Fortune Investigates Kimberly-Clark Forestry Practices

On Wednesday, Fortune magazine weighed in on the continuing conflict between paper products giant Kimberly-Clark and environmental groups Greenpeace and the National Resources Defense Council. While K-C maintains that it's an "environmental leader" in its industry, the green groups allege that the maker of Kleenex, Huggies, and Depend violates its own sustainability policies by sourcing fiber from a number of Canadian old-growth forests. According to Fortune senior writer Marc Gunther, the issues here are pretty complex, but Kimberly-Clark has definitely not lived up to its own claims:

Here's the problem, though. It's hard to trust Kimberly-Clark because the company's actions have not lived up to its rhetoric. The company has often said - prominently in its 2005 sustainability report and as recently as March, 2006, in its proxy statement to shareholders - that its corporate policy "prohibits the use of wood fibers from ... ecologically significant old-growth areas, including ... temperate rainforests in coastal British Columbia."

Several months later, Greenpeace researchers who dug into U.S. Customs records and questioned K-C suppliers issued a report called "Chain of Lies" saying that K-C was, in fact, purchasing wood fiber from the coastal forests in British Columbia.

Subsequently and to its credit, K-C did an internal review and found that it had, in fact, "purchased a small amount of wood chips" that were "derived from logs harvested from the British Columbia coastal area."

Oops.

The company also said that its policy had since 2003 permitted the use of wood that is harvested sustainably from the B.C. coastal forests - thereby undercutting the claims it made in 2005 and 2006.

By e-mail, Dickson, the K-C spokesman, conceded that "some of our recent public statements have reflected a higher standard than this policy requires and have overstated our actual practices (emphasis added)."

Translation: K-C misled the public.

It did so, moreover, at a time when it was being watched by Greenpeace, the NRDC and Domini Social Investments, a socially-responsible mutual fund company that had been asking K-C to improve its forestry practices.

Even Wal-Mart has gotten involved, with CEO Lee Scott meeting with K-C CEO Tom Falk in order to ask the paper producer to "clean up its act." Gunther notes, "To be fair, Scott also told me he came away impressed with Falk's commitment to the environment." Still, K-C is holding its ground, and refusing to study the possibility of phasing out the use of wood not certified by the Forest Stewardship Council (FSC), a move suggested by Domini. While Fortune certainly doesn't offer support for calls to boycott Kimberly-Clark products, Gunther does write that the proposed study "...doesn't seem like too much to ask." ::Fortune/CNNMoney

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