Procter & Gamble (P&G), the world’s largest consumer goods company, has pledged to provide more detailed information about its wood pulp supplier audits. This commitment follows years of pressure from shareholders urging the maker of Charmin and Bounty to adopt more sustainable forestry practices. P&G’s increased transparency aims to address concerns about the environmental impact of logging.
P&G has historically conducted audits of its wood-pulp suppliers but has revealed little about the process. The lack of transparency has drawn criticism from environmental groups and investors concerned about the impact of logging on vital ecosystems. This new commitment signifies a shift towards greater accountability.
The next phase involves P&G and investors collaborating to define the specifics of the disclosures. Andrew Shalit, a shareholder advocate at Green Century, emphasized the importance of this information for environmentally conscious investors. Detailed disclosures enable investors to assess their holdings in P&G and other pulp-buying companies, particularly those sourcing from Canada’s sensitive boreal forests.
Earlier this month, P&G cited competitive reasons for safeguarding details of its global supply chain. However, Green Century believes that greater transparency in P&G’s supply chain will set a precedent for other companies reliant on Canadian pulp, like Home Depot. “We think it will benefit P&G for the depth and rigor of their oversight to be better understood by investors,” Shalit stated. Home Depot did not respond to requests for comment.
A P&G spokesperson confirmed the commitment: “We agreed to share additional information to reassure consumers of the thorough and robust steps we are taking to protect forests for future generations.” The information is expected to be available by mid-2025. The spokesperson added, “P&G aims to protect primary forests, and for every tree used in our paper products, at least two are regrown.”
P&G relies on third-party certifications, such as the Forest Stewardship Council (FSC), to validate the sustainability of its wood pulp sourcing. However, a recent Reuters investigation revealed that these certifications often fail to prevent clear-cutting, a practice detrimental to carbon absorption and climate change mitigation.
The commitment to increased transparency resulted from collective action by Green Century and other investors holding nearly $1 billion in P&G shares. These investors intended to introduce a resolution addressing the company’s forestry practices at its annual meeting. Robeco, BNP Paribas Asset Management, and AXA Investment Managers also participated in discussions with P&G.
“By relying on an increasingly fragile ecosystem, companies expose themselves to sourcing risks,” commented Peter van der Werf, Robeco’s head of active ownership. “This is why we encouraged P&G to explore how its vision for fiber resilience could be strengthened in the long run.” Adam Kanzer, head of stewardship, Americas, at BNP Paribas Asset Management, added, “These enhanced disclosures should provide investors with a clearer understanding of the role P&G is playing.” AXA declined to comment.
This is not P&G’s first commitment to sustainable forestry. Last year, the company simplified its language and dropped a pledge to avoid forest degradation, stating it only sources wood pulp from tree plantations and managed woodlands. However, disagreements remain regarding P&G’s reliance on Canadian pulp.
Green Century continues to advocate for P&G to reduce its dependence on pulp from Canadian forests due to concerns about the long-term impact of extensive logging. “They disagree and aren’t setting a goal of reducing reliance,” Shalit noted. “That’s an ongoing point of discussion.” P&G’s website indicates that the company purchases 3% of all wood pulp produced in Canada. Environmentalists argue that using wood pulp for single-use products like toilet paper and paper towels is unsustainable.
As part of the agreement, P&G has committed to investing $20 million in developing alternative wood-pulp sources between 2025 and 2030 and reaffirmed its dedication to protecting Canada’s primary forests. This investment represents a small fraction of the estimated $860 million P&G spends annually on pulp for its North American tissue business. P&G also agreed to increased transparency regarding its Canadian lobbying activities.
In contrast, competitor Kimberly-Clark announced earlier this year its goal to eliminate wood pulp from untouched or naturally regrown forests in its products. P&G’s commitment to increased transparency is a significant step, but ongoing dialogue and further action are needed to ensure truly sustainable forestry practices.
