Ann Tracy became Chief Sustainability Officer in the Global Growth & Strategy Organization in 2022, leading Colgate’s Global Sustainability & Social Impact Strategy and key initiatives, integrating a strong technical foundation across people, performance and planet into commercial strategic purpose.
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John: Welcome to another edition of the Impact podcast. I’m John Shegerian and I’m so lucky to have with us today, Ann Tracy. She’s the Chief Sustainability Officer at Colgate Palmolive. Welcome, Ann, to the Impact podcast.
Ann Tracy: Thank you, John, I’m so pleased to join you today.
John: Hey, I actually am in New York City today. I’m here on a business trip and we’re literally five blocks away. If I knew that we were going to be closer, I would have come over and done this in person. But this is wonderful. We were actually in the same room last night. We didn’t even meet each other. It was a small room. Our paths are destined to cross in person in the very near future. I just feel it.
Ann: That was a packed room, right? It was like you only had a little bit of space to maneuver.
John: It was. But it was a lovely event. Before we get talking about all the important work in sustainability that you and your colleagues are doing at Colgate Palmolive, can you talk a little bit about the Ann Tracy journey? How did you even get here?
Ann: Well, okay, I’ll tell you about my journey. One of the things I find so interesting is that, and I was just staying the past two days externally with a few of my peers in different industry sectors, we all come from different backgrounds. I find it fascinating. Let me tell you my story. I’ve been at Colgate a very long time. This is my 32nd year. I’m an engineer by training. Most of my career at Colgate was in the supply chain. I have had the good fortune of working in different roles across what we call the end-to-end supply chain. Many years, a good decade in manufacturing, working in our plants, working as a shift team leader, all the way working up to running a plant, to running a region. Then also at the other end, the more commercial end in customer service and logistics for some of our divisions. Lots of different roles across the supply chain. I’ve also during that timeframe had the good fortune of working in every one of our core categories at Colgate. Quickly, Colgate is a $18 billion revenue company. We have 34,000 great people around the world, where we sell our products in over 200 countries. We’re really global. We are truly multinational. We have four core categories. We have oral care. Most people know Colgate and if our statistics are right, at least half the people watching your podcast today brushed their teeth with Colgate this morning. Most people know that’s good. But we also have personal care brands and home care brands that are more regional.
If you’re watching in the US, we have things like Softsoap and Irish Spring and, of course, Palmolive dish soap. We also own the fastest growing part of our business is Hills Pet Nutrition. That’s science diet and prescription diet and science plan in Europe. We have those four core categories. I’ve been fortunate enough to work in each of the categories, which is fascinating. Also, pretty much worked with every single geographical division. From Asia, I lived in Bangkok for a couple of years, to Latin America, to Africa, Eurasia with, that time we called it Africa-Middle East, Fascinating part of the world. Europe and, of course, the US. Point being that I’ve had the good fortune of just continuing to learn and grow at Colgate, which is what you want in your career. I’ve had, I think, 17 different jobs over the 32 years. I didn’t have any reason to leave and I love the culture at Colgate, so here I am. Let’s fast forward to end of 2017, beginning of 2018. At the time, I was part of the European division based in Europe. My then boss, who was the chief supply chain officer, asked me to come back to headquarters here in New York, and to lead supply chain strategy and global sustainability. I’ll talk more about our sustainability program in a minute, but it actually really grew up, I would say, in the supply chain. There’s lots of overlaps. It’s at the time was a natural fit. We build our strategies in five-year increments, not unlike many of our peers. 2020 was quickly coming due. When I came into my role, I got busy building both what we call our supply chain reimagined, 2025 strategy. Our new 2025, we call it our sustainability and social impact strategy. Again, some overlaps, but two different frameworks. I then said to myself, there’s a lot of work to get done here around sustainability.
That’s around the time, if you think back five, six years, when, I guess you could say, a lot of focus and energy started to really begin to escalate around climate change around the plastic waste issues out there. Then another year or two later, a huge focus on the unfortunate George Floyd incident on DE&I, particularly in the US. But we’re a global company, so we think that’s really important globally. A lot of escalating issues in this space. I convinced Colgate that I need to focus on sustainability, because there was so much to do. I pivoted and became the first Chief Sustainability Officer for Colgate. I’m the inaugural, if you will, Chief Sustainability Officer. However, and for your viewers, there’s some really good reports out there. There’s a group called the Elon Weinreb group and they publish a report every year on the state of Chief Sustainability Officers. At that time, many companies were adding their first-time few sustainability officers. I wasn’t the only one. It was significant because of what I just said, because of all the escalation of issues going on. There I was. But that role remained in the supply chain. Another interesting fact is these people coming into these new roles, myself included, some come from supply chain, some are engineers, some come from legal, some come from corporate communication. People are coming into the role from different vantage points, which I also find fascinating.
I was in the supply chain up until last year, a little less than a year ago. I’m almost done with this part of the story. Fast forward to this year, a little over a year ago, I moved from the supply chain now. Now I report to the group president of growth and strategy, who has responsibility for not just sustainability, but our commercial strategy, marketing, product development, global packaging, and supply chain and digital, among other strategic global functions for the company. That, I think, was a really important move, because it was a statement by Colgate, where they felt sustainability belonged in terms of the strategy for the company. It was an important move, I think, for the maturity level of our Colgate journey and sustainability. Here we are and I’m now again learning new things because I’m really trying to work much more closely with our insights teams and our commercial teams, so marketing and customer development or sales, on how to really now take this program that we’ve built in our equity name and through our brands. I’m learning all about marketing and I find that fascinating, so here we are.
John: Where’d you grow up by the way?
Ann: I grew up in Bethlehem, Pennsylvania steel town.
John: Like we were saying, it’s fascinating to see where so many first Chief Sustainability Officers came from. But because our generation has become those first generation Chief Sustainability officers, there was nothing like this in our schooling system.
Ann: No, right? Actually, one of the things I did for anybody who’s watching who has aspirations to move in this career path, pretty quickly when I got into the role, I told you I had engineering by training, but I need to wrap my head around this. I need to get some deeper learning here. What I did was I chose an eight-week online course through the University of Cambridge, which is one of the universities, not the only one, but one of the universities that’s quite renowned in sustainability, research, and thinking. There’s other great schools too doing that work. We happen to be very affiliated with the Columbia Sustainability Management Program here, because it’s in New York. Two of the people on my team are adjunct professors there. There’s great schools out there that are helping people become more knowledgeable in the space. I took an eight-week online program to earn a Certificate in Sustainability Management. That helped me. The interesting thing about this space is it’s escalated so quickly.
It’s funny, but once you get on par with most other people, everything has been so new in the last five years that if you’ve been in this field for the past five years, you’ve learned a lot and I feel like it’s moving a mile a minute. But I mean, I think you have to do a lot of reading and a lot of external networking to stay up with all the issues. Can I add one more thing? When we were growing up, because we just published our annual report this week. We published yesterday. You can go to colgatepalmolive.com and see our annual sustainability and social impact report. I always write a letter at the beginning. It follows our CEO letter. I started off saying, to your point, when I was growing up, we had milkman. I don’t know if you remember Keep America Beautiful, with the Indian crying and the really discouraging litter. I’ll date myself, that was 50 years ago. But it was a long time ago. At that time, our generation was used to sustainable behaviors that we took for granted, that I think we have to start going back to.
John: Well, that’s true. But there’s another argument. We’ll get into that in a second. For our listeners who’s just joined us, we’ve got Ann Tracy. She’s the Chief Sustainability Officer at Colgate Palmolive. To find Ann and her colleagues and all the great work they’re doing in sustainability, you go to www.colgatepalmolive. To find also the sustainability report that Ann was just referring to that just got launched yesterday, I’m looking at it right now, the 2022 sustainability report, you could go to colgatepalmolive.comen-us. The report is right there for you. It’s funny you talked about, you mentioned a little bit about I’m 60 years old, so I remember the Indian crying and I remember Keep America Beautiful, of course, which is still around. But something about when we were being raised, and I was raised in a New York, New Jersey metropolitan area.
You are one state away in Pennsylvania. Sustainability really was not part of our world, our culture, our elementary school, grade school, high school, college. You’re running a worldwide organization, you’ve had all sorts of exposure to, like you said, Asia and Europe and everywhere else, which is we’re going to get into the benefits of all of that exposure that you add in 17 jobs in 31 or 32 years. But what’s fascinating and what I’ve seen in my travels in sustainability is that Europe, given the size of the countries there, and South Korea and Japan, given the size of those countries, were two generations ahead of us in terms of shifting from the linear circular economy, shifting to sustainable behavior. Whereas we live in this wonderful and vast country and Lala land. We were of the mindset now in retrospect that, hey, you just use it. You dig another landfill and you throw it out. Culturally, we were way behind those other parts of the world. Do you agree?
Ann: Yeah. I mean, I think we all know our American culture, bigger is better. We’re fast, we fast fashion, move fast. We’re a culture of convenience at the end of the day, right? A lot of what you’re describing plays into the convenience card at the height of it. I mean, that’s America and there’s a lot of good things, there’s amazing things about being in America and that culture. But it also has consequences when it comes to sustainability. One thing about the US, though, which I believe, is once we understand those consequences and we start to put our minds to addressing them, I think we have the ability to exponentially catch up. I’d love to see us catch up and recycling it. One of the big challenges is that recycling is often very much not only a state jurisdiction thing, but even a community or municipality jurisdiction thing. We’re not quite standardized across all of our municipalities in the US. That makes it challenging, of course. But things are changing and the extended producer responsibility, which has been in Europe for a long time, which is, it’s a terrible acronym, APR, but it’s basically fees that big manufacturers like us have to pay based on the amount of plastic that we’re putting out that we produce. That’s coming, there’s four states that have it now and more are looking to adopt that in the next year. We’re trying to stay ahead of that, by the way, to be part of a group that will try to standardize that a little bit more. That’s an opportunity.
John: On the show, I get to, over the last 16 years, I’ve had the opportunity and the honor to interview lots of Chief Impact Officers, Chief Sustainability Officers, and all the different titles in between that folks that do what you do. But what’s always fun is when I get to have someone like you, who is the first Chief Sustainability Officer at a legendary and iconic brand. Given that you had already vast experience inside of the company, with all sorts of cross training and cultural training and things of that such, how daunting was that blank page since you were the first to step in those shoes? It’s very exciting, I can imagine, because it’s a blank page in many ways. But also daunting because, like you said, sustainability can be as wide or as narrow as the leadership that is managing that program. How did you approach the white page and how do you approach it today, in terms of width and breadth of the topics you’re going to want to tackle at Colgate Palmolive?
Ann: I mean, my first response would be very much humbly, I can’t take credit, it wasn’t my blank page to necessarily fill in. This is where we can start to talk about our program and how it grew up. I have an incredibly talented team. It’s a wonderful team because it’s young and old. HR would kill me if I say it like that, but newer and people who’ve been around for a while at Colgate. But we have some very experienced people and some people coming out of that Columbia program who are terrific, amazing talent. They built the program. There was a huge foundation and I feel like I came in at a time. The only thing I’ll take credit for is recognizing the opportunity, I guess, because to help shape it and mold it and just take it to the next level, if you will. Maybe talk a little bit about our program. At Colgate, again, we talked about it growing up in the supply chain. We have been measuring our greenhouse gas emissions, our utilities like electricity, our water usage, our waste to landfill, all of those things since 2002.
For over 20 years, we have been measuring and continually reducing all of those. We have significantly reduced our impact across all of our factories since that time, which is great because that was a huge foundation to build off of. Now we’re in the process of moving all of our electricity to renewable. The more we reduce, the less we have to transfer, right? From an environmental standpoint, huge foundation. Even on the social side, one of the most important programs, it’s what I call a hero initiative, our flagship program for Colgate is known as Bright Smiles, Bright Futures, where we have been bringing for 30 years now, oral health and hygiene to children in underserved communities around the world. We meet them where they’re at. We have dental vans. We go to schools. We educate them. We give them product, not just for them but to bring home to their families, and teaching them about the importance of oral hygiene to their overall well-being. That is an incredible program we’ve reached now, as of this year, 1.6 billion children across the 30 years. We have a goal to get to 2 billion by 2025. With digital technology, it can accelerate how we reach children.
Anyway, we’ve had social programs and environmental programs in place. Now, we are looking more toward the future. Of course, there’s a lot more regulations coming. How do we organize all this? That’s where I stepped in. I feel like I tried to bring it all together. One of the benefits, I guess you could say, of being at a company as long as I have is I know everybody. This role requires a lot of influence and negotiation and driving change in spaces where you don’t necessarily have accountability and responsibility directly. We’ve built this new strategy, which I can talk a little more about. But I joke that I’m the master of none, keeper of all, because it’s pretty broad reaching between social and environmental.
John: In terms of ESG wasn’t even an acronym 10 years ago that anybody was talking about. The shift from the linear to circular economy in the United States was also something that was not a part of our modern-day lexicon. Now it is. Now you came up with the 2025 sustainability and social impact strategy back in 2020. Where are you now in that journey and how are you rethinking what you’re going to come up with for 2030?
Ann: That’s a great question. Let’s start with, what did we do first When we built that strategy back in 2020 and rolled it out, one of the best first steps any company can take, depending on where they are in their journey, especially if you’re at the beginning, is to conduct what we call a materiality assessment. We actually, at the time, we like to call it more our sustainability impact assessment, not to be confused with a financial materiality. Although, the thinking has already evolved there, because back when we did our first materiality assessment, there was some discomfort of confusing it with a pure financing exercise. Actually, fast forward to today, we’re getting ready to do an updated materiality assessment. It’s now recognized that it is tied to the financials of the company, by the way, and understanding the risks and opportunities in a monetized way associated with all these big issues, right? The reason that assessment is important is because basically, it maps in simple terms, if there’s an X and Y axis, it maps what’s most important to our business, to the Colgate business, versus what’s most important to the stakeholders.
Stakeholders being a broad set of people, that stakeholders are of course investors and investors have an increasingly not more than curiosity pressure. Now, I talked to a lot of investors, they want to know what we’re doing. We call them our customers, but those are the retailers like WalMart, Target, Kroger. There are NGOs that are continually questioning what we’re doing, nongovernmental organizations, nonprofits. There are the consumers, people who buy our products and use them. The stakeholders that I personally consider most important are our employees. It’s a broad set of stakeholders. Understanding across that spectrum of stakeholders, what’s important to them, and when I say important, it means across all the key issues related to ESG. It’s everything environmental from, you mentioned circular or plastic, which we can talk more about.
Climate, biodiversity, nature, water, deforestation, the list goes on. Then there’s social issues, there’s DE&I, there’s well-being of our own employees, and what are we doing in communities where we live and work and donations and things like this. There’s a list of social issues. I’m making the number up because I don’t know off the top of my head. Let’s say there’s 30 issues, we map them across that spectrum. The things that are the highest business and stakeholder impact to the company is where we’re really trying to focus. It’s going to be different for Colgate than a General Motors or a PepsiCo. They’re going to be a little bit different, depending on the industry, right?
John: Where do you fall in this race, when I say race, I say it only in a complimentary way, in this corporate race to net zero? How does that also figure into your map and algorithm?
Ann: Well, and that’s an interesting one because that is the one big issue that is pretty common across everybody. Whether it’s Microsoft or United Airlines, I’m just rattling off different companies, you get the idea, different industry sectors. We have set a target to become net zero carbon by 2040. Then what companies are doing now to be recognized, particularly by investors, is the Holy Grail of what you want to do is to go get your targets, your roadmap, if you will, your plan and your interim targets approved by a group called SBTI, Science Based Targets Initiative. Science based targets grew up out of a collaboration of several NGOs. Probably the biggest driver or the thinking behind it came from a group called WRI, which is based in Washington, who did a lot of the deep research for it, along with WWF and some other NGOs. They are in all this, we call it in my world, the alphabet soup of different reporting requirements out there. Out of all that, what I find interesting about climate is SBTI is globally recognized as the standard for climate targets. There’s no doubt about that.
They’ve been growing and they’ve had an influx of companies trying to get their targets approved. It’s not an easy process. We built a plan, we have our interim targets, we did get our targets approved last September, and we were actually the first multinational consumer goods company to be approved. I again applaud my team. It’s all my team who did the hard work to help us get there. They did a terrific job. Now we’re on the journey. Why climate? Climate is important because in the US, the regulations that are coming, SEC has a pending proposal around climate, it’s what investors are asking the most about. I think it’s one of the universal issues, whether no matter where you are in the world or how mature the culture is, whether it’s Asia, Latin America, Europe, as you said, is more ahead of us. But climate is a globally recognized issue, amongst many other things. But that one is really, I think, the leading issue.
John: You’re in the middle now of your 2025 sustainability and social impact strategy. How’s it going compared to when you sat down with your group and drafted it? Are you excited?
Ann: Yeah. It’s funny because at first, my senior leader said we need annual. We do, we measure every year progress we’ve made. If you read that report that we spoke about earlier, it does talk about the progress we made over the past year. We did make progress to reduce electricity, to reduce greenhouse gas emissions, all the things I mentioned before. But when you’re trying to lose weight, you shouldn’t weigh yourself every day. It’s like that. It’s a longer term thing, right?
John: Yeah, it’s a journey.
Ann: Yeah, it’s a journey. Sometimes it’s scary. Sometimes, 2030 seems far away and other days it seems around the corner. We do have some milestones for 2025. We have the next interim in 2030. We don’t have every single answer yet. We have a strategy and a plan, which focuses first and foremost on reduction, which we’ve been doing for the past 20 years. Then driving in efficiencies and the use of green energy. Whether it’s renewables, through solar farms, or recs, or VPPAs, or purchasing green utilities, getting us to 100% renewable energy is the next big feat. Then we are trying to understand and look for new technologies that are emerging, which thankfully there’s a lot of energy being put into carbon capture, carbon removal, lots of new technologies emerging, and more smart buildings, more smart cities, smart built environment. There’s lots going on, which is very encouraging. We should all feel hopeful about that. Then finally, this is not something we would plan to do in earnest till probably 2030. It depends on the industry and when it matures. But carbon offsets, so we’ve been very vocal about we’re not leading with carbon offsets. We expect to be something that we will need to help close gaps when we get closer to 2040. But by then we hope that that is a more standardized and regulated industry than it is today.
John: Understood. For our listeners and viewers who’ve just joined us, we’ve got to Ann Tracy. She’s the Chief Sustainability Officer at Colgate Palmolive. To find Ann and her colleagues and all the important work they’re doing in sustainability, please go to www.colgatepalmolive.com. To find their sustainability report, add a en-us to colgatepalmolive.com. You mentioned recycling earlier, as we were talking about the cross-cultural differences between some parts of Asia, some parts of Europe, and the United States is mentality towards sustainability and the shift from a linear to circular economy historically, not of recent times. You and your great colleagues at Colgate Palmolive came up with this amazingly innovative recyclable tube. Can you talk about some of the biggest challenges when it comes to getting adoption of this recyclable tube? What also, on a macro level, the difficulty to get the adoption of just recycling as a whole in the United States?
Ann: Yeah, so I love telling our tube story. Let me share that with your viewers. But real very quickly to frame it up and again, your listeners can go see the strategy on the website. Our strategy has what we call three ambition pillars, driving social impact, helping millions of homes, and preserving our environment. We have 11 actions that sit underneath those three pillars. Driving social impact is around strengthening DE&I and the health and well-being of our own employees and our communities. That Bright Smiles, Bright Futures Program with the oral health education sits there. Then helping millions of homes is really around designing more sustainable products, both the formulation and the packaging, as well as then helping consumers live more sustainably at home through those products. Then finally, preserving our environment. we have five actions. The climate actions, accelerating action on climate change we call it, sits there, as well as a number of others, zero waste in our facilities and so forth. One of the ones that we’ve really been leaning into just over the past, let’s say five years, is called eliminate plastic waste. That issue has just exponentially accelerated over the past five to 10 years. I think, for people, for us, for anybody out in the environment who consumes things, it’s a very visible issue.
Plastic doesn’t go away. Once it’s produced, it sits on the earth for four to 500 years. The world has just been using and adding so much new fossil fuel based plastic. Different types of plastic too. There’s PET, which is your water bottle, or HDPE, which is your milk jug. Then there’s polyeth- if I’m getting it right, the kind of plastic that you use for your yogurt cups. There’s different types of plastic. It’s a complex issue. We consider out of those 11 actions, we have to do them all. That’s why I said, I’m the master of none, keeper of all. We have to get all that work done. We have a lot of subject matter experts in the company working on that stuff. But there’s a few that we really, let’s say, want to lead. One of them that we’ve been investing time, resources, money heavily into is this action of eliminate plastic waste. We consider it, if you will, an existential issue of sorts for Colgate, for the other acronym for CPG is Consumer Packaged Goods. All our packaging is plastic today. What are we going to do about it? One of the things we did was we joined the Ellen MacArthur Foundation global commitment. I think over 400 companies now are part of that.
As part of that global commitment, we had to sign up to become 100% recyclable, reusable, or compostable by 2025. We had to commit to a reduction target of reducing the overall virgin plastic that we use. Then we had to agree to get rid of plastic that just was unnecessary. Things like PVC, which is bad for the environment and carcinogenic. We’re out of that now pretty much. We’re focused very much on the recyclability and the reduction. We said to ourselves back in 2015, it goes that far back, that we are the world’s oral health leaders. This is a fact not many people know, but the Colgate brand name, it’s a global brand and it’s in more homes than any other. Meaning, it’s the highest household penetrated brand in the world. It’s in nearly six out of 10 households around the world. When I talk to people, that’s why I said earlier, nearly half your viewers probably brush their teeth with Colgate. Anyway, we said we’re going to have to lead here. There’s approximately 20 billion tubes of toothpaste consumed every year. We’re about half of that, right? We said, let’s lead here. We’re going to lead, we’re going to develop the first recognized recyclable toothpaste tube. Now, that might sound simple, but the engineering and technology to get it to where we wanted it to be took several years. We had some strict criteria. One, we wanted to make it out of a mono material. One type of plastic that’s already accepted in the recycling stream. Now our recycling rates aren’t great in the US, but PET and HDPE are recycled at the highest rate. We chose HDPE. We said, we’re using that plastic and we have to engineer it so it feels like a tube. If you think about that’s a very rigid plastic. It took some work to get it to feel like a tube. Then most importantly, it had to still protect to our quality standards what was inside.
It made sure that it didn’t allow for degradation of fluoride or flavor. The old tube, the one that you can roll up, the reason you could roll it up, there was a layer of aluminum in the middle. That aluminum was there to protect what was inside. But if you have aluminum layered by plastic, different kinds of plastic, you can’t recycle it. That’s why that one wasn’t recyclable. Finally, we got it to where we wanted it to be. We do all our big development here in the US. We worked alongside a group called the Association of Plastic Recyclers, which is a nonprofit that is the thought leaders around what is truly recyclable in the US, one of the main thought leaders. We worked alongside them sharing what we were doing, so that we knew when we got to the end that, yes, this would be recyclable. They were a partner along the way. Finally, we got it to where we wanted it. Then we said, now we’re going to roll it out across every single one of those nine to 10 billion tubes that we make around the world. The bottleneck was we make most of our own tubes. We had to buy all new equipment. We make the laminate [inaudible] the tubes. Then we had to form the tube. We form our own tubes and we fill them. We had to purchase a lot of equipment. That was the bottleneck, actually. We’ve been rolling it out. We started in the US and Europe, because that’s where all the recycling, collection, and sorting infrastructure is. But we are continuing that rollout across the world, in Asia, in Latin America.
We’re committed to moving every tube. In some parts of the world, quite frankly, there’s a chicken and egg thing because the infrastructure isn’t where we want it to be in terms of maybe it gets collected. But we said we have to go first, it will never become recyclable unless you just put it out there. One of the challenges, you mentioned the challenges is, I always say half the job was the engineering and rolling it out. The other half of the job is now educating the infrastructure. The material recycling facilities are immersed across the US. The big recycling, value chain players, like waste management, talking to them, working with NGOs, making sure it’s understood that these are recyclable, and doing the same thing, frankly, in every country around the world, and participating in parts of the world where infrastructure isn’t quite there yet, and partnerships to help move that forward. We have many NGO partnerships around the world that help with the topic, if you will, of circular economy and recycling. That’s what we’re doing. Then the other thing we did, which our CEO took this decision, was to share the technology. We didn’t keep that to ourselves. We said, we shared and encouraged in at over now 70 different venues other tube makers and tube producers to move to an HDPE tube. Because if you go to a MRF, it doesn’t make sense if just Colgate is recyclable and nobody else is. The purpose is to get it to scale quickly. Then all tubes are recyclable.
John: Two points there. First of all, let’s go back to what you said 30 minutes ago. One of the pillars of recycling, it goes back to what you said about matching up with our culture in America, which is a culture of, as you said, convenience. How do you make it convenient for people to recycle that tube? How is that and how do you also disseminate that information to make sure we all understand the tube is now recyclable?
Ann: Well, there’s a method to our madness. It was first designing the tube, starting to roll it out, getting to some critical mass of our own production. Then in parallel, starting to communicate across the value chain of what I call recycling value chain, making sure that it’s adopted by the collection groups. Then finally, the last group that we need to educate is the consumer. But it wouldn’t have made sense to start with a consumer. When the first tube rolled off the line at the end of 2019, it happened to be at Tom’s of Maine tube. But if we would have gone out then and started saying, we have this recycling, we still face, I’ll say criticisms at times. We then often sit down and explain exactly like I did with you our process and what we’re doing. This is a journey and, like I said before, it’ll never become recyclable unless we make it. That’s what we’re doing and we’re committed to it. Then we are now starting to communicate to consumers because by the end of this year, the majority of our tubes in the US will be converted and in Europe. We do have the green arrows on our tube now. If you did use Colgate today, chances are pretty high, depending on which brand you used, that you can go home and look and there’ll be the green arrows on it. We did have a short campaign where we were trying to amplify it. We tried that. We did receive some criticism for that. But I think, when the time is right, we will be more vocal with consumers that, hey, you can recycle this. It’s interesting because most recycling happens with products in the kitchen, not in your bathroom. If you put it on the carton, people usually throw away the carton. Then you use typically your tube for 150 applications. [crosstalk]
John: Probably we might use toothpaste, which is the Total brand, I probably just saw it, that’s a cool green icon there. I probably wasn’t paying enough attention.
Ann: Well, I mean, now we’re talking about bigger behavior changes in the US that have to happen, not just for the tube but for getting people to understand recycling. Now, if you use Total, then you’re using a recyclable tube. I can pretty much tell you.
John: All right. Going back to what you said about making it an open source, it’s fascinating that you take your brand and the great leadership at your company takes a tremendous high road. What I call the high road is this, it used to be when we were young folks, and I say that only just out of a shared generation with you, that business was much more mano a mano and kill or be killed. But in this world of sustainability, what I’ve noticed, and again, you’re following that same theme is these there’s a greater wisdom and a greater thinking that this is not a zero-sum game, that any sustainability is a journey. But the winners and losers are not Colgate or your competition. It’s are we going to go and save the world together and get all the stakeholders aligned? Or are we just going to let this world continue to erode right before our eyes and the planet erode and the environment erode. It’s such a nice thing to hear, again, that theme of you making that technology open source and available to everybody. Because that way, all the stakeholders are going to win and because we’re all sharing this planet together.
Ann: Now, and I mean, if you listen to how I told this story, no one company can do this alone. You heavily rely on partnerships along the way, including your suppliers. That’s one of the things I love about my job now is because it is very external. There has been, I would say, a significant increase in companies understanding the boundaries very clearly, the anti-trust boundaries, but working together on some of these big issues where we’re steering very clear of true competitive elements and pricing and things like that. But we’re working on big issues where it makes sense and where we can comfortably work together on these things. We really do have to. A lot of the climate issues that we spoke about are going to require big standards, because you can’t have different companies going out of different ways. We won’t know the collective impact if we don’t follow the same standards. Even in some of the instances, coming together, Chief Sustainability Officers and their teams, to talk about what makes sense to build those standards and engage in companies because we’re the ones that have to live with it. I think that’s important. When the SEC put the proposal out a year ago last March, they asked for feedback. Well, they got it. I think they got at the end over 15,000 letters and just commenting, which I think is positive. I do think there’s a role for policy and regulation to play in all this to get those standards in place, to get us on a level playing field, and comparing apples to apples. As long as it’s not hindering and constraining too much the way forward, I mean, we’ve been around for 217 years. We want to be around for another 200 years.
John: Great. I love it. I also see your collaborative approach and back to your ties to Columbia, you’re also not only a member of Ellen MacArthur, which I love, and it’s an organization that we’re involved with as well. We get graded by them every year, independent grading. I think they’re just a wonderful organization. But you’re also involved with the Closed Loop Fund. Just for truth in advertising, Closed Loop is an investor in ERI and Ron Golden sits on our board. That ties back to Columbia connections as well.
Ann: It’s a small universe in this space.
John: Small for sure. I see where your supply chain experience played very strongly into your Chief Sustainability Officer role. Because as you methodically laid out, just the buildup on the recyclable tube was a supply chain issue first. Supply and design, R&D and design and then build and then supply chain, which then led to the careful rollout, which then leads to a careful marketing and [crosstalk] education. The supply chain experience that you have can be tremendously beneficial and informative to your important role that you have now. Where are you going? You just published your sustainability report, which we’ve already told our listeners and viewers where to find it. What’s next? I mean, where do you go next with such an important and iconic brand? Because when you move the needle end compared to smaller brands out there, it truly moves the needle and it does change behavior and change mindsets and hearts on how important this issue is. What’s next and what do you think of next year?
Ann: A couple things. It’s funny because I just got that exact same question asked to me yesterday. I think I can answer that both from an internal standpoint and external standpoint. First, internally, one of the things we’re trying to do right now is begin a deeper education with all Colgate employees. We just rolled out, it’s early days, something we called Sustainability 101, where the end goal is to help each function, if you think we have over a dozen functions in the company. We have not only my team, supply chain. We talked a lot about product development. We have HR, we have IT, we have finance, we have digital, we have every function that is required to run a multinational company. There’s not one function that doesn’t play a role in moving our sustainability agenda forward at Colgate. Honestly, even we’re working very closely with finance now on a number of whether it’s understanding impact investing, like Closed Loop, or looking at funding all of these projects that we talked about, or tax implications of the new IRA.
I mean, there’s lots going on with finance. IT, you may ask yourself, well, how does it get involved? There’s lots of ways, but one of the biggest ways we’re collaborating with IT right now is putting a digital roadmap in place for sustainability. Because there’s so much data we have to manage, data is incredibly important to understanding how are we making progress. There’s many tools, emerging systems and tools emerging out there. We’re trying to understand, sort through what’s the best roadmap for us on a digital journey. Because a lot of the data we gather is heavily manual. We really want to try to get to a truly automated place. Every function has a role. We need to educate everybody, starting with the macro, what is climate change? What does 1.5 degrees mean? I mean, we take it for granted because we’re so close to it. But why is that important? Why is this plastic issue important? Why is Colgate doing this and not that? That’s the 101. Then we’ll go deeper into some of these issues with the functions that need more. But I think, so where are we going next internally is that now with all this foundation we’ve built and the journey that Colgate’s on over 20 years, as we try to bring this to life through our brands and our products, you brought up the tube, how do I know to recycle it?
Well, that’s the next step is to help consumers develop more sustainable behaviors. We have to do that. I think they’re looking at companies, how do you help me do that with your products, right? That’s what we’re trying to do. We’ve built it into our strategic growth plan. Sustainability is a part of that plan. We believe it’s a huge opportunity for the business. We’re trying to understand how to truly embed it across all those functions. Are we there yet? No. But that’s the journey. That’s where we are and what we want to make happen. Education, making it a true part of our strategic business plan. Then externally, continuing to engage all the important stakeholders out there, I would say.
John: That’s awesome. Well, Ann, thank you so much for your time today, for your wisdom, for your vision, and all the great work that you and your colleagues are doing at Colgate Palmolive. For our listeners and viewers, to find Ann and all her colleagues at Colgate Palmolive, please go to www.colgatepalmolive.com. To find their new sustainability report, which just dropped yesterday add to the back of colgatepalmolive.com en-us. Ann Tracy, you’re making the world a better and greener place. You’re making tremendous impacts. Thank you for joining us on the Impact podcast today and you’re always welcome back here.
Ann: Thank you so much. It was a delight. Thanks.
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