Stakeholder Trends and Insights

Colgate-Palmolive:
How a Player with a Global Footprint Is Attempting to Tread Lightly

It’s tough being one of the largest consumer-facing companies as the troika of transparency, sustainability and ethical behavior increasingly challenges a brand’s reputation and social media assures there is no place to hide.

By Sheila Shayon | Published 9 years ago | About a 7 minute read

Colgate-Palmolive’s portfolio of products includes Oral Care, Personal Care, Home Care and Pet Nutrition. With 38,000 employees and 280 properties in more than 70 countries, its daily impact on consumers and the planet is substantial. With sales surpassing $15 billion, familiar household names - Colgate, Palmolive, Mennen, Speed Stick, Softsoap, Irish Spring, Tom's of Maine and Ajax, as well as Hill's Science Diet and Hill's Prescription Diet for pets, fill the shelves of millions of households.

We recently asked Justin Skala**,** president of Colgate North America & Global Sustainability, about the challenges of being one of the big guys.

How does a company of Colgate’s size balance the bottom line with sustainability across a global supply chain?

JS: We sell products to billions of people all over the world – two-thirds of the world’s households buy Colgate oral care products. Of course accompanying this activity comes a responsibility to our employees, our supply chain, our consumers, our retail partners and the communities we serve to operate with the highest ethical standards.

Ultimately, we don’t see it as a trade-off between the bottom line and ethical sustainability – operating this way makes good business sense – we reduce supply chain risks, operational risks, reputational risks, and build brand reputation and value. We’re not perfect, but our value of Continuous Improvement drives progress in this area each year.

With your greatest growth in Asia and Africa, are there different models for building an ecosystem for sustainable development in countries that are in development themselves?

JS: We do have certain considerations in emerging markets that may differ from more developed markets. There is a growth opportunity there, but also a responsibility and opportunity to have a tremendous impact in the communities where we do business. According to estimates from the World Health Organization, 60 to 90 percent of school-aged children, and nearly all adults, suffer from caries (cavities) at some point in their lives. We know these percentages are higher in Asia and Africa. Programs like our “Bright Smiles, Bright Futures” oral health education program and handwashing education programs are a win-win – improving the well-being of the communities we serve by establishing oral health and handwashing habits while building product usage and brand reputation.

We also look to physically reach consumers who may never before have had access to toothpaste and toothbrushes. For example, we have vans in India that bring Colgate products to small stores in remote areas of the country. In Cameroon, we use branded motorcycles to extend distribution into smaller towns.

Affordability is also a big component to sustainable growth in these markets. We balance our portfolio of products to reach consumers at all price points. One of our new 2020 goals is to expand access to affordable health and wellness products for millions of people in underserved communities.

Colgate has been criticized by animal activists, but more recently was noted as a leader in non-animal testing on PETA’s “Working for Regulatory Change” list, and an advocate for India’s ban on testing cosmetics on animals. What would Colgate-Palmolive have to do to achieve zero animal testing on all personal health care products across your portfolio?

JS: Colgate is committed to working toward the elimination of laboratory safety testing using animals. We’ve made great progress. However, in some cases around the world animal testing remains a regulatory requirement, chiefly for more complex toxicity evaluations. We’re working with various partners to find alternatives to animal testing, and we also actively share our work so that the entire field can move in this direction. In the past 10 years alone, we've committed more than $15 million toward identifying validated alternatives to these required animal tests. The hope is for a future with zero animal testing, and we’ll keep working in this direction.

Water (and residual issues of rights and sourcing, etc) is the oil challenge of the near future – if not today. In addition to campaigns such as Making Every Drop of Water Count, are you working on ‘water engineering’ to address the problem before water is tapped for the tap?

JS: Our water footprint goes beyond our own manufacturing process to the water used in our supply chain and the water used by consumers when they use our products. We’re working to reduce the water we use to produce our products – so far, we’ve reduced the water we use per ton of production by a third compared to our baseline. We also recognize that water is a very regional issue, and our operational standards are more stringent in areas with high water stress. We’ve also committed to replenish the water we withdraw in highly stressed regions by 2020, and will be working with the MIT Sloan School of Management to develop our approach.

On the product side, we’re developing options that allow consumers to use less water, like our No Rinse Fabric Softener. Our Product Sustainability Scorecard also measures improvement in our new products, including the water required for manufacturing. Beyond our own operations, our supply chain is a new frontier. Last year we started engaging suppliers to assess water risk and reduction activities.

Finally, our messaging to consumers can have a big impact since consumer use is a large part of our water footprint. On that front, we’re working with The Nature Conservancy on a new initiative to raise awareness of water issues in the U.S. and to encourage consumers to conserve this vital resource.

Do you see a sea change in the personal-care industry as a tsunami of consumer demand for ethical sourcing and systemic brand transparency grows?

JS: We do see the tide starting to change, as consumers are increasingly aware of what goes into products and the making of them. There is an increasing expectation of transparency and improvement. Industry has taken note. Companies are looking more deeply into their supply chains to monitor and improve sourcing practices, for example. Companies like ours are committing to no deforestation in their supply chains and setting targets to assess ethics and safety. A sea change may be slow, but those in the industry who can respond to these new expectations will come out ahead.

Your mission statement is inclusive: “committed to doing business with integrity and respect for all people and for the world around us.” Good PR? Or a requisite part of ROI for any business today?

JS: This is certainly a prerequisite part of ROI for any business today. At Colgate, sustainability has brought us significant cost savings, especially our reduction in energy and carbon over the years. It is also an innovation driver – we’re building sustainability questions into our R&D and product development processes – asking our scientists and our marketers to consider sustainability at the very early stages. With the environmental and social issues of today’s world, with increased consumer and community expectations, a company really cannot prosper long term without a sustainable mindset.

Are you hopeful about the future in terms of selling sustainability to investors and consumers?

JS: In many ways, we are not selling – they are asking. It will be some time perhaps before the mainstream investor and consumer has sustainability as a fixed point on their radar, but we do see the interest increasing. Our Tom’s of Maine line of natural products has been growing at a fast pace year on year, for example. I am hopeful and confident that as interest grows, companies like ours will be well-positioned to meet consumer and investor expectations to deliver great products produced sustainably.