2020 Sustainability Management
Discover how Sustainability is managed at Colgate-Palmolive and
how our strategy is integrated into our business model and our values.
Sustainability is integrated into Colgate’s business model and aligned with our core values: Caring, Global Teamwork and Continuous Improvement. Our sustainability efforts help ensure our business grows consistently and responsibly, benefits those we serve and promotes the well-being of future generations.
In order to further refine and build upon Colgate’s sustainability strategy, in 2019, Colgate conducted a Stakeholder versus Business Impact assessment. This assessment is recognized by the Global Reporting Initiative (GRI) as a Materiality assessment. We refer to this as a Sustainability Impact Assessment.(1)
We conducted our Sustainability Impact Assessment to meet the expectations of our external stakeholders and to help inform our business decisions. To do so, we first created an extensive list of sustainability-related issues by examining a large number of internal and external sources including the United Nations Sustainable Development Goals (UNSDGs), Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), Environmental, Social, and Governance rating tools (Dow Jones Standards Indices (DJSI), CDP, Institutional Shareholder Services (ISS), Just Capital, Sustainalytics and Morgan Stanley Capital International (MSCI)), peer reviewed scientific research, industry reports, consumer insights data and employee feedback.
We then assessed the interrelations between these sustainability-related topics and our business through the lenses of risks and opportunities. By conducting a large employee survey, we asked our employees where Colgate can make the biggest impact. We held in-depth interviews with Colgate subject matter experts and function leads to align our findings with business priorities and analyzed data from our consumers to identify moving trends in the market. We received nearly 8,000 responses from over 100 countries. As a result, we have developed the “Sustainability Impact Matrix” presented below.
The matrix above shows our key sustainability issues, categorized by the impact on our stakeholders and our business in alignment with our three sustainability pillars under our 2015 to 2020 Sustainability Strategy, People, Performance and Planet. These issues also intersect with the following GRI Standards and define the content of this report: Economic Performance, Materials, Energy, Water, Emissions, Effluents and Waste, Products and Services, Compliance, Transport, Environmental Health and Safety, Training and Education, Diversity and Equal Opportunity, Local Communities, Public Policy, and Service Labeling.
This report also addresses our efforts to respond to the COVID-19 pandemic and to become an even more diverse, equitable and inclusive company. While we have not changed the sustainability impact matrix we created in 2019, we plan to continue our materiality assessment and to update it in light of these events and our 2025 Sustainability and Social Impact Strategy. We plan to include this new matrix in our 2021 Sustainability Report.
Colgate is managing risks and opportunities related to these issues through the implementation of our 2025 Sustainability and Social Impact Strategy. Through our Enterprise Risk Management process, we are focused on sustainability as a critical risk, including the environmental and social impact risk of plastic waste, climate change and water scarcity and access. These same issues also provide an opportunity to drive innovation and growth, strengthen brand reputation and demonstrate our commitment to responsible business practices. Additional detail on each of the issues and our actions to address them is provided throughout the content of the website.
As reflected in the Risk Factors identified in our 2020 Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q, responsible sourcing and deforestation, the use of plastic, energy and water, the recyclability or recoverability of packaging, including single-use and other plastic packaging, and ingredient transparency are addressed among the sustainability-related risks facing the company.
(1)This report reserves the term “materiality” only to address issues that are deemed material from the point of view of the U.S. Securities and Exchange Commission (SEC). Topics that are important from a sustainability point of view in relation to our business, as defined in the GRI Guidelines and other reporting frameworks, are listed under the Key Sustainability Issues section. As a publicly traded company, Colgate files periodic reports with the U.S. Securities and Exchange Commission (SEC). Our 2020 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q include material factors that make an investment in our company speculative or risky, including, but not limited to, those relating to sustainability, namely: volatility in commodity prices; changes in regulatory requirements relating to ingredients in our products; changes in policies or practices of retail trade partners, such as with respect to the environment or sustainability; damage to our reputation relating to environmental impacts or other sustainability issues; disruption to our global supply chain or key office facilities by environmental events; disruptions in logistics; damage from industrial accidents or other occupational health and safety issues; losses caused by natural disasters, including climate events; the impact of epidemics, pandemics and other widespread health concerns, including the COVID-19 pandemic; and the adverse impact of climate change and other sustainability matters. Refer to “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 and Part II, Item 1A of subsequent Quarterly Reports on Form 10-Q for additional information. In determining whether information is material, we also consider if there is a substantial likelihood that a reasonable investor would consider such information important in deciding how to vote or make an investment decision, or if the information would alter the total mix of available information.
Colgate strives to connect with a wide variety of stakeholders so they can provide input on our sustainability strategy, particularly in terms of our goals and targets. We continue to expand the reach and methods of our stakeholder outreach, enabling us to deepen our level of engagement. We have increased employee feedback through mechanisms, such as employee surveys, and opportunities for employees to engage directly with senior leadership on sustainability topics. Additionally, we have a cross-functional team to continuously monitor our external stakeholders in different areas and discuss how we can best engage with them on an increasingly productive basis. Colgate’s main stakeholder groups, with examples of our engagement approach for each group with respect to sustainability, are outlined below.
METHOD OF ENGAGEMENT
Frequent internal communication, employee engagement surveys, digital engagement tools, such as MindSpark and LinkedIn-Elevate, geographic sustainability teams, internal subject matter experts, quarterly sustainability steering team reviews.
Integrated marketing communications, including those addressing “brand purpose,” ongoing consumer dialogue, consumer surveys and social media and digital engagement.
Our retail customers and partners
Ongoing sustainability network groups, sustainability surveys, partnering with customers to encourage sustainable habits with consumers and promote sustainable products.
Our shareholders and investor groups
We participate in direct engagement on sustainability with our largest shareholders through virtual and in-person dialogues on these matters as a standalone topic or as part of regular investor interactions. These interactions can include response to direct inquiries, individual or small group meetings, and conferences.
Government and regulatory bodies
Ongoing monitoring of regulatory activity relevant to Colgate, meetings and engagement through trade associations.
Quarterly direct inquiries and feedback, virtual and in-person meetings, participation in boards, advisory councils and partnership programs, reporting and disclosure expectations.
Industry trade associations
Ongoing participation in sustainability steering and working groups.
Local communities and community groups
Direct inquiries and feedback, virtual and in-person meetings, engagement with local communities and schools, including through our Bright Smiles, Bright Futures oral health education program.
Direct inquiries and feedback.
We recognize that transparency is important and provides a window into our performance on sustainability. In this report, we provide sustainability information relevant to a broad range of stakeholders, including consumers, customers, investors, non-governmental organizations (NGOs) and our own employees.
We acknowledge the importance of data verification and obtain third-party assurance for our primary environmental and social Key Performance Indicators: percentage of products with an improved sustainability profile; number of zero-waste certified sites; manufacturing carbon reduction per ton (of production); manufacturing energy reduction per ton (of production); manufacturing water consumption per ton (of production); waste-to-landfill per ton (of production); outbound logistics carbon per ton (of goods shipped); number of hours worked; number of lost-time incidents; number of recordable incidents and number of occupational fatalities.
In this report and other channels, we disclose information on our sustainability progress and respond to several rating organizations, including CDP Climate, CDP Water, CDP Forest and CDP Supply Chain, RobecoSAM (to inform the Dow Jones Sustainability Index rankings), JUST Capital, MSCI and Sustainalytics. Our sustainability information and the KPI table annexed also informs various ESG data sources including the Bloomberg Terminal.
Unless otherwise indicated, this report includes environmental, health and safety data from 100 percent of our manufacturing sites and technology centers around the world, but does not include data from contract manufacturers.(1) Certain information relates to our broader value chain. Supplier Responsible Sourcing Assessment program data includes selected contract manufacturers, warehouses and suppliers; our greenhouse gas and water footprints include additional data from upstream and downstream in our value chain and progress on our Policy on No Deforestation includes selected suppliers. Financial information is presented on a consolidated basis and in U.S. dollars (see Business Priorities). The report provides data for Colgate’s fiscal year 2020 along with historical information and more recent updates where indicated. We issue our Sustainability Report on an annual basis; our previous report focused on fiscal year 2019.
This report has been prepared in accordance with the GRI Standards: Core option. The alignment of this year’s report to the GRI framework can be found in our GRI Content Index. There are no significant changes in the scope of our report or the key sustainability issues identified. Please see our 2020 GRI Content Index for more details.
Cautionary Statement on Forward-Looking Statements
This report, including our 2015 to 2020 Sustainability Strategy and our 2025 Sustainability and Social Impact Strategy, contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (SEC) in its rules, regulations and releases. These statements are made on the basis of our views and assumptions as of this time, and we undertake no obligation to update these statements except as required by law. We caution investors that such forward-looking statements are not guarantees of future performance and that actual events or results may differ materially from these statements due to a number of factors. For information about factors that could impact our business and cause actual results to differ materially from these forward-looking statements, please refer to our filings with the SEC, including the information set forth under the caption “Risk Factors” in Colgate’s Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent Quarterly Reports on Form 10-Q.
(1) Although we do not include the local operating results of our subsidiaries in Venezuela and Pakistan in our Consolidated Financial Statements, data from these locations are included in the calculations in this report. Recent acquisitions of our skin health and oral care businesses, EltaMD, Filorga, hello and PCA Skin, are not included in calculations referenced throughout this report, but they are consolidated for financial reporting purposes after their respective date of acquisition.