CINCINNATI — Procter & Gamble Co. promised decisive action in 2014, after Greenpeace protestors hung 60-foot banners from the company’s headquarters building.
“Head & Shoulders: Wipes out dandruff and rain forests,” one banner proclaimed. It was a reference to P&G’s use of palm oil as a key ingredient in shampoo and liquid detergent. The widely used oil comes from plantations that replaced tropical forests in Malaysia and Indonesia.
P&G promised “100% sustainable sourcing of palm oil by 2015” by getting its suppliers certified by the Roundtable on Sustainable Palm Oil. P&G achieved that goal, but not until in 2021.
By that time, the company was using about 30% more palm oil than the 462,000 tons it consumed in 2013. And other environmental groups were investigating a host of new concerns about the company’s buying habits in Sumatra and Canada.
“What we’ve seen over the last five years is the landscape in which P&G is operating is shifting under their feet,” said Shelley Vinyard, manager of the boreal corporate campaign for the Natural Resources Defense Counsel. “People are demanding more and more that the brands they purchase aren’t coming at the cost of our planet and its people.”
The WCPO 9 I-Team has been researching P&G’s response to deforestation because of increasing calls by environmental activists and descendants of the company’s founders for P&G to do more. Beyond those complaints, the European Union has adopted new regulations that requires all companies to show their products did not come from land subject to deforestation after December 2020.
P&G said it will comply with the new EU standard.
“We have a policy against deforestation, and we have rigorous compliance mechanisms in place” said Tonia Elrod, vice president for P&G Family Care. “Because we are committed to keeping forests as forests, for every tree we use in our paper products, at least two are regrown.”
Tracking grievances
The company provides a detailed look at its compliance mechanisms in a pair of grievance trackers.
One shows P&G’s response to complaints about its palm oil supply chain. The other does the same for wood pulp, which is used to make toilet paper, tissues and paper towels.
The wood pulp grievance tracker lists seven issues investigated by the company since 2008, when it “stopped sourcing from Indonesia due to human rights concerns.”
In the palm oil tracker, P&G shows 40 grievances investigated by the company. They resulted in 21 supplier suspensions since 2016.
But that isn’t enough to satisfy the Rainforest Action Network, a San Francisco-based nonprofit that staged a May 1 protest downtown.
“Procter & Gamble is failing to hold true to all of its commitments to end deforestation,” said one of the protestors, Midavi Hayden of Northside, as he marched from City Hall to P&G headquarters.
Hayden called for P&G to stop doing business with Royal Golden Eagle Group for failing to halt a land grab in North Sumatra by another company, PT Toba Pulp Lestari.
P&G agreed to meet with members of Pargamanan-Bintang Maria community who traveled to Cincinnati for the protest. But the company had already explained in its grievance tracker that it has little ability to influence the pulp company’s actions.
“Since PT TPL is not a P&G supplier, we do not have any direct commercial relationship to engage on this case,” P&G told the Rainforest Action Network in a December 2022 letter. “However, we do feel strongly that a path to resolution needs to be found between PT TPL and for the local communities involved.”
So, P&G used its business relationship with another company affiliated with Royal Golden Eagle Group to set up a meeting with TP PTL. And it urged the Rainforest Action Network to join in the conversations.
“We believe that dialogue can unlock the path to progress,” said the P&G letter.
“We were grateful to hear that the company did meet with the front-line community,” said Justine Epstein, a sixth-generation descendant of P&G co-founder James Gamble. She hand-delivered a letter from indigenous leaders to P&G CEO Jon Moeller last October. She called the May meeting “a promising sign” and hopes “those meaningful conversations” continue.
From rainforests to boreal forests
The rainforest grievances show the complexity of business relationships that P&G monitors with field assessments, satellite surveillance, deskside audits and supplier sustainability meetings. It also engages with third-party certification systems like the Roundtable for Sustainable Palm Oil and the Forest Stewardship Council.
While P&G has achieved most of its certification goals on the palm oil side, forestry certification is still a work in progress. And that’s where P&G is taking the most heat these days from environmental activists like NRDC.
“What we’re calling for P&G to do is stop sourcing from the world’s primary forests, particularly in the boreal forest of Canada, which is the largest primary forest left on the planet,” Vinyard said. “When you clear cut these areas, it means habitat destroyed. It means rights violated. It means carbon released into the atmosphere. That’s where P&G is falling short.”
P&G has announced partnerships with the Forest Stewardship Council to develop stricter forest-management standards in Canada while increasing FSC certification among its boreal pulp suppliers. But its impact on the Canadian logging industry is limited by its buying power: P&G says it purchases only 3% of pulp products sold in Canada and 1% of all forest commodities.
The Canadian government claims it has one of the world’s best forest management programs, on a "Myths and Facts" web page, last updated in June by its department of natural resources.
“The annual deforestation rate in Canada in 2010 was less than 0.02% of our forests and the rate has been declining for over 25 years,” said the website. “Canada’s 348 million hectares of forest lands represent about 9% of the world’s forest cover, but account for only 0.3% of global deforestation.”
NRDC isn’t buying it. It filed an SEC complaint against P&G last November, claiming the company misled investors by telling shareholders it “does not allow deforestation and does not permit forest degradation” in its supply chain. A central argument in that complaint is that P&G suppliers are degrading Canadian forests by disturbing caribou habitat.
“In many parts of their suppliers’ tenures, more than 35% of the tenure is disturbed,” said Jennifer Skene, a natural climate solutions policy manager at NRDC and author of the SEC complaint. In a 2019 webinar, Skene displayed a map showing habitat disturbances “exceeded what Canada’s federal caribou recovery strategy says is allowable if caribou are going to have even a 60% chance of survival. So, at the same time that Procter & Gamble is continuing to source tissue products entirely from virgin forest fiber, it’s also doing so in a way that’s having really dire impacts on this very threatened species.”
“They have a really good point,” said Leslie Samuelrich, president of Green Century Capital Management in Boston. The environmentally focused investment fund pressured P&G with two years of shareholder resolutions that led to “a stronger non-compliance policy” for pulp suppliers in 2021.
“Now I feel like, ‘Oh my god. We have to call P&G and get another meeting with them,’ because that is, that’s not OK,” Samuelrich said.
P&G did not respond to questions about whether its suppliers are causing forest degradation in Canada.
But in 2017, an independent audit showed one of the areas with the highest level of disturbance in NRDC’s report was “managed consistently with the principles of sustainable forest management.” Merin Forest Management conducted the audit of the Lac Suel Forest, where P&G supplier Domtar operates. NRDC showed a 45% caribou habitat disturbance rate in its analysis of the forest. But Merin argued otherwise.
“On paper, caribou habitat was reduced by 18% because of harvesting and silviculture. However, site visits during the audit suggested that the conifer renewal program in the Lac Seul Forest has been outstandingly successful,” said the Merin report.
Caribou range disturbances could be a moot point in NRDC’s complaint against the company because P&G removed all references to forest degradation when its Forest Commodities Policy was updated in May. P&G said its “commitment to responsible forestry” hasn’t changed. It removed degradation language because different groups opposing degradation can’t agree on a definition.
And that prompted more criticism from NRDC.
“This latest move by the company creates even less clarity about the company's sourcing practices,” Vinyard wrote in a June 29 blog post. “P&G needs to stop obfuscating and instead make a real, meaningful commitment to eliminate forest degradation in its supply chain.”
What it would take for P&G to satisfy its critics, descendants of the founders can’t say.
Procter descendant Chris Matthews suggested “a new product or product test” of a recycled Bounty or Charmin product might be a win for the company and for activists. Gamble descendant Jim Epstein said he’s “more interested in seeing that they’re moving in the right direction.”
This much is clear: The family will continue talking to shareholder activists, environmental groups and company officials to focus attention on deforestation issues.
“We know we are not experts on the strategy or the science, but we have a unique position of power with respect to Procter & Gamble, as well as a vested interest in the company acting responsibly,” Justine Epstein said. “I’m hopeful that we as a group of descendants can hold a meaningful and unique role in bridging those worlds and supporting the company to take more seriously some of the demands that are coming from these organizing groups.”
‘Conscience of the Company’ is a three-part series that explores how the descendants of Procter & Gamble’s founders continue to influence the company today. The first installment explained why family members got involved. Tomorrow, we’ll explore what role P&G’s founding families played in opposing slavery.
