Challenge with CSR

Challenge with CSR

Dow Jones Sustainability indices rank Colgate- Palmolive Co under the Household & Personal Products category as the Best Company. DJSI considers the results generated in RobecoSaM’s Corporate Sustainability Assessment (CSA).  CSA invites over 35, 000 companies that are publicly traded annually to participate. The best-in-class approach is utilized in DJSI when selecting the best Company.  DJSI reviews the sustainability metrics to identify the industries that outperform their peers. The criteria allow all the publicly traded companies to participate in the assessment, thus an additional aspect for investors to consider while choosing Colgate. DJSI considers environmental, social, and governance (ESG), which is an aspect to enlighten investors when making financial decisions. DJSI allocates results to each Company participating in the assessment in the form of a sustainability score. Companies ranked top 10% of their respective production industries are published in the DJSI World. The diligence report utilizes the Dow Jones Sustainability indexes and the Global 100 reports to assist in deciding on investing in Colgate-Palmolive.

Colgate-Palmolive is an American multinational company that produces consumer products headquartered in Midtown Manhattan. The specializations of the Company are production and distribution of personal and healthcare products as in veterinary. Colgate markets a range of products, as indicated in the CSR performance report. Some of the three areas that the leadership in Colgate-Palmolive addresses are health promotion, water-saving, and reduction of plastic waste. In 2018, Colgate-Palmolive reduced plastic packaging by 25% and adopted the use of recyclable packaging by 100% (Mehta, 2017). The CSR report indicates the economic and organizational strategies of Colgate-Palmolive to future profitability. Dow Jones

Sustainability World Index gives a statistical analysis of the top 10% of the most extensive 2500 stocks. The indexes are based on the sustainability and environmental activities of the organizations, as indicated by the production units. Dow Jones Sustainability indices record three years of naming Colgate-Palmolive, which is an achievement that investors consider before working with the Company. In 2017, Colgate was recognized under DJSI as an industry leader of four out of the nine categories that aid in the assessment of the World’s largest companies (Hayward, 2018). DJSI considers the environmental, economic, and social productivity of a company that is key for investors to understand before collaborating with Colgate-Palmolive.  The global ranking indicates the potential of Colgate-Palmolive to increase the profits in the future, which an investor must consider.

The economic profile of Colgate, according to Dow Jones Sustainability North America, indicates that the Company is the leading in the Household Industry products. The Vice President of the Global Sustainability Colgate stated that the Company focuses on providing the best solution. The solutions to environmental, social, and leadership issues are diligent addressed to accomplish the organizational goals. The three areas of focus that DJSI considered mostly in the three consecutive recognition of Colgate are health, water stewardship, and environment. General disclosures in Colgate CSR indicate that the commitment to stakeholders who comprise of investors is critical to ensure the wellbeing of the community.  The organizational profile of Colgate shows that all the financial records are analyzed regularly to balance the social values and economic performance.

The first sustainability of Colgate that investors can consider in making a decision is the promotion of oral health. The DJSI records show that Colgate provides an opportunity for its employees and local communities to lead healthy lives. Hygiene lists as an essential aspect of the survival of humanity, which Colgate provides through its products and education. “Colgate’s Bright Smiles, Bright Futures” demonstrates the commitment of the Company to reach to different communities and improve children’s oral health. Colgate gives free education to communities regarding dental health and how the products can improve general health. The focus on Colgate to reach to the World is evident in the CSR report that shows regular free education performances. For instance, in over 80 countries, free dental screenings take place as a Colgate initiative. Statistical records from Colgate and DJSI indicate that more than 1 Billion children from different parts of the world outside North America benefit from “Colgate’s Bright Smiles, Bright Futures” initiative.  The critical aspect of promoting oral is a factor that investors can consider when making financial decisions.

Colgate commits to Water Stewardship, which is ranked by DJSI under social and environmental contributions. Colgate focuses on the global conservation of water to promote the ecological state of the World. Some of the indirect economic impacts that Colgate considers is educating people on the importance of conserving water. Colgate holds the “Save Water and #EveryDropCounts” campaigns in 70 countries outside America to educate people on the importance of water. The U.S. Environmental Protection Agency states that individuals can save approximately 64 glasses of water during brushing through the educative aspects offered by Colgate. Colgate encourages people to turn off water taps during the brushing of teeth for two minutes (Aguiar,& Reddy,2017). The Colgate campaign awareness to save water has helped to save 99 billion gallons of water according to 2016 data records. Colgate partners with local organizations to create awareness and educate people on the value of each water drop.  Additionally, Colgate promotes access to clean water, which is an essential element in the health of an individual. Some of the aspects that DJSI considers in the ranks are the environmental efforts reflected in the protection of aquatic systems and the promotion of existing water conservation systems.

Colgate contributes to global environmental and economic status through the mitigation of climate change. Globally, climate change lists as the issues that affect the economic growth of most organizations. Colgate focuses on providing sustainable solutions that investors should consider when making financial decisions. In 2019, Colgate pledge support in the initiative to fight against Climate change. The results provided by the Dow Jones Sustainability indexes and the Global 100 reports show that 30% of Colgate’s manufacturing facilities in different parts of the World are at the TRUE Zero Waste program. The investor’s perspective Company currently commits to generating plastic packaging from 25% recycled content (Bar-Lev, Geri, & Raban, 2016). The 2025 vision of Colgate as a company, through its leadership, focuses on having 100% recyclable packaging. Plastics are among the main contaminates, and Colgate believes through recycling the problem can be solved. The environmental approach is expected to financially advantage Colgate-Palmolive, thus a factor for the investors to consider when making decisions.

The recognition by DJSI occurred after Colgate received titles from other influential publications and organizations. In 2019, Colgate listed in Barron records among the 100 most sustainable companies in the United States due to its demonstration to have a profitable future. Colgate received the title “ENERGY STAR” partner of the year and a spot on the EPA’s Green Power Partnership among the top 100 companies.  The 2018 CSR named “Building a Future to Smile About” indicates that most of Colgate’s sustainability goals are achievable. The financial achievements of Colgate encourage investors to consider the Company when making investment plans (Lee, 2020). Colgate collaborates with other Non-governmental organizations to ensure that sustainability is achieved by reducing the environmental footprint. The future is bright with Colgate as the leader’s state and focuses on educating the World on the importance of sustainable goals.

Colgate-Palmolive promotes a sustainable culture through diversity and inclusion as part of the business. Global organizations have recognized Colgate as a business that values diverse cultures that aid in the economic growth of the industry. In the 2018 Corporate Equality Index, the Human Rights Campaign recognized Colgate and gave it a perfect score. The LGBT Business Equality Excellence Award in 2017 was directed to Colgate after taking initiatives to recognize all people. Colgate, as a company, promotes equality and a sense of existence to humanity by providing products that do not discriminate. Colgate lists as one of the Fortune’s Most Admired Company as awarded in 2017 and 2019. Colgate proves employment to most people in the world, especially Africa. Colgate is one of the top 50 employers in Africa, as indicated in the Black EOE journals. Diversity as an aspect in business leads to the social, economic, and financial growth of a company, which is a factor of consideration among investors. The Thomas Reuters Diversity and Inclusion Index lists Colgate as one of the seven topmost diverse and inclusive companies. Colgate, as a Multicultural company in 2017, received the recognition among the 100 best companies for multicultural women (Liebscher, 2017).  The Corporate Social Responsibility and Sustainability report indicates that the indexes are given to Colgate based on the continuous support for core values and strategies.

Colgate-Palmolive, as a leading global consumer for household products, focuses on promoting personal and healthcare. The CSR report indicates the Company’s core values and efforts to sustainability. The financial statements show an increase in the profitability level of Colgate over the years, as evidenced by several developments. DJSI records three years of naming Colgate-Palmolive, which is an achievement that investors consider before working with the Company.  Colgate has received awards and recognitions from different global organizations to increase its potential to make profits. Colgate focuses on the worldwide conservation of water to promote the environmental state of the World. In conclusion, the metric index from DJSI and other global organizations show that Colgate-Palmolive has a positive business impact that investors can consider.

References

Aguiar, E., & Reddy, Y. V. (2017). Corporate diversification on firm’s financial performance: An empirical analysis of select FMCG companies in India.

Bar-Lev, R., Geri, N., & Raban, D. R. (2016). Developing a Financial Statement-Based Effectiveness Measure of Interorganizational Systems’ Contribution. Journal of Computer Information Systems, 56(1), 62-69.

Hayward, L. (2018). Does the Stock Market Value Inclusion on a Sustainability Index? An Event Study Using the Dow Jones Sustainability North America Index.

Lee, S. (2020). Corporate Social Responsibility and Corporate Financial Performance: An Examination into Fortune 500 and DJSI Firms within Consumer-Facing Industries.

Liebscher, R. (2017). Socially Responsible Equity Funds and the Dow Jones Sustainability Index. Available at SSRN 3426788.

Mehta, N. (2017). Colgate-Palmolive’s Attempt of Patenting Toothpaste Formula. In Patent Law and Intellectual Property in the Medical Field (pp. 148-169). IGI Global.