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Palm oil

Background

At Colgate-Palmolive Company (Colgate) we support a vision for a future without deforestation. This commitment is grounded in our core values of caring, global teamwork and continuous improvement. We have an overarching Policy on No Deforestation covering the following forest commodities: palm, soy, beef & beef tallow and pulp and paper. This is a commodity-specific policy that addresses palm oil.

Palm oil is the most widely produced vegetable oil in the world and continues to grow in its use, replacing other vegetable oils. More than 85 percent of the world’s palm oil comes from Indonesia and Malaysia, where land is sometimes converted from forest to palm plantations, resulting in greenhouse gas emissions, impacts on biodiversity, and social issues linked to deforestation.

Colgate uses palm oil, palm kernel oil and palm oil derivatives in some of our soap products, toothpastes, antiperspirants, deodorants, and household cleaners.

Colgate is a member of the Consumer Goods Forum (CGF) - Forest Positive Coalition of Action.  We are  aligned with the CGF’s Theory of Change and Coalition of Action priorities to accelerate transformation of the Palm Oil Industry and elimination of deforestation.  With the CGF, we recognize the need for a new approach to meet the goal established in 2010 to end deforestation linked to Palm Oil production by 2020.  While focusing on supply chain certification and traceability has had a positive impact resulting in decreased rates of deforestation in countries such as Indonesia, there is much work to be done to address the significant market for Palm Oil from deforested areas outside of traditional supply chains.  Only through sector-wide collective engagement and effective landscape monitoring with CGF members, suppliers, governments, smallholder farmers and all other stakeholders can there be success.

Our Commitment

Colgate-Palmolive is committed to sourcing responsible palm oil, palm kernel oil (PKO) and palm oil derivatives that do not contribute to deforestation or conversion of native landscapes and respects the rights of workers and communities.

By 2030 Colgate-Palmolive will only source palm oil, PKO and their derivatives that are responsibly and sustainably produced from sources that can be traced back to the  plantation.

Scope

This policy applies to the sources of all Colgate-Palmolive's operations, subsidiaries and joint ventures.

Our suppliers will be 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 palm oil, PKO and derivative suppliers implement a NDPE policy aligned with Colgate’s policy and broader industry norms such as the Roundtable on Sustainable Palm Oil (RSPO) principles and criteria which extends across all operations at a corporate group level

As we strive for zero deforestation, we will partner with stakeholders and our suppliers to build a transparent global supply chain that meets the following criteria:

  • No deforestation and no conversion of native vegetation

  • No exploitation of people or local communities

  • Legal Compliance

  • Reduction of Greenhouse Gas Emissions

  • Adoption of good agricultural practices

No deforestation and no conversion of native vegetation

We commit to eliminating the conversion of native vegetation. Conversion is the removal of natural forest by human activity, without subsequent regeneration. Conversion may occur due to changing land use (e.g. agriculture, urban development, etc.) or where forest has been cleared by forest management practices and not regenerated. This commitment prohibits both deforestation of forested biomes, and conversion of native vegetation in grassland or savannah biomes.  We require all palm oil suppliers to source oil from origins that do not come from areas cleared after December 31, 2015.  Wherever possible, production should occur on already converted or degraded land.  Our no deforestation and no conversion commitment includes the following areas:

Protection of High Carbon Stock Forests

High Carbon Stock forests encompass primary forests as well as High, Medium, Low Density and Regenerating forests. Young Scrub, Cleared/Open Land areas, existing plantations or other land already in agricultural production may be developed. We recognize and support the HCS Approach developed by the HCS Steering Group.

Protection of High Conservation Value Areas

High Conservation Value areas are lands that have particularly high environmental and social significance, with attributes such as significant concentration of biodiversity, rare, threatened or endangered ecosystems and areas critical to the cultural identity and needs of a local community. These areas should not be cleared nor, for forest-based products, should they be harvested in a manner that threatens the HCVs.

We will use High Conservation Value (HCV) concepts to guide implementation of this commitment. We expect suppliers 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.  Colgate encourages landscape approaches and multi-stakeholder land use planning to identify areas of significant social and environmental value.

No Use of Fire for Land Clearance

Colgate-Palmolive will only source from suppliers who prohibit the use of fire as part of land preparation, replanting or other developments.

No New Development on Peatlands, Regardless of Depth

Colgate-Palmolive will not accept new development of any peatland, regardless of its depth. In instances of existing plantations on peat, best management practices should be followed and, where possible, peat restoration should be attempted.

No Exploitation of People or Local Communities

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 for operations affecting their land or resources.

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 against human rights defenders or local communities will not be tolerated.

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.

Reduction of Greenhouse Gases

Suppliers are expected to work continuously to reduce greenhouse gas emissions and pollutant emissions from existing mills and agricultural activities.

Adoption of good agricultural practices

Colgate encourages implementation of regenerative agriculture practices at the farm and plantation 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 growers, gather information about current practices, and share guidance on best practices appropriate to the local context.

SMALLHOLDERS

Colgate-Palmolive commits to work with our suppliers to ensure that this policy is implemented in such a way that supports the inclusion of smallholders in our supply chains.

IMPLEMENTATION PLAN

Our plans and progress against our goals can be found and tracked in our Implementation Plan, which can be accessed via the following link: Colgate-Palmolive Implementation Plan.

PROGRESS & VERIFIED COMPLIANCE

We will take a step-wise approach to verification. As an interim measure, Colgate-Palmolive will strive to procure only palm oil, PKO and palm oil derivatives certified by the Roundtable on Sustainable Palm Oil (RSPO) or equivalent standard. We will give preference to physically certified oils.

We recognize that our policy sets requirements beyond the RSPO Principles and Criteria and will use various independent verification systems to determine if suppliers are progressing towards full conformance with our policy.

We will give preference to suppliers whose palm oil, PKO and palm oil derivatives have been verified by an independent third party against a standard that meets the expectation in our policy, such as the RSPO Principles and Criteria.

WORKING WITH OUR SUPPLIERS

In 2020, we sourced 107,552 metric tonnes of palm oil and PKO, and 97,064 metric tonnes of palm oil and PKO derivatives.  Suppliers of palm oil, PKO and palm oil derivatives are expected to meet the requirements of this policy and must have an equivalent NDPE policy of their own implemented across their organization at a corporate group level including their operations and third party supply chain.  

Suppliers are evaluated against our policy expectations. If a supplier is not able to meet the expectations outlined in our policy, we will work with them to develop an action plan with time-bound commitments.

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. 

Colgate implements structured engagement with direct suppliers through Earthworm Foundation’s Engagement for Policy Implementation (EPI) tool. EPI is a supplier engagement tool which promotes a better understanding of direct suppliers’ challenges, progress, and opportunities for improvement in implementation of NDPE  policies for palm. Through EPI, Colgate gathers information about supplier implementation activities and compliance with Colgate’s policy, and measures supplier progress over time. Our EPI program is focused on the development of suppliers’ own NDPE policies and commitments, transparency and traceability status, grievance process, social and environmental transformation, and verification activities. The approach measures the supplier’s performance on achieving goals related to NDPE, and identifies gaps. We then work with suppliers to close the gaps identified through time-bound action plans.

Colgate expects our suppliers to be engaged in transformation and landscape projects within their sourcing regions.

TRACEABILITY

Colgate-Palmolive is committed to 100 percent traceability for all palm oil, PKO and derivatives. We engage with all of our direct suppliers of palm oil and PKO and an increasing number of our derivative suppliers to understand the source of their supply, down to the mill and plantation level. By tracing palm oil back to known mills and plantations, we can better understand social and environmental practices upstream in each mill’s supply shed, and collaborate with our suppliers to drive transformation in the supply chain. 

Achieving traceability with palm oil derivatives is more complex, and we engage with our suppliers regarding supply chain traceability in partnership with Earthworm Foundation through the following supply chain points:

  • First importer: the company (usually a refiner/trader) that has imported palm oil/palm products from a producing country to the country of ingredient manufacturing

  • First refiner: refiner in the country of production that sources crude palm oil or palm kernel oil directly from mills or from aggregators like crushers, traders or dealers

  • Mill: the first major aggregation point for fresh fruit bunches after having been harvested

  • Plantation: farms, estates, smallholder operations, etc. where the oil palm is planted and fresh fruit bunches are harvested

Many Colgate suppliers act as first importers themselves, and our current focus remains on engagement with origin refiners within Colgate’s supply. The origin refiners will have visibility into the mills in Colgate’s supply base, and represent a crucial leverage point to engage with the suppliers on transformation.

TRANSPARENCY

Transparency in the sourcing of palm oil is key to understanding and addressing risks.   Colgate-Palmolive, in collaboration with our palm oil suppliers, is committed to achieve 100% transparency of our palm supply chain. To support such transparency, Colgate publishes semi-annually our list of direct suppliers for palm oil and PKO along with mill traceability information. 

We recognize that transparency is critical to support on the ground supplier transformation work, assess risk and evaluate supplier’s performance achieving compliance with Colgate’s policy requirements. We expect all upstream suppliers to publish concession maps where legally permissible and will continue encouraging suppliers to publicly disclose their refiner, mill and plantation sources.

As for our own progress towards our goals, we publish update reports twice a year on our implementation status.  We also report on progress in our annual Sustainability Report,  published on the Colgate-Palmolive Sustainability website. In addition, Colgate-Palmolive discloses progress on responsible and sustainable sourcing of palm oil via our annual RSPO Annual Communication of Progress, the World Wildlife Fund Palm Oil Buyers Scorecard, our CDP Forest disclosure and most recently through collective reporting via the CGF - Forest Positive Coalition, which will begin in September 2021.

TRANSFORMATION THROUGH COLLECTIVE ACTION

Colgate-Palmolive recognizes that we alone cannot transform the palm oil supply chain and that only through  partnering with others can we accelerate the pace of change.

Colgate is a member of the RSPO, a Earthworm Foundation member, and a member of the Consumer Goods Forum (CGF). Colgate is a member of the CGF’s  Forest Positive Coalition of Action and the Human Rights Coalition - Working to end Forced Labor. .  Through these collaborations,we are working  to align and implement best practices, engage stakeholders across palm oil production landscapes and employ our collective ability to drive industry change. 

Colgate, in collaboration with Earthworm Foundation and others, supports numerous on-the-ground transformation projects  in sourcing landscapes. Our participation in transformation projects is based on Colgate’s palm oil supply network, identified hot spots and risks, Colgate priorities, and ongoing industry transformation initiatives.   

We encourage our supply chain partners to  support such landscape initiatives promoting transformation through collective action.

Last Updated: August 2021

Market USA
Palm Oil N/A
Palm Kernel Oil 99%
Market Latin America
Palm Oil 100%
Palm Kernel Oil 10%
Market Thailand
Palm Oil 100%
Palm Kernel Oil 99%
Market Europe, Middle East, and Africa
Palm Oil 100%
Palm Kernel Oil 73%
Weighted Total
Palm Oil 100%
Palm Kernel Oil 90%
Palm Oil & PKO Sourcing Region % Annual Volume
Malaysia 28%
Indonesia 35%
Latin America 21%
Thailand 16%

 

Colgate Derivatives Volume
(focus on 80% of
palm oil derivatives
total volume)

First Importer 49%
First Refiner 69%
Mill 60%
  Certified Oils (% by weight)
Palm Oil & Palm Kernel Oil % 100%
Palm Oil % Derivatives 5%
  Book and Claim Certificate (% by weight)
Palm Oil & Palm Kernel Oil % 0%
Palm Oil % Derivatives 28%
Total Coverage
Palm Oil & Palm Kernel Oil % 100%
Palm Oil % Derivatives 33%
Total 62%