Procter & Gamble, the company named by Greenpeace, said on Thursday that it will conduct an independent investigation into the allegations.
In a report published Wednesday following a year-long investigation, Greenpeace said Procter & Gamble has been sourcing palm oil from three suppliers - PT BW Plantations Tbk and PT Musim Mas of Indonesia and Kuala Lumpur Kepong Berhad of Malaysia - which allegedly violate Indonesia's forestation rules in their palm oil production process.
"Greenpeace investigations identify deforestation or other problematic issues linked to these suppliers either directly or through third-party suppliers," the report said.
Jakarta-based PT BW Plantations Tbk, according to Greenpeace, was involved in destroying the orangutan habitat in the Indonesian part of Borneo Island.
Last year, in a joint investigation with the Bali-based Friends of National Parks' Foundation, Greenpeace documented an orangutan skull being buried in a shallow grave, just a few metres away from the company's concession in Borneo's central Kalimantan province.
More orangutan remains were later found in the company's plantations located near Tanjung Putting National Park by the end of 2013, Greenpeace said. The case is now under police investigation.
In the middle of last year, Indonesian police also named Kuala Lumpur Kepong Berhad's company in Indonesia, PT Adei, as one of the companies suspected of setting off forest fires in Sumatra's Riau Province to clear land. A Malaysian executive of the company has been detained.
PT Musim Mas, Greenpeace says, has been linked to deforestation, including destruction of the orangutan habitat in Sumatra and Borneo and has expanded their concessions to heavily forested areas in the easternmost Papua province.
"We've been confronting P&G over the last eight months with how it's exposing consumers to forest destruction," said Areeba Hamid, forest campaigner at Greenpeace International.
Responding to the allegations, P&G said it is committed to the sustainable sourcing of palm oil.
"In fact, as part of our sustainability goals, we have committed to 100% sustainable sourcing of palm oil by 2015," P&G spokeswoman Lisa Popyk told Kyodo News, saying it is working with its suppliers in order to fulfill the commitment.
"Deforestation is a significant issue and (we) take any allegation of impropriety by our suppliers very seriously," Ms Popyk said, adding that her company has already begun an investigation into the claims made in the Greenpeace report.
P&G is one of the world's biggest producers of cosmetics, personal care products and household detergents. Palm oil is a common ingredient in detergents, shampoos, cosmetics and other household goods.