In March 2020 Ethical Consumer viewed Procter and Gamble's website for the company's position on the use of nanotechnology in its products. No policy or statement could be found.

Due to the fact Procter and Gamble did not have any policy or statement which stated its position on the subject, and was involved in markets in which use of nanotechnology was commonly used, e.g. cosmetics and suncream, it was assumed it was involved in the using nanotechnology in its products and lost a mark under the Controversial Technologies column.

Reference:

www.pg.co.uk (11 March 2020)

In March 2020 Ethical Consumer searched the P&G website for a cotton sourcing policy. Although the company sold products, such as tampons, made from cotton, no policy could be found.

According to Anti-Slavery international (ASI) website viewed by Ethical Consumer in August 2018, Uzbekistan and Turkmenistan were two of the world’s largest exporters of cotton, and every year their governments forcibly mobilised over one million citizens to grow and harvest cotton. Due to the high proportion of cotton likely to have come from Uzbekistan and Turkmenistan and the prevalence of forced labour in its production, the company lost half a mark in the Workers Rights category.

The Organic Trade Association website, www.ota.com, stated in July 2018 that cotton covered roughly 2.78% of global arable land, but accounted for 12.34% of all insecticide sales and 3.94% of herbicide sales. Due to the impacts of the widespread use of pesticides in cotton production worldwide the company also lost half a mark in the Pollution & Toxics category.

According to the International Service for the Acquisition of Agri-Biotech Applications (ISAAA), a non-profit pro biotech organisation, genetically modified cotton accounted for 80% of cotton grown in 2017. Due to the prevalence of GM cotton in cotton supply chains and the lack of any evidence that the company avoided it, it was assumed that some of the company's cotton products contained some GM material. As a result it lost half a mark under the Controversial Technology category.

Overall the company received Ethical Consumer's worst rating for its cotton sourcing policy.

Reference:

www.pg.co.uk (3 May 2019)

In March 2020 Ethical Consumer viewed the Procter and Gamble page on opensecrets.org. The company and its employees were listed as having given $308,857 to both left- and right-wing US political parties during the 2020 election cycle. The company had also spent $3.54m on lobbying in 2019.

The page also stated that 30 out of 34 Procter & Gamble lobbyists in 2019 had previously held government jobs.

The organization itself did not donate, rather the money came from the organization's PACs, their individual members or employees or owners, and those individuals' immediate family members. Organizations themselves cannot contribute to candidates and party committees. Totals include subsidiaries and affiliates.

P&G therefore lost a whole mark under Political Activities.

Reference:

Open Secrets generic ref 2020 (2020)

In February 2020 Ethical Consumer updated its list of the members of those groups it considered to be free trade lobby groups, exerting undue corporate influence on policy-makers in favour of market solutions that were potentially detrimental to the environment and human rights.

Procter and Gamble was listed as a member of the following free trade lobby groups:

National Foreign Trade Council (NFTC)
World Economic Forum
Business Roundtable

As a result, it lost a half mark under Political Activities.

Reference:

Ethical Consumer Lobby Group member list (19 February 2020)

According to a report on the shareaction.org website dated 2 September 2015, a global coalition of 25 institutional investors with over £45 billion in assets under management called on nine major publicly listed companies to review their membership of lobbying groups that sought to undermine EU climate policy.
The investors wrote to Proctor and Gamble and eight others, expressing concern that the companies' declared climate policies were undermined by membership of lobby groups with a track record of obstructive lobbying on climate change policy. The move came as companies were coming under increasing pressure to withdraw from regressive lobbying groups.
Based on evidence from a publication from the Policy Studies Institute (PSI) at the University of Westminster, the letters highlighted the obstructive lobbying undertaken on behalf of the companies by EU trade associations including Cefic, BusinessEurope and FuelsEurope.
PSI’s research showed how these organisations sought to weaken policies on emissions reductions and renewable energy. The lobbying on climate policy that they undertook was often at odds with the more progressive statements on the need for action on climate change the companies had publicly made.
Investors signing the letters came from three continents and included: Boston Common Asset Management, AP4 Swedish National Pension Fund, The Pensions Trust, UNISON Staff Pension Scheme, Australian Ethical Investment, Barrow Cadbury, Christopher Reynolds Foundation, The Joseph Rowntree Charitable Trust, Walden Asset Management, Sarasin & Partners LLP, Arjuna Capital, Jesuits in Britain, Zevin Asset Management LLC, Effective Assets, Barrow Cadbury Trust, LankellyChase Foundation, Polden-Puckham Charitable Foundation, The Baring Foundation, Ashden Trust, JJ Charitable Trust, Mark Leonard Trust, Tellus Mater Foundation, Mercy Investment Services Inc. and Tri-State Coalition for Responsible Investment.

The company lost half a mark under the Political Activities category.

Reference:

Leading investors call on FTSE 100 companies to leave regressive climate lobbying groups (2 Septembe

In March 2020 Ethical Consumer viewed P&G's US Securities and Exchange Commission filing Exhibit 21 for the financial year 2017-18, which listed the company's subsidiaries. P&G had multiple subsidiaries in jurisdictions on Ethical Consumer's list of tax havens at the time of writing. Of these, several were holding companies or financial companies, which were considered high risk company types for likely use of tax avoidance strategies:

Gillette Holding Company LLC - Delaware
Phase II Holdings Corporation - Delaware
Gillette Latin America Holding B.V. - Netherlands
Procter & Gamble Amazon Holding B.V. - Netherlands
Procter & Gamble Brazil Holdings B.V. - Netherlands
P&G Hair Care Holding, Inc. - Delaware
Procter & Gamble Finance Management S.a.r.l. - Luxembourg
Procter & Gamble Financial Services S.a.r.l. - Luxembourg

P&G had published a its 'Core Tax Principles' on its website. The summarised principles were:

- Tax follows business substance
- Highest level of compliance with financial and tax reporting requirements
- Robust tax stewardship and governance
- Transparency in relationships with governments and tax administrations
- Support for efficient, consistent, and administrable tax and trade policies

The company made no clear statement which explicitly mentioned tax avoidance or tax havens, nor did it explain the existence of a number of holding companies in countries considered by Ethical Consumer to be tax havens. P&G also did not publish country-by-country financial information.

An internet search using the search terms “[company name] tax policy statement country” found no country-by-country financial information or reporting (CBCR), nor clear public tax statement confirming that it was this company’s policy not to engage in tax avoidance activity or to use tax havens for tax avoidance purposes.

Overall P&G received Ethical Consumer's worst rating for likely use of tax avoidance strategies and lost a whole mark under this category.

Reference:

Form DEF 14A 2019 (11 March 2020)

In March 2020 Ethical Consumer viewed P&G's US Securities and Exchange Commission (SEC) filing DEF 14A Proxy Statement August 2019, which included details of executive pay. According to this filing, the lowest-paid named executive officer was paid a total of $5,988,555 and the highest paid (the CEO) received payments totalling $20,498,812.

Ethical Consumer considered payments over £1 million to be excessive. P&G therefore lost half a mark under Anti-Social Finance.

Reference:

Form DEF 14A 2019 (11 March 2020)

A report published by Citizens for Tax Justice on October 2016 criticized US tax policy on large multinational corporations. Many multinational corporations used accounting tricks to pretend for that a substantial portion of their profits were generated in offshore tax havens, countries with minimal or no taxes where a company’s presence could be as little as a mailbox.

The study examined the use of tax havens by Fortune 500 companies in 2015. It revealed that tax haven use was ubiquitous among America’s largest companies and that a narrow set of companies benefited disproportionately.

Amongst these companies Procter & Gamble was named as one of the Top 30 companies with the most money held offshore.
It was found to maintain 35 subsidiaries in the following tax havens: Costa Rica (1), Hong Kong
(1), Ireland (1), Lebanon (1), Luxembourg (3), Netherlands (17), Panama (1), Singapore (3) and Switzerland (7). The amount held offshore was $49 billion. Neither the overall rate of the tax paid on this overseas cash, nor any estimate of the US tax avoided, were disclosed.

The company lost half a mark under this category.

Reference:

Offshore Shell Games 2016 (October 2016)