The case for CSR/ Sustainability Reporting Done Responsibly


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Insights on how you can protect the environment, maintain and increase the value of your company, through a structured process.

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Case study: How Colgate is increasing its energy efficiency

Operating in today’s world requires an enhanced focus on conserving Earth’s finite resources, addressing climate change and maintaining the well-being of the planet for generations to come. Colgate’s planet-related commitments cover the environmental issues material to the company and its stakeholders and, most importantly, its energy use.

This case study is based on the 2015 Sustainability Report by Colgate published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate that CSR/ sustainability reporting done responsibly is achieved by identifying a company’s most important impacts on the environment and stakeholders and by measuring, managing and changing.

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Consumers, nongovernmental organizations and other external organizations expect companies to do their part in the fight against climate change, reducing energy consumption. What is more, reducing Colgate’s energy use and greenhouse gas emissions also enabled the company to avoid costs: since 2002, Colgate’s energy-reduction projects helped Colgate avoid nearly $500 million in energy costs.  Tweet This! After measuring and setting targets, Colgate took action to implement a global Energy Management Program, help Colgate’s global sites prioritize on the most effective energy reduction activities through the Top 10 Energy Actions program, engage people across Colgate’s operations through the Energy Treasure Hunt program, invest in energy reduction projects through the 5% for the Planet program and, also, reduce energy consumption in Colgate’s plants across the globe through energy efficiency initiatives.

What are the material issues the company has identified?

In its 2015 Sustainability Report Colgate identified a range of material issues, such as oral health, responsible sourcing and human rights, ingredient safety, sustainable packaging, deforestation and water stewardship. Among these, recognizing that businesses have a vital role to play in addressing the global issue of climate change by reducing energy use and greenhouse gas emissions, acting to improve its energy efficiency stands out as a key material issue for Colgate.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Colgate engages with:

Stakeholder Group
Employees
Consumers
Retail customers and partners
Suppliers
Shareholders and investor groups
Government and regulatory bodies
Non-governmental associations
Industry trade associations
Local communities and community groups

How stakeholder engagement was made to identify material issues

A wide variety of stakeholders help to inform Colgate’s approach to sustainability. Colgate engages with stakeholders on an ongoing basis to communicate its sustainability progress and listen to feedback. In fact, Colgate’s sustainability commitments and goals were developed with the input of these stakeholders. Colgate’s main stakeholder groups include Colgate employees, consumers, retail customers and partners, suppliers, shareholders and investor groups, government and regulatory bodies, non-governmental associations, industry trade associations and local communities and community groups.

To determine the sustainability issues of interest to its stakeholders, Colgate evaluated information from sources such as:

  • Industry trade groups such as the American Cleaning Institute (ACI), the Grocery Manufacturers Association (GMA) and the Consumer Goods Forum (CGF), including the industry-wide materiality assessment performed by the ACI
  • Retail partner surveys and inquiries
  • Consumer inquiries
  • NGO feedback
  • Sustainability investor group inquiries and feedback
  • Current and future regulatory requirements
  • Leading sustainability surveys and rating agencies
  • Media inquiries and interest
  • Sustainability Accounting Standards Board
  • Global Reporting Initiative
  • Industry benchmarking
  • Internal subject matter expert and Sustainability Steering Committee feedback

Colgate then categorized and prioritized the issues with the most potential to impact its operations or supply chain or to create regulatory or reputational risk. In addition to risk, Colgate considered whether an issue has potential to create shared value for both the company and society. From this process, seven key sustainability issues were identified.

What actions were taken by Colgate to increase its energy efficiency?

In its 2015 Sustainability Report Colgate set the following targets for increasing its energy efficiency, based on the company’s approach to materiality – on taking action on what matters, where it matters:

  • Implementing a global Energy Management System

Colgate has a long-standing energy reduction program that has brought reductions in greenhouse gas emissions and energy use intensity as well as financial savings. Colgate’s Energy Management System is modeled after U.S. EPA’s ENERGY STAR program and is implemented globally. In 2016, Colgate was named a U.S. EPA ENERGY STAR Partner of the Year for the sixth year in a row, with recognition for Sustained Excellence. Additionally, 72 percent of Colgate’s manufacturing facilities have achieved U.S. EPA ENERGY STAR Challenge for Industry recognition, including 88 percent of Oral Care plants, 82 percent of Personal Care plants and 71 percent of Home Care plants.

  • Helping Colgate’s global sites prioritize on the most effective energy reduction activities

As a way to help Colgate’s global sites prioritize on the most effective energy reduction activities, Colgate created the Top 10 Energy Actions program. Implemented over two-year increments, this program tracks progress against Colgate’s ten best energy reduction opportunities.

  • Engaging people across Colgate’s operations through the Energy Treasure Hunt program

Colgate engages people across Colgate’s operations through participation in the Energy Treasure Hunt program. Over a three-day period, 30 to 50 participants visit all areas of a facility, searching for energy waste and brainstorming opportunities for continuous improvement. Since the program’s launch, over 500 Colgate “treasure hunters” worldwide have identified more than 1,400 energy-saving ideas with the potential to deliver $17 million in energy savings.

  • Investing in energy reduction projects through the 5% for the Planet program

Colgate’s 5% for the Planet program sets a global goal to spend 5 percent of Colgate’s manufacturing capital expenditure budget on energy reduction, water conservation and reduction of waste to landfill. Upgrades for environmental compliance and product design are funded separately. Over the last five years, environmental projects have competed successfully for funding with Colgate’s mainstream portfolio, reducing its footprint and delivering savings. Since 2011, Colgate has invested nearly $139 million in over 865 planet-related projects, which have delivered an estimated savings of over $34 million. In 2015, Colgate exceeded its 5 percent target, investing nearly 7.5 percent of the budget in over 180 Planet-related projects. A minimum of 2 percent of the manufacturing capital budget is targeted specifically toward energy reduction projects. In 2015, Colgate exceeded this target with over 4.6 percent of the budget invested in projects yielding an estimated $2.8 million in annual savings.

  • Reducing energy consumption in Colgate’s plants across the globe through energy efficiency initiatives

Bowling Green, Kentucky, U.S.: By replacing high-pressure sodium lights with LED lights in the Bowling Green, Kentucky plant’s warehouse, Colgate saved an estimated 556 MWh of electricity, reduced CO2 emissions by 340 metric tonnes and saved $33,000 annually.

Compiegne, France: The process for blowing plastic bottles for home care products consumes a large amount of compressed air. Instead of using the same air pressure for each type and size of bottle, Colgate’s Compiegne, France plant installed a control system to work with its current software to vary the air pressure according to the type and size of bottle being blown. This additional system is estimated to save 666 MWh in electricity, 55 metric tonnes of CO2 and save over $61,000 annually.

Anzio, Italy: An energy improvement idea identified during the Anzio, Italy plant’s Energy Treasure Hunt in 2013 was to replace lower efficiency motors with high efficiency motors with inverters. In 2015, the plant replaced 36 such motors which are estimated to reduce electricity demand by 600 MWh, reduce CO2 by 243 metric tonnes and save $160,000 annually.

Bangpakong, Thailand: The Bangpakong, Thailand plant improved the efficiency of the water chiller system located in its soap production building by replacing the existing air-cooled type chiller with a new higher efficiency water-cooled typed chiller. This new system is estimated to decrease the energy usage of the soap plant chiller system by 40 percent and save the plant 1,085 MWh in electricity, 574 metric tonnes of CO2 and save $106,000 annually.

Which GRI indicators/Standards have been addressed?

The GRI indicators/Standards addressed in this case are:

1) G4-EN3: Energy consumption within the organization – the updated GRI Standard is: Disclosure 302-1 Energy consumption within the organization

2) G4-EN5: Energy intensity – the updated GRI Standard is: Disclosure 302-3 Energy intensity

3) G4-EN6: Reduction of energy consumption – the updated GRI Standard is: Disclosure 302-4 Reduction of energy consumption

4) G4-EN15: Direct greenhouse gas (GHG) emissions (Scope 1) – the updated GRI Standard is: Disclosure 305-1 Direct (Scope 1) GHG emissions

5) G4-EN16: Energy indirect greenhouse gas (GHG) emissions (Scope 2) – the updated GRI Standard is: Disclosure 305-2 Energy indirect (Scope 2) GHG emissions

6) G4-EN17: Other indirect greenhouse gas (GHG) emissions (Scope 3) – the updated GRI Standard is: Disclosure 305-3 Other indirect (Scope 3) GHG emissions

7) G4-EN18: Greenhouse gas (GHG) emissions intensity – the updated GRI Standard is: Disclosure 305-4 GHG emissions intensity

8) G4-EN19: Reduction of greenhouse gas (GHG) emissions – the updated GRI Standard is: Disclosure 305-5 Reduction of GHG emissions

 

References:

1) This case study was compiled using published information by Colgate which is located at the link below. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

http://www.colgate.com/app/Colgate/US/Corp/LivingOurValues/Sustainability/HomePage.cvsp (June 2016)

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

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