company already reports a lot about its value chains. The company has also published its strategy on deforestation and climate change.

– P&G will continue to work to ensure sustainable access to raw materials such as pulp, palm oil and palm kernel oil, the board writes in the notice convening this year’s general meeting.

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The Petroleum Fund supported the deforestation proposal

The Norwegian Petroleum Fund voted in favor of Green Century’s shareholder proposal, according to the Petroleum Fund’s own website.

– The board should take into account the important sustainability risk that the company faces, and the broader environmental and social consequences of its operations and products, the Petroleum Fund writes in its justification for the vote.

The Petroleum Fund points out that companies ‘reporting on sustainability should be in line with available global reporting standards and frameworks, in order to support investors’ analyzes of risk and opportunities.

– When a company’s reporting does not satisfy our standard as a financial investor, we will consider supporting a well-founded shareholder proposal to advocate sensible reporting. We will not support shareholder proposals that seem to require a strategy or detailed methods, unrealistic time horizons or goals for implementation, writes the Petroleum Fund.

The fund has also previously been involved in the fight against deforestation. Among other things, the Petroleum Fund had a meeting with banks, managers and food producers in Singapore last year to discuss the risk of deforestation.

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Blackrock voted in favor

The giant fund Blackrock also supported the shareholder proposal, which also advocates increased reporting on deforestation.

– There is room for P&G to increase the frequency and depth of reporting, Blackrock writes in its justification.

“Companies’ risk of reputation and operation by being implicated in accusations of deforestation worries us,” Blackrock writes.

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These are the concerns

According to Green Century, P&G collects pulp and timber from Canada, including in boreal coniferous forest, which is also found in Scandinavia and is considered an important CO₂ stock.

They believe that Procter & Gamble lags behind competitors such as Kimberly-Clark in this area.

CEO David Taylor of Procter & Gamble.

Procter & Gamble

P&G uses raw materials that are certified by the Sustainable Forestry Initiative, but according to Green Century this does not prevent felling in old forests or forests with high conservation value. This standard also does not provide adequate protection for endangered species such as the North American wild reindeer (caribou), they claim.

Green Century believes that P&G should rather reduce the need for fiber from natural forests, and use raw materials that are certified by the Forest Stewardship Council, which is described as the “gold standard” in the industry.

– The fact that P & Gs has not handled deforestation and forest degradation in its supply chains constitutes a real financial risk for the company and the shareholders, said Leslie Samuelrich in Green Century when the proposal was presented.

Several environmental players are also critical of P&G and other US suppliers of paper towels and dope paper. In the report “The Issue With Tissue”, the Natural Resources Defense Council points out that Canadian forests are flushed down the US toilets, and criticizes, among other things, the P&G brand Charmin.

The Petroleum Fund also voted against the re-election of CEO David S. Taylor to the board of P&G. The fund has a principled view that the CEO and chairman of the board of companies should be two different people, for the sake of good corporate governance.

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