Shareholder vote marks first time ever that BlackRock has supported a resolution on addressing deforestation in company supply chains.
(October 14, 2020) In what The Financial Times called an “investor rebellion,” this week Procter & Gamble shareholders, including BlackRock, voted overwhelmingly to require the world’s largest consumer goods company to step up transparency efforts to address the deforestation and forest degradation caused by its use of palm kernel oil and forest pulp in products including Bounty paper towels, Charmin toilet paper, and Ivory Soap.
BlackRock, the world’s largest asset manager and P&G’s second-largest shareholder with a 6.6% stake, reportedly voted for the resolution. This comes after years of grassroots pressure on BlackRock to hold the companies it invests in accountable for their complicity in deforestation and the biodiversity loss and Indigenous rights abuses that often go along with it. Since 2012, the world’s “Big Three” money managers – BlackRock, State Street and Vanguard – have voted against or abstained from every shareholder resolution on deforestation, as exposed by a Friends of the Earth report last month.
Members of the BlackRock’s Big Problem network gave the following statements:
“After a decade of willfully neglecting its role in driving deforestation, destruction of critical biodiversity, and human rights abuses, the world’s top asset manager finally recognized its responsibility,” said Jeff Conant, Senior International Forests Program Manager at Friends of the Earth U.S. “In that sense, this vote is a tidal shift worth celebrating. But BlackRock and other major money managers have underwritten the torches, chainsaws, and bulldozers used to destroy the world’s forests, and now they’ve simply asked Procter & Gamble to report on if and when it will reign in the destruction. It’s a very necessary step, but far from sufficient.”
“BlackRock’s support for the resolution at Procter & Gamble indicates that the firm is taking the first step towards real action on deforestation. But let us be clear, this is just the first baby step. BlackRock needs to move to adopt standard principles and approaches for protecting forests and indigenous rights,” said Moira Birss, Climate and Finance Director at Amazon Watch. “The Amazon is burning at unprecedented rates and forests around the world are falling. BlackRock needs a comprehensive policy on deforestation – including respect for Indigenous peoples’ rights – and it needs it fast, before the Amazon and other crucial forest ecosystems are gone.”
“Grassroots activists across the country recently called on BlackRock, State Street, and Vanguard to step up on climate and vote for this resolution at Procter & Gamble,” said Debbie New, a cofounder of Climate Finance Action. “This vote is an important first step for BlackRock, but pressure for substantial, impactful climate action from BlackRock and other financial leaders is mounting with the urgency of the climate crisis. We know we’re running out of time. We also know that BlackRock can and must do much more than a single vote on transparency before we can call it the climate leader it aims – or claims – to be.”
Background and Context
BlackRock has been the target of relentless efforts to address its “big deforestation problem.” Forest and indigenous peoples’ rights advocates have staged demonstrations at BlackRock offices in many countries, while Democratic Senators have challenged the firm for its failures to act on its promises to address climate risk. In June, the BlackRock’s Big Problem network laid out the principles on forests and human rights that BlackRock and other asset managers should adopt.
It remains to be seen if State Street, P&G’s largest shareholder, also supported the resolution, weeks after receiving a letter from New York City Comptroller Scott Stringer urging the firm to “prioritize addressing deforestation risks in its portfolio, both by strengthening engagement and by supporting resolutions that can help minimize the risks deforestation poses to our economy and our climate.”
Public pressure on large money managers to help stem the global deforestation crisis has been on the rise as the Amazon suffers the worst fires in a decade due to agribusiness expansion under the regressive regime of Jair Bolsonaro and as forest and land defenders worldwide face growing threats.
An investor brief shared with P&G’s top twenty shareholders prior to P&G’s October 13 shareholder meeting describes the company’s role in driving clear cut logging in the Canadian boreal forest, threatening Indigenous Peoples’ rights and ways of life, and the future of boreal caribou. The brief also documents how P&G’s palm kernel oil is linked to numerous companies engaged in deforestation and human rights abuses in Indonesia and Malaysia. Among P&G’s palm oil suppliers is Felda Global Ventures, whose palm oil is being detained by US Customs due to the company’s use of forced labor, and Golden Agri Resources, which lost its status as a green company after several top executives were arrested for bribing Indonesia officials to turn a blind eye to the company’s environmental mismanagement.
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