Colgate Sustainability Report 2014 Giving the World Reasons to Smile 2 of 80 Giving the World Reasons to Smile About This Report Unless otherwise indicated, this report includes environmental, occupational health and safety data from 100 percent of Colgate-Palmolive-owned manufacturing and technology centers around the world, excluding contract manufacturers. Financial information is presented on a consolidated basis and in U.S. dollars. The report provides data for Colgate’s fiscal year 2014, along with prior history and more recent updates where indicated. This report contains Standard Disclosures from the GRI Sustainability Reporting Guidelines. For feedback, questions and comments related to Colgate’s 2014 Sustainability Report, please contact [email protected]. For all other inquiries, please visit Colgate’s Consumer Affairs site at www.ColgatePalmolive.com. Contents: Message from Ian Cook 3 Company Profile 4 2011 to 2015 Strategy 6 2015 to 2020 Strategy 7 Progress to Date 8 Awards and Recognition 9 n People 10 n Performance 30 n Planet 46 Partnerships 71 Key Performance Indicators 74 Global Reporting Initiative (GRI) Index 75 Reconciliation of Non-GAAP Financial Measures 79 Cautionary Statement on Forward-Looking Statements This report, including our 2011 to 2015 and our 2015 to 2020 Sustainability Strategies, contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (SEC) in its rules, regulations and releases. These statements are made on the basis of Colgate’s views and assumptions as of this time and Colgate undertakes no obligation to update these statements, except as required by law. Colgate cautions investors that such forward-looking statements are not guarantees of future performance and that actual events or results may differ materially from these statements due to a number of factors. For information about factors that could impact Colgate’s business and cause actual results to differ materially from forward-looking statements, consult our filings with the SEC (including the information set forth under the caption “Risk Factors” in Colgate’s Annual Report on Form 10-K for the year ended December 31, 2014). 3 of 80 Message from Ian Cook Colgate people everywhere are “Giving the World Reasons to Smile.” Through the hard work and leadership of Colgate people everywhere, we continue to make great strides toward our 2015 and 2020 sustainability goals. This commitment is demonstrated through the programs and partnerships that bring our brands and our values to life around the world. And Colgate’s long- standing dedication to sustainability is helping to drive our strong performance. Our 2011 to 2015 Sustainability Strategy set focused, measurable goals aligned with our business objectives. In the People, Performance and Planet sections of this report, you will see the continued progress in all areas of the strategy. Importantly, we have continued to improve children’s oral health through our “Bright Smiles, Bright Futures” oral education program, reaching over 50 million children last year for a total of 800 million since the program’s inception. Over 70 percent of our products developed last year had an improved sustainability profile. We also continued to make excellent progress on our Planet commitments to reduce greenhouse gas emissions, water and waste. Our newly established goals for 2015 to 2020 build on existing commitments, taking us deeper into the areas where we can truly make a difference. This report outlines these new commitments, including further improving the sustainability profile of our products and packaging, reducing absolute greenhouse gas emissions by 25 percent and responsibly sourcing forest commodities to reach zero net deforestation. A new target to reach 1.3 billion children with our “Bright Smiles, Bright Futures” oral health education program will help us continue to improve the oral health of children around the world. The stories and achievements in this report attest to the power of Colgate people achieving extraordinary results by working together. With this strong commitment evident everywhere, I am confident that we will continue “Giving the World Reasons to Smile” for years to come. Thank you, Ian Cook Chairman, President and Chief Executive Officer 4 of 80 Company Profile Founded in 1806, Colgate-Palmolive is a $17.3 billion consumer products company that serves people around the world with well- known brands that make their lives healthier and more enjoyable. Colgate Brands Colgate manufactures and markets oral care, personal care, home care and pet nutrition products under trusted brands such as: Colgate, Palmolive, Speed Stick, Lady Speed Stick, Sanex, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex, Tom’s of Maine, Ajax, Axion, Soupline, Suavitel, Hill’s Science Diet, Hill’s Prescription Diet and Hill’s Ideal Balance. Operations Colgate operates in over 80 countries and its products are marketed in over 200 countries and territories. Approximately 37,700 Colgate employees drive our success. Headquartered in New York City, Colgate operates through six divisions around the world: ® ® ® North America Latin America Europe/South Pacific Softsoap Blue- PMS 661 Silver- Foil Stamp Africa/Eurasia Asia Hill’s Pet Nutrition Six Divisions The Company has over 50 manufacturing and research facilities globally. The vast majority of Colgate products are manufactured in Colgate-owned facilities. 5 of 5880 Company Profile Business Strength Colgate Values Colgate’s success is linked to the Company’s values of Net Sales ($ billions) Caring, Global Teamwork and Continuous Improvement. 17.4 17.3 (1) 17.1 All per share amounts 16.7 have been restated for n Caring the 2013 two-for-one The Company cares about people: Colgate people, stock split. 15.6 (2) 2013-2014 exclude customers, shareholders and business partners. Colgate charges related to is committed to act with compassion, integrity, honesty the 2012 Restructur- and high ethics in all situations, to listen with respect ing Program. 2012 ’10 ’11 ’12 ’13 ’14 excludes costs related to others and to value differences. The Company is Dividends Paid(1) ($ per share) to the sale of land in also committed to protect the global environment, to Mexico. 2011 excludes 1.42 1.33 costs associated with enhance the communities where Colgate people live 1.22 1.14 business realignment and work and to be compliant with government laws 1.02 and other cost-saving and regulations. initiatives. A complete reconciliation between reported results (GAAP) n Global Teamwork and results excluding these items (Non- All Colgate people are part of a global team, committed ’10 ’11 ’12 ’13 ’14 GAAP), including a to working together across countries and throughout the Gross Profit Margin And Additional description of such (2) world. Only by sharing ideas, technologies and talents Information (% of sales) items, is available on 61.00 Colgate’s web site. can the Company achieve and sustain profitable growth. 59.1 (2) 58.8 58.7(2) (3) 1.9 58.3(2) 2013-2014 exclude 57.6(2) 58.6 59.75 1.8 1.8 58.5 charges related to the n 58.1 Continuous Improvement 1.7 1.7 2012 Restructuring 57.3 Program, Venezu- Colgate is committed to getting better every day in all 58.50 ela remeasurement it does, as individuals and as teams. By better under- charges and certain standing consumers’ and customers’ expectations and other 2013-2014 items. 57.25 ’10 ’11 ’12 ’13 ’14 2012 excludes charges continuously working to innovate and improve products, related to the 2012 services and processes, Colgate will become the best. 56.00 Operating Profit And Additional Restructuring Program ’14’13’12’11’10 Information(3) ($ billions) and certain other 2012 (3) (3) 4.1(3) 4.2 items. 2011 excludes (3) 3.9(3) 4.0 Colgate External Policy Statements 3.8 costs associated with 3.8 3.9 3.6 3.6 business realignment 3.5 n and other cost-saving Environmental, Occupational Health initiatives and certain & Safety Policy Statement other 2011 items. 2010 n Code of Conduct excludes a charge related to the transition n Supplier Code of Conduct to hyperinflationary ’10 ’11 ’12 ’13 ’14 n Product Safety Research Policy accounting in Venezu- n Diluted Earnings And Additional ela and certain other State of California Disclosure: Information(1)(3) ($ per share) 2010 items. A complete Supply Chain Transparency (3) (3) 2.93 reconciliation between (3) 2.84 n (3) 2.68 Global HIV/AIDS Policy Statement 2.42(3) 2.51 reported results (GAAP) 2.57 and results excluding n 2.47 2.38 2.36 Ingredient Safety Policy 2.16 these items (Non- n Policy on No Deforestation GAAP), including a n description of such Quality Policy Statement items, is available on page 79. ’10 ’11 ’12 ’13 ’14 6 of 80 2011 to 2015 Strategy Promoting Contributing Delivering Making Reducing Healthier to the Products Every Drop Our Impact Lives Communities That Delight of Water on Climate Where We Live Consumers Count and the and Work and Respect Environment Our Planet We Will We Will We Will We Will We Will n Promote health n Commit over $300 n Increase the sustain- n Reduce the water n Reduce energy and wellness to reduce million to increase ability profile in all new consumed(2) in the consumption(2) and employee health risks our impact in the products we produce manufacture of our carbon emissions(2) by 15%(1) community and in the balance of products by 40% vs. associated with the n Achieve a 5% reduc- n Partner with our portfolio 2005 consumption manufacture(3)