Building a Future to Smile About.
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.
We care about Colgate people, customers, consumers, shareholders and business partners. Colgate is committed to acting with compassion, integrity, honesty and high ethics in all situations and to listening with respect to others, and to valuing differences. The Company is also committed to protecting the global environment, to enhancing the communities where Colgate people live and work, and to complying with government laws and regulations.
All Colgate people are part of a global team, committed to working together across countries and throughout the world. Only by sharing ideas, technologies and talents can the Company achieve and sustain profitable growth.
Colgate is committed to improving every day. By better understanding consumers’ and customers’ expectations and continuously working to innovate and improve products, services and processes, Colgate teams and individuals will become the best at what we do.
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 required reports with the U.S. Securities and Exchange Commission (SEC). Our Annual Report on Form 10-K highlights risks material to an investment in the Company’s securities, including 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; and the adverse impact of climate change.
Refer to Item 1A. RISK FACTORS in our Annual Report on Form 10-K for the year ended December 31, 2018 for the material risks relating to an investment in our securities.
While not considered material from an SEC point of view, Colgate has identified a set of key sustainability issues for the Company, taking into account the issues of interest to our stakeholders.
Colgate has categorized and prioritized the sustainability issues with the most potential to affect our operations or supply chain, or to create regulatory or reputational risk. These issues are reviewed and governed by the Sustainability Steering Committee led by the Company’s Executive Vice President, Chief Growth and Strategy Officer, who oversees sustainability. In addition to risk, we considered whether an issue has potential to create shared value for both Colgate and society. The chart below summarizes key sustainability issues:
Key Sustainability Issues
Colgate is conducting an updated prioritization assessment process to identify our key sustainability issues, risks and opportunities. This process will not only help us devise our 2025 sustainability strategy, but it will also help us to gather feedback and data from around the world and to build an effective monitoring mechanism to monitor sustainability-related matters. Our updated assessment process has three pillars that are designed to expand the scope and depth of the information we collect from our stakeholders is:
Conduct an Employee Sustainability Survey to ascertain our employees’ interests and motivation with respect to sustainability, to understand what employees think Colgate should focus on to become a more sustainable company and to improve our communication around sustainability and our achievements in this area;
Hold discussions with subject matter experts to identify sustainability-related risks and opportunities that are relevant to their respective areas of responsibility; and
Identify key topics that are frequently addressed by our external stakeholders.
Based on the Risk Factors identified in our Annual Report on Form 10-K, our top sustainability risks are Product Stewardship, Climate Change and Responsible Sourcing.
Colgate is managing risks and opportunities related to these issues through the implementation of our 2015 to 2020 Sustainability Strategy. Through our Enterprise Risk Management process, we are focused on the environmental and social impact risk of plastic waste as well as climate and water scenario planning. 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.
Our key sustainability issues also intersect with the following GRI Standards important for our internal and external stakeholders: Economic Performance, Materials, Energy, Water, Emissions, Effluents and Waste, Products and Services, Compliance, Transport, Occupational Health and Safety, Training and Education, Diversity and Equal Opportunity, Local Communities, Public Policy, and Service Labeling.
Colgate strives to create and maintain transparent communication with a wide variety of stakeholders. Our sustainability commitments and goals are developed with the input from our stakeholders, and we continue to engage with stakeholders to inform our sustainability strategy. As part of our new prioritization assessment, we have expanded the reach and methods of our stakeholder engagement, improved our feedback mechanisms through an employee survey, introduced new internal engagement tools, such as MindSpark and LinkedIn-Elevate, and encouraged direct feedback from our employees. Additionally, we have established a cross-functional team to continuously monitor our external stakeholders in different areas and discuss how we can best engage with them on an ongoing basis.
Colgate’s main stakeholder groups and examples of our engagement approach with respect to sustainability are outlined below. Read more on Colgate’s partnerships and details on our engagement.
METHOD OF ENGAGEMENT
Frequent internal communication, employee engagement surveys, digital engagement tools (MindSpark & 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, social media postings
Our retail customers and partners
Ongoing sustainability network groups, sustainability surveys, trade partner supplier expectations
Our peers and suppliers
Peer benchmarking annually via Consumer Goods Forum (CGF) membership, supplier engagement meetings, assessments and disclosure requests
Our shareholders and investor groups
Direct inquiries and feedback on an ongoing basis, face-to-face meetings, investor conferences
Government and regulatory bodies
Ongoing monitoring of regulatory activity relevant to Colgate, face-to-face meetings
Quarterly direct inquiries and feedback, face-to-face 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, face-to-face meetings annually
Direct inquiries and feedback
We recognize that transparency is important and provides a window into the Company’s performance on sustainability. It is important for Colgate to provide the sustainability information relevant to a broad range of stakeholders, including consumers, customers, investors, non-governmental organizations (NGOs), and our own employees.
Colgate acknowledges the importance of data verification and is obtaining third-party assurance for our primary environmental and social Key Performance Indicators: percentage of products with an improved sustainability profile; 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); and 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, Colgate discloses information on our sustainability progress and responds 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.Colgate’s sustainability information and the KPI table annexed also informs various ESG data sources including the Bloomberg Terminal.
Unless otherwise indicated, this report includes environmental, occupational health and safety data from 100 percent of Colgate’s 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 Strength). The report provides data for Colgate’s fiscal year 2018 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 2017.
We began the process of transitioning to the GRI Standards. The alignment of this year’s report to the new 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. We are working towards being in accordance with the Core option and plan to be fully aligned by the next year by the completion of our renewed prioritization assessment.
For inquiries, please visit Colgate’s Consumer Affairs site at www.colgatepalmolive.com.
Cautionary Statement on Forward-Looking Statements
This report, including our 2015 to 2020 Sustainability 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 Colgate’s views and assumptions as of this time, and Colgate undertakes no obligation to update these statements except as required by law. Colgate cautions 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 Colgate’s 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, 2018.
1 Although Colgate does not include the local operating results of CP Venezuela and CP Pakistan in its Consolidated Financial Statements, data from these locations are included in the calculations in this report.