They say a second revolution in corporate accountability might be on its way.
Traditionally, explains Mighty Earth, institutional investors that “have a conscience” file shareholder resolutions with companies as a way to draw attention to an issue or negotiate a voluntary agreement for improvement. If it goes to a vote, victory is considered 20 or 25% of votes cast by shareholders, said the not-for-profit group.
However, earlier this month the campaigners noted a new development, when the shareholders of Procter & Gamble voted on a resolution filed by Green Century Capital Management, and supported by the Natural Resources Defense Council (NRDC), Stand.Earth, and others, calling on the company to issue a report on how it can increase the scale, pace, and rigor of its efforts to stop destruction of intact forests.
“P&G’s management urged its shareholders to reject the resolution – but a whopping 67% supported it. It is an almost unheard-of result that means that some of the world’s largest investors backed this action.
“It could mean that investors are finally taking deforestation and climate change seriously, ready to force action… We hope other companies take notice,” commented Mighty Earth.
The P&G shareholders called on the company to assess and disclose the impact it has on forests, rather than to immediately halt any activity.
P&G’s sourcing and labor practices in the boreal forest of Canada, which helps absorb carbon and is home to diverse wildlife, have been called into question. P&G is the largest purchaser of boreal pulp for tissue in the US. Critical attention has also been on tropical forests in Malaysia and Indonesia, where the company sources some of its palm oil and fiber.
A recent investor brief released by NRDC and others set out to outline the alleged financial risks posed by P&G’s current sourcing.
Prior to the vote, P&G CEO, David Taylor, defended the company’s practices, saying the company is “a leader not a laggard” on sustainability, reported Bloomberg.
Green Century Capital Management is the only mutual fund company in the US wholly owned by environmental and public health nonprofit organizations.
After the vote, its shareholder advocate, Jessye Waxman, remarked: “As consumer preferences, social license, and the state of our environment evolve, it is imperative that companies adopt comprehensive and ambitious commitments to reduce their environmental impacts.”
In February this year, Green Century withdrew a shareholder proposal with Tyson Foods, the second largest meat processor in the world, after the company publicly revealed its commitment and existing plans to develop and implement a no-deforestation policy.
In the withdrawal agreement, Tyson publicly committed to developing and implementing a forest policy that addresses ‘No Deforestation, No Peat, No Exploitation (NDPE).’ It also agreed to establish supplier monitoring and engagement policies. To alleviate investor concerns about transparency, the meat processor also agreed to improve its reporting on the traceability and sustainability of forest-risk commodities in its global supply chain.
In December 2019, Green Century also called for the continuation of the Amazon Soy Moratorium, and earlier that year it collaborated with Aramark, one of the world’s largest food service companies, to develop a robust no-deforestation policy that will cover its entire global supply chain and include legal deforestation.
Finally, last year saw the fund convince Kroger, the largest grocery chain in the US, to develop and implement a no-deforestation policy for its private label products.