Our Policy on Responsible and Sustainable Sourcing of Palm Oils

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 and pulp and paper. This is a commodity-specific policy that addresses palm.

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.

By 2020 Colgate-Palmolive will source palm oil, PKO and their derivatives that are responsibly and sustainably produced and from sources that can be traced from plantation to product.

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 across all operations including landholdings, joint ventures and third-party suppliers.

Requirements

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

  1. No deforestation of High Carbon Stock (HCS) forest
  2. No deforestation of High Conservation Value (HCV) areas
  3. No use of fire for land clearance
  4. No new development on peat lands, regardless of depth
  5. Reduction of Greenhouse Gas Emissions
  6. No exploitation of people or local communities


1. No Deforestation of High Carbon Stock Forests or High Conservation Value Areas

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 agricoltural production may be developed. We recognize and support the HCS Approach developed by the HCS Steering Group.

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.

2. No Use of Fire for Land Clearance

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

3. 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.

4. Reduction of Greenhouse Gas Emissions

Suppliers will be expected to work continuously to reduce greenhouse gas emissions and pollutant emissions from existing mills and agricoltural activities.

5. No Exploitation of People or Local Communities

Human and Labor Rights

Guided by the UN Declaration on Human Rights, under a policy of no exploitation, Colgate-Palmolive requires its suppliers at all tiers to commit to: no child or forced/bonded labor; no unethical recruitment practices; and no discrimination or harassment in its supply chain. Suppliers will 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 detail 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.

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.

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.

Next Steps

As the next step on our journey toward responsible and sustainable sourcing of palm oils, we will strive to meet the following goals:

  1. Work with suppliers and external expert organizations to identify potential social or environmental risk in our supply chain and to address those risks through transformation actions
  2. Achieve full traceability of our palm oil, palm kernel oil and palm oil derivatives supply chains back to the first refineries, mills and to the plantation by year-end 2020
  3. Purchase increasing volumes of physical certified sustainable palm oil and palm kernel oil each year with a goal to source 100% by year-end 2017
  4. Purchase increasing volumes of physical certified sustainable palm oil derivatives
  5. Communicate the expectation that suppliers publish concession maps
  6. Measure suppliers’ conformance

We will review and update our milestones and transformation plans, as well as report on our progress twice per year.

Verification

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 above 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.

Working with Our Suppliers

Suppliers of palm oil, PKO and palm oil derivatives are expected to meet the requirements of this policy. Suppliers are evaluated against our policy expectations. If a supplier is not able to meet 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. For example, Colgate-Palmolive may terminate our business relationship with suppliers who choose not to create action plans or fail to meet time-bound commitments and/or suppliers who are suspended from RSPO or equivalent organizations.

Transparency

We recognize that transparency supports transformation. We will expect RSPO suppliers to publish concession maps where legally permissible and will encourage suppliers to publicly disclose their refiner and mill sources.

We will report on progress toward our goals twice a year – in our annual Sustainability Report, as well as a semi-annual report, both to be published on the Colgate-Palmolive Sustainability website. In addition, Colgate-Palmolive discloses progress on responsible and sustainable sourcing of palm oil via RSPO Annual Communication of Progress, the World Wildlife Fund Palm Oil Buyers Scorecard and the CDP Forest disclosure.

Collective Action

Colgate-Palmolive recognizes that we alone cannot transform the palm oil supply chain. We are partnering with others to accelerate the pace of change.

Colgate-Palmolive has signed on to remove commodity-driven deforestation from our supply chain through the We Mean Business Take Action Platform. We have also publicly supported the Indonesian government’s policy to protect intact and restore degraded peatlands.

We will continue to support similar reforms and improvements in government and land use management to achieve lasting solutions to deforestation.

We are working in partnership with The Forest Trust (TFT) in order to map our supply chain, assess risk, prioritize regions and suppliers for targeted engagement and contribute to transformation on the ground.

We are a member of the RSPO, a member of the Tropical Forest Alliance and a member of the Consumer Goods Forum Palm Oil Working Group.

Our Progress

Colgate-Palmolive has recognized the need for a strategy to source responsibly produced palm oil since 2007, when we became a member of the RSPO.

  1. Developed a cross-commodity Policy on No Deforestation, highlighting palm oil as one of four commodities to target for implementation (March 2014)
  2. Communicated our policy to our direct suppliers (ongoing)
  3. Began palm oil membership with The Forest Trust to map our supply chain, engage our suppliers and drive transformation in the supply chain (May 2015)
  4. Identified all palm oil derivatives in our supply chain (2015)
  5. Requested information on traceability to the mill level from 100 percent of our direct suppliers of palm oil, palm kernel oil and derivatives (ongoing)
  6. Engaged direct suppliers of palm oil and palm kernel oil to encourage increased transparency and holding suppliers accountable to time-bound action plans to transform their supply chain (ongoing)
  7. Issued a commodity-specific Policy on Responsible and Sustainable Sourcing of Palm Oils (July 2016)
  8. Incorporated sustainability and responsible sourcing requirements in the supplier selection criteria and process
  9. Discontinued relations with certain suppliers who are not making adequate progress toward our policy commitments (ongoing)(1)
  10. Committed to procure 100 percent certified palm oil and palm kernel oil (ongoing)
  11. Included palm oil suppliers in our Supplier Responsible Sourcing Assessment program (ongoing)

(1) Colgate-Palmolive sourced a very small quality of materials from IOI. We will not consider sourcing materials from IOI until they regain RSPO certification and develop an action plan with time-bound commitments that aligns with the requirements of our No Deforestation Policy.

Colgate-Palmolive Statement Regarding Amnesty International Palm Oil Report

Traceability

We have engaged 100 percent of our direct suppliers of palm oil and PKO to understand the source of their supply, down to the mill level. By tracing palm oil back to known mills, we can better understand social and environmental practices at the plantations and smallholder farms the mill sources from, and collaborate with our suppliers to help transform the supply chain.

The percentages in Table 1 below reflect the percentage of palm oil and PKO for each purchasing market that can be traced back to the origin mill. Being able to identify the mill sources for our palm supply allows us to prioritize upstream suppliers for engagement based on associated risk. It also allows us to seek further information and respond if concerns arise against stakeholders within our supply chain.

Table 1 Colgate-Palmolive-Palmolive Global Traceability (as of December 2016)

Market Palm Oil Traceability PKO Traceability
USA N/A 98%
Latin America 99% 90%
Thailand 100% 83%
Europe, Middle East, and Africa 98% 94%
Weighted Total 98% 93%

 

In partnership with The Forest Trust we have started the traceability journey with our palm oil derivatives suppliers. We have determined key supply chain points for achieving traceability goals in these complex supply chains which include:

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

Verification

As indicated above Colgate-Palmolive will strive to procure only palm oil, PKO and palm oil derivatives certified by the RSPO or equivalent standard.

  Green Palm Certificates
(% by weight)
Physically Certified Oils
(% by weight)
Certified Oils
(% by weight)
Palm Oil & Palm Kernel Oil 23% 77% 100%
Palm Oil Derivates 55% -- 55%
Total     81%

Transformation

We continue to have in-depth conversations with our suppliers regarding the robustness of their own responsible sourcing policy and implementation plan, or their plans to achieve compliance with our policy if they are lacking their own. We will continue discussions to encourage greater transparency with the suppliers who have yet to provide complete information on traceability to the mill level. With the traceability information we have and will continue to receive, we will be able to make informed decisions about which producing suppliers to support in transformation. Through our partnership with TFT, we will be able to contribute to supplier assessments and training in order to have a positive, tangible impact on the practices on the ground within our supply chain. This direct transformation work is in addition to monitoring and ensuring progress of our suppliers’ own efforts at transformation.