“P&G Shareholders Overwhelmingly Pass a Deforestation-Related Resolution to Mitigate Material Financial Risk” – Chain Reaction Research – November 3, 2020

On November 3, 2020 Chain Reaction Research reported that “(i)n an unprecedented move, BlackRock voted in favor of a shareholder resolution requesting an assessment report to identify further opportunities to combat deforestation and degradation of intact forests in Proctor & Gamble (P&G) supply chains. BlackRock, State Street, and Vanguard, the “Big Three” asset managers, have a combined USD 62 billion in P&G stakes (as of Q1 2020), and as such, have been under substantial pressure from activists and environmental organizations to support the resolution. More than 382,000 people signed a petition calling P&G to stop deforestation and intact forest degradation for toilet paper production. Activists protested outside the P&G Cincinnati headquarters, and environmental organizations engaged P&G shareholders. Meanwhile, the P&G board recommended that investors vote against the proposal, expressing satisfaction with existing deforestation policies.

After the resolution passed by 67 percent, BlackRock released a statement with its rationale for supporting the proposal: “As a long-term investor, the reputational and operational risks faced by companies being implicated in deforestation allegations is concerning to us.” BlackRock’s statement also highlighted an opportunity for P&G to further align its responsible forestry disclosures with the Task Force on Climate-Related Financial Disclosures (TCFD) framework and the Sustainability Accounting Standards Board (SASB) standards.”

You may read the article on the Chain Reaction Research internet site.