Environmental groups protested against the board of directors; Procter & Gamble says its sourcing from Canadian woodlands is sustainable
Ahead of the company’s annual meeting on Tuesday, groups say they are targeting Briley because, as head of the board’s governance and public responsibility committee, she is responsible for addressing climate issues. He is also a director at Exxon Mobilla. Corporation
, which has faced pressure to accelerate emissions reductions as its oil and gas rivals shifted to renewable energy.
Shareholders of large companies have generally rejected efforts by special interest groups to promote management to do more on social issues, from gender rights to climate change. This trend is beginning to change as big asset managers like BlackRock Inc.
And Vanguard Group has begun challenging the companies over proxy votes.
Ms Breely, former chief executive of health insurer Wellpoint Inc., has served on P&G’s board since 2009 and was re-elected to Exxon.‘s
The board took the decision earlier this year amid objections from the same environmental groups and BlackRock. Directors rarely lose their seats in such votes, especially when opponents are not pushing an alternate candidate; Still, a percentage of the negative vote can indicate shareholder dissatisfaction.
Environmental groups argue that P&G is contributing to the destruction of Canada’s boreal forest, from which the company sources some of its paper products. Woodlands cover 35% of Canada’s land mass and aid in Earth’s environmental balance by producing oxygen and storing carbon.
P&G says its practices are sustainable and takes steps to ensure that forests are not destroyed in sourcing its products. It says it replaces twice as many trees as it cuts. Ms Briley declined to comment via P&G, which said in a statement that it is “proud of our diverse set of active, capable and hardworking board members, including Ms.
Supporting the efforts of environmental groups in the P&G vote are several generations of family members, descendants of P&G founders William Proctor and James Gamble, who started the Cincinnati-based company 180 years ago.
“None of us expected this resolution to be passed last year. We thought if you get 30%, it’s a win,” said Justin Epstein, 29, who says she is a sixth-generation descendant of James Gamble. Ms Epstein, along with her brother Jules Feeney, 26, plan to vote against Ms Briley at Tuesday’s meeting, which will be held virtually.
Contrary to the 2020 proposal, proxy advisory firm Glass Lewis and Institutional Shareholder Services have recommended investors to re-elect Ms Breely to P&G’s board. BlackRock declined to comment on its voting plans this year.
BlackRock, the world’s largest asset manager, protested earlier this year the re-election of Briley as well as another director to Exxon’s board. the firm quoted “Insufficient progress” on climate action and financial disclosure.
Nearly two-thirds of P&G’s shareholders, including BlackRock, Vanguard and State Street Corporation
, voted last year to ask the company to publish a paper on its efforts to stop deforestation. P&G urged investors to vote against the measure proposed by the Green Century Equity Fund, which encourages companies to adopt sustainable practices through advocacy and its investments.
In a report prepared after the vote, P&G said it has strengthened its policy on sourcing wood pulp and is moving toward recycled materials for packaging.
Environmental groups say P&G should rely more heavily on recycled materials for the products themselves. The company has stated that tissues and toilet paper made from recycled materials do not meet consumer expectations and that there is not enough recycled fiber available to supply an adequate supply of consumer paper products.
“We play a vital role in ensuring the sustainability of the world’s forest resources through our procurement and construction practices,” the company said in its report.
Environmental groups say P&G has not done enough to reduce its reliance on Canada’s boreal forest or to shift sourcing for recycled materials.
Green Century Equity Fund shareholder advocate Thomas Peterson said last year’s vote demonstrated dissatisfaction with P&G’s sourcing practices. He declined to explain how the fund plans to vote on P&G’s directors.
Social and environmental issues are gaining traction in shareholder votes as fund managers are willing to exercise power in visible ways, and other investors are set to follow suit.
According to proxy advisor ISS, public-company shareholders have filed 90 climate-related shareholder resolutions this year, up from 58 a year ago. The ISS said most were withdrawn after talks, leaving 26 proposals on the ballots, compared to 10 in 2020. A record 11 climate-related proposals received support from a majority of voters this year, compared with five last year and none in 2019.
In May, 99% of Bungee Ltd.
Shareholders voted for a proposal to the agribusiness giant to report on efforts to stop deforestation.
The Securities and Exchange Commission last month sent letters to dozens of public companies asking investors to provide more information about how climate change could affect their financial earnings or business operations.
Enver Fitch, ISS head of environmental and social proxy research, said the growing support is a sign that investors have higher expectations about transparency beyond purely financial matters. “Concurrently, a growing number of mainstream investors are adopting the view that environmental and social issues are important to shareholder value,” he said.
Sharon Terlep at [email protected]