Advocacy groups issue ‘investor risk alert’ for Procter & Gamble

May 13, 2021

P&G’s failure to address irresponsible suppliers cited as a reputational risk for the company and investors

NEW YORK, NY — International environmental advocacy groups, Friends of the Earth, and Rainforest Action Network have issued an “investor risk alert” for Procter & Gamble (P&G; NYSE: PG) targeted at ESG fund managers, stating that the lack of action from the world’s largest consumer goods company on forest sourcing and forest degradation issues in its supply chains is a reputational risk for the company and for investors.

The risk alert states that P&G’s ongoing failure to distance itself from irresponsible suppliers in Canada, Indonesia, and Malaysia poses a material risk to P&G and its investors. P&G’s pulp and palm oil suppliers for products like Charmin toilet paper and Head & Shoulders shampoo have been found to cause significant degradation to primary forests that are home to threatened species like caribou (reindeer), as well as to contribute to human rights violations, including the use of forced labor and the violation of free, prior, and informed consent (FPIC) with indigenous communities.

The warning comes amid signs from the investment community that it is beginning to take these sorts of risks seriously. For example, BlackRock CEO Larry Fink recently doubled down on his strategy to integrate climate risk into the investment business.

In October 2020, P&G’s inaction on forests prompted 67% of shareholders, including Blackrock, one of P&G’s largest shareholders, to vote in support of a resolution by Green Century Funds asking the company to eliminate deforestation and forest degradation in its supply chains. In March 2021, P&G outlined plans to deal with the issues outlined in the resolution, which advocacy groups critiqued for not adequately addressing the company’s forest destruction.

“When P&G finally responded to its shareholder revolt, it did so with a misleading marketing campaign about ‘replanting trees’, while outsourcing supply chain oversight to third-party certifications. But the company’s commitments fail to include a clear plan to end its reliance on irresponsible and high risk suppliers, leaving P&G right where it began — highly exposed to suppliers with significant reputational and financial risk,” said Tyson Miller, Forest Programs Director at

Several investment firms and wealth management advisors that monitor ESG funds issued statements that echoed some of the concerns outlined in the risk alert.

“P&G’s failure to fully address human rights and environmental concerns in its forest-based supply chains is a reputational risk raising a red flag for ESG investors. Boston Common Asset Management will voice our concerns with P&G’s leadership and advocate meaningful change for in-depth sustainable procurement and sourcing, and protections for Indigenous Peoples’ rights,” said Steven Heim, Managing Director at Boston Common.

“First Affirmative Financial Network expects the companies in which we invest to not only manage systemic risk such as deforestation — we expect them to help preserve the integrity of the natural resources upon which they rely. We urge Procter & Gamble to adopt clear accountability mechanisms for its suppliers as well as stringent thresholds for suspending or terminating irresponsible suppliers,” said Holly Testa, Director of Shareholder Engagement at First Affirmative Financial Network.

“We believe that environmental, social, and governance (ESG) factors are fundamental to valuing a company and that investment risks from P&G’s supply chain issues should be taken seriously. We call on P&G to improve its social and environmental performance, including the adoption of clear accountability mechanisms for its suppliers and enforceable, comprehensive thresholds for suspending or terminating bad actors. Further, we support Green Century Funds’ shareholder resolution and urge Procter & Gamble to take the risk to itself and the ESG investor community seriously,” said David Schneider and Hart Hodges, Principals at Waycross Investment Management.

“P&G has the opportunity and resources to be a part of the solution. To do better. Their customers want them to do better. And yet, while P&G suppliers violate human rights, degrade primary forests, and put threatened species at risk, P&G refuses to make real and effective commitments or changes. As ESG funds come under closer scrutiny in the press, P&G becomes a reputational risk to ESG funds holding P&G and not actively engaged in the discussion with P&G’s Board,” said Keley R Petersen, CEO at Willow Grove Advisors.

The investor risk alert offers several options for ways that SRI and ESG fund managers can address these risks: 

  • Express their concerns to P&G directly, and encourage the company to adopt time-bound commitments and to distance itself from suppliers that fail to meet key environmental and social standards;
  • Vote against specific directors on the company’s board at the upcoming shareholder meeting in October 2021, if P&G fails to address fund managers concerns;
  • Invest in or develop funds that avoid primary forest degradation or deforestation. 
  • Adopt primary forest deforestation-risk policies, and follow Guidelines for Asset Managers on Forests and Human Rights

“Procter & Gamble’s irresponsible choices and leadership failures have put P&G in the crosshairs of a global campaign to improve its social and environmental performance,” said Daniel Carrillo, Forest Campaign Director at Rainforest Action Network. 

“P&G’s refusal to take responsibility for risk in its pulp and palm oil supply chains, and its ongoing failure to suspend sourcing from irresponsible suppliers, has become a material risk not only to P&G, but also to investors that include P&G in their ESG funds” said Jeff Conant, Senior International Forest Program Director with Friends of the Earth U.S. 

The investor risk alert follows and the Natural Resources Defense Council’s Issue with Tissue campaign against P&G, launched more than two years ago, calling out the world’s largest consumer goods company for making toilet paper and tissue products from endangered forests and threatened species habitat. More information on the campaign can be found at


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Virginia Cleaveland, Communications Manager,, +1 510 858 9902 (Pacific Time)
Jim Ace, Senior Campaigner,, +1 510 290 2448 (Pacific Time)