Responsible Soy Procurement Policy

Background

As part of Colgate-Palmolive’s strategy to combat climate change and biodiversity loss, we are committed to an environmentally and socially responsible global soy supply chain. Colgate recognizes that soybean is one of the key commodities responsible for the majority of deforestation globally, and is a signatory to the Cerrado Manifesto Statement of Support.

In Brazil, Argentina, and Paraguay, expansion of soybean production is driving loss of highly biodiverse forest and grassland biomes, including the Amazon, the Cerrado, the Chaco, the Atlantic Forest, and the Chiquitano. Action from the soy industry is urgently needed to halt loss of native vegetation and help maintain environmental and social values. 

Colgate uses soy oil, soy meal, and soy-based derivatives in some personal care products and Hill’s Pet Nutrition products. Our soy based materials originate in the United States, Europe and South America. To address the impact of soy on global deforestation, Colgate has joined the Consumer Goods Forum - Forest Positive Coalition. As a Coalition member, we support the Coalition’s actions to eliminate deforestation and forest conversion associated with commodity supply chains, including soy.  Aligned with other Coalition members, Colgate is committed to delivering on goals as established in the Coalition’s Soy Roadmap.

To support Colgate’s overarching No Deforestation Policy we have implemented this commodity-specific soy policy that outlines our commitment, vision and actions we are taking for the responsible sourcing of soy-based materials.

Scope

This policy applies to all direct soy-based materials sourced by Colgate-Palmolive operations, subsidiaries, and joint ventures worldwide. The policy commitments extend to all direct soy products and soy derivatives Colgate purchases from third party suppliers. Colgate expects suppliers to apply this policy throughout their soy supply chain, including all direct soy products produced, purchased, or traded, and all operations including landholdings, joint ventures, and third party suppliers.

In addition to direct purchased soy-based materials, Colgate also has indirect or embedded soy in our soy supply chain footprint, primarily as feed for animal-based products used in our Colgate and Hill’s Pet Nutrition Products.  Beginning in 2021 we included indirect / embedded soy in the scope of this policy and initiated the process of engaging with embedded soy suppliers within that extended supply chain.  

The policy applies across all geographies globally where soy is originated. Pursuant to the policy, we will initially focus on soy products originating in South America, particularly the Cerrado and the Amazon in Brazil, and the Chaco in Argentina and Paraguay. These biomes are priorities due to the high rate of native vegetation loss driven by soy production, and their significant environmental and social values, including biodiversity, carbon storage, hydrologic services, and cultural value.

Our Commitment

Colgate-Palmolive aspires to build a transparent and responsible soy supply chain, and contribute to industry level transformation. We commit to eliminating exploitation and conversion of native vegetation from our soy supply chain, and promote the protection of areas of significant environmental and social value.

Our specific commitments in the soy supply chain are as follows:

• No deforestation and no conversion of native vegetation

• No exploitation of people or local communities

• Good agricultural practices

• Legal compliance

No Deforestation and No Conversion of Native Vegetation

We commit to eliminating conversion of native vegetation with significant environmental or social value from our soy supply chain. This commitment prohibits both deforestation of forested biomes such as the Amazon, and conversion of native vegetation in grassland or savannah biomes such as the Cerrado. Wherever possible, soy production should occur on already converted or degraded land.

We will use High Conservation Value (HCV) concepts to guide implementation of this commitment. We expect suppliers and soy growers to identify and protect areas with attributes aligned with the six HCV values, including significant concentrations of biodiversity; landscape level ecosystems; rare, threatened or endangered ecosystems; areas providing important ecosystem services; and areas critical to the cultural identity and needs of local communities.(2) Colgate encourages landscape approaches and multi-stakeholder land use planning to identify areas of significant social and environmental value.

We recognize that HCVs have not widely been identified across soy producing regions, and a scalable methodology does not yet exist for implementation of the HCV methodology in the soy supply chain. We encourage the industry to promote development of a scalable methodology for identification of areas of significant environmental and social value, particularly in South America. Colgate welcomes solutions developed through multi-stakeholder collaboration, and is open to adopting such solutions for implementation of this policy.

No Exploitation of People or Local Communities

Respect for Human and Labor Rights

Guided by the UN Declaration on Human Rights and the UN Guiding Principles on Business and Human Rights, under a policy of no exploitation, Colgate-Palmolive requires its suppliers at all tiers and across all global operations at a corporate group level to commit to: no child or forced/bonded labor; no unethical recruitment practices; and no discrimination or harassment in its supply chain. Suppliers must be compliant with all relevant laws and regulations and additionally commit to working conditions, health and safety, hours and wages that are in accordance with International Labour Organization standards. Written contracts, where required by law, will be provided to all workers in a language that they understand that details the nature of the work, rate of pay and pay arrangements, working hours, vacation and other leave, and other benefits of employment. Freedom of association and right to collective bargaining will also be guaranteed. Colgate supports the Consumer Goods Forum (CGF) Industry Resolution on Forced Labor and the Priority Industry Principles in which every worker should have freedom of movement, no worker should pay for a job and no worker should be indebted or coerced to work.  Colgate is a member of the CGF - Human Rights Coalition - Working to End Forced Labour.

Land Tenure Rights

Colgate-Palmolive suppliers will respect the legal or customary land-tenure and use rights of indigenous and local communities, as well as their rights to give or withhold their free, prior and informed consent (FPIC) for operations affecting their land or resources.  Soybean growers in Colgate’s supply chain are expected to demonstrate legal title for the property where soybean originates, including official documents demonstrating the farm boundaries. Suppliers are expected to gather information about social conflict in their soy supply chain, and ensure they are not sourcing from growers involved in illegal land acquisition or conflict with local communities.

Conflict Resolution

• Colgate-Palmolive suppliers will resolve complaints and conflicts through a mutually agreed upon and transparently documented system that is implemented and accepted by all relevant parties.  

• Violence or retaliation by suppliers or upstream producers against human rights defenders or local communities will not be tolerated.

Good Agricultural Practices

Colgate encourages implementation of regenerative agriculture practices at the farm level. Good agricultural practices should contribute to improved soil health, carbon sequestration, and on-farm biodiversity. Relevant practices include responsible use of fertilizers, pesticides, and herbicides; responsible use of water; soil health practices; personal protective equipment; responsible waste management; and management of soil to prevent erosion and build soil health. Suppliers are expected to encourage good agricultural practices among soy growers, gather information about farmer practices, and share guidance on best practices appropriate to the local context.

Legal Compliance

Colgate commits to compliance with all applicable laws and regulations at the national and international levels. Suppliers must demonstrate compliance with legal requirements, e.g. the Brazilian Forest Code, and registration and compliance with the Rural Environmental Registry. We will exclude any soy produced on illegally deforested or converted land from our supply chain.

Our suppliers are expected to apply this policy at the corporate group level across all operations including landholdings, joint ventures and third-party suppliers.

Furthermore, it is expected that all suppliers of forest risk commodities, including palm oil, soy, pulp & paper packaging and beef and beef tallow; implement a NDPE policy aligned with our No Deforestation policy and this commodity specific soy policy.

Transparency and traceability

Colgate-Palmolive is committed to transparency in implementation of our Responsible Soy Procurement Policy.  Colgate will strive to achieve visibility over our direct soy supply chain by gathering traceability information for our direct soy products. The objective of traceability is to identify soy origins and associated risks, and facilitate monitoring. The ultimate traceability goal is to farm level, though Colgate will gather interim levels of traceability while the industry builds greater visibility. Colgate will regularly report progress on traceability.

In 2022, we engaged Colgate’s direct soy and soy derivative suppliers on both policy implementation and CGF Forest Positive Coalition expectations as well as traceability aligned with the Forest Positive Coalition soy road map.  This engagement accounted for approximately 72,000 MT  of soy and soy-based derivatives (glycerin) which represents greater than 95% of Colgate’s direct soy volumes.  Based on the RTRS calculation methodology we have calculated our direct soy footprint shown in the table below.

Ingredient Type	Footprint	% of CP Total
Soybean Meal/Oil	38,247.95	39%
Soy-based Glyceride	58,733.49	61%
Total	96,981.43	100%

Through our engagement and mapping exercise we were able to map 100% of our direct soy footprint to the country of origin.  

Soy Country of Origin and % Volume Risk Category

 

Countries of Origin	Low Risk Countries	High Risk Countries	Unknown Country
USA	62%	N/A	N/A
Russian Federation	4%	N/A	N/A
Argentina	N/A	26.7%	N/A
Brazil	N/A	7.9%	N/A
Risk type	65%	34.5%	0%

Based on our traceability exercise, approximately 60% of our volume was traceable to the crusher in the country of origin.  

Of the volumes identified as originating from high risk countries (34.5%) and with limited biome and farm traceability we were able to identify the presence of high risk biomes based on supply chain nodes provided  which likely include the Amazon, Cerrado and Gran Chaco.  To mitigate sourcing risk from high risk geographies, Colgate sources 100% of our direct soybean meal and oil from South America as certified sustainable soy under the Proterra Certification standard.  

Traceability and Certification of Volumes from High Risk Countries

Material from High Risk Countries	Material type	Traceable to Origin Country	Traceable to Biome presence	Traceable to crusher presence	Traceable to elevator presence	Proterra Certified Mass Balance
Glycerine	21.4%	21.4%	11.2%	11.2%	11.2%
Soy oil & meal	13.1%	13.1%	13.1%			13.1%
Global Totals	34.5%	34.5%	24.3%	11.2%	11.2%	13.1%

Note: “presence” is used because a list of direct supply chain nodes were provided, but not individual volumes.

Working With Our Suppliers

Colgate views our suppliers as partners in achieving a responsible soy supply chain and we collaborate with suppliers throughout the supply chain to implement our commitment. In 2021, we published an updated version of our responsible soy policy.  Suppliers of direct soy products to Colgate are expected to meet the requirements of this policy, and implement equivalent policies for their own operations.  In addition to traceability, in 2022, we engaged our top direct soy and soy derivative suppliers , representing approximately 95% of Colgate’s volume, on policy implementation and alignment with the Forest Positive Coalition (FPC) expectations.  Colgate’s top direct soybean meal and oil and soy derivative suppliers include:

 

Cargill	Bunge
ADM	Olfar

We executed this engagement by way of direct supplier meetings and a survey to measure alignment with elements of Colgate’s policy and the FPC expectations.  The cumulative results of the survey are shown in the table below.

Response	Soy policy	Report farm level traceability - direct	Report farm level traceability - indirect	Time bound implementation plan	Methodology for prioritizing, assessing and engaging suppliers	Target date for no conversion supply	Landscape or sectoral level transformation projects
No	57%	57%	57%	57%	57%	57%	33%
Yes	43%	43%	43%	43%	43%	43%	67%

 

Response	Grievance Mechanism	Public grievance reporting	Non-compliant supplier mechanism/process	Progress reporting on time bound implementation	Types of No Deforestation and/or No Exploitation monitoring - Spatial monitoring	Types of No Deforestation and/or No Exploitation monitoring - Audits	Types of No Deforestation and/or No Exploitation monitoring - Independent verification
No	29%	57%	29%	57%	57%	57%	57%
Yes	71%	43%	71%	43%	43%	43%	43%

We continue to work with our direct suppliers to source deforestation and conversion-free soy products.  We expect our suppliers to provide traceability data for their soy supply chain and to achieve traceability ultimately back to the farm when sourcing from high risk biomes and municipalities and to implement no deforestation or conversion policies for their own operations and their supply chain.  We will continue to engage with and measure performance against our policy expectations.  In the event of non-compliance with this policy, Colgate will work with suppliers to create an action plan outlining time bound commitments to meet our requirements. If a supplier is unable or unwilling to take the necessary actions to conform to the expectations outlined in our policy, Colgate-Palmolive may terminate the business relationship with the supplier.

Indirect / Embedded Soy

In 2020 we conducted our initial soy footprint for our indirect soy volumes which we have recently updated to reflect our 2021 volumes.  During 2021, working with our partner Earthworm Foundation, we conducted an initial engagement on policy implementation with one of Colgate’s largest suppliers of poultry based materials, representing approximately 20% of our embedded soy footprint.  Based on our 2021 indirect / embedded soy analysis we identified that approximately 151,000 metric tonnes fall in the indirect soy footprint.  For our indirect soy footprint we followed RTRS soy conversion and footprint calculation methodology and the Consumer Goods Forum ( CGF ) Soy Measurement Ladder (Tiers Definitions).  Colgate’s Soy footprint, by % tier is shown in the table below indicating that our indirect soy footprint represents approximately 81% of Colgate’s total soy footprint.  

Colgate’s Soy Footprint by Tier (%)

 

Soy Tier	% Volume
Tier 1	9%
Tier 2	52%
Tier 3	1%
Tier 4	38%

Monitoring and Verification

The goal of this policy is to monitor and verify direct  supplier compliance with this policy. Traceability information will facilitate monitoring land use change at farm level. Colgate expects suppliers to demonstrate compliance with the policy in their own supply chain, including conducting verification and geospatial monitoring of their supply base. We will give preference to suppliers whose soy products have been independently verified to be in compliance with Colgate’s soy policy.

We will take a step-wise approach to verification. As an interim measure, Colgate-Palmolive will strive to procure only soy products from South America that have been verified by a credible certification scheme, such as Proterra and RTRS, to verify low risk of sourcing soy contributing to deforestation. Since 2018, 100% of the direct soybean meal and oil products Colgate-Palmolive purchases in South America are certified.

Collective Action

Colgate recognizes the need for industry collaboration to achieve a transparent and conversion free soy supply chain. We will continue to support existing efforts to minimize deforestation due to soy expansion in Brazil, such as the Soy Moratorium. 

Colgate as a member of the CGF - Forest Positive Coalition will continue to work with member brands and retailers to drive change within our supply chains and engage beyond the coalition with NGOs, CSOs, governments, local communities and other stakeholders to transform social and environmental practices in the soy industry. 

Colgate will support multi-stakeholder efforts to develop methodologies to identify and monitor high conservation value areas. Colgate recognizes the importance of farmer incentives to implement sustainability standards beyond legal requirements, and will participate in discussion of industry funding mechanisms for conversion and deforestation-free soy. 

Colgate encourages industry collaboration on transformation, and through our participation in the CGF Forest Positive Coalition, we will seek opportunities to collaborate in landscape and jurisdictional projects focused on driving transformation in the soy industry.

Moving forward, planned implementation activities include:

• Building on our most recent traceability learnings; Gather additional traceability data from prioritized expanded list of suppliers reaching further upstream in the supply chain; (2023)

• Expand our risk assessment to identify sourcing areas with social and environmental risk; (2023)

• Continue to Socialize Colgate’s soy policy with direct  suppliers; (ongoing)

• Based on prior indirect soy footprint, continue engagement with priority indirect / embedded soy suppliers to understand supply chain and indirect soy risk (2023)

• Continue engaging suppliers on traceability of all direct soy back to the 1st aggregator or crusher in origin country (100% traceable to aggregator or crusher in country by 2025)

We will provide updates on our progress against the above implementation actions in annual updates to this soy policy.

 

Last Updated: July 2023