colgate: respecting the world around us

Living Our Values For Sustainability

300 Park Avenue New York, NY 10022-7499

Contact Information

Business Practices & Corporate Social Responsibility

Colgate-Palmolive Company300 Park AvenueNew York, NY 10022 USAPhone: 212-310-3710Fax: 212-310-3745Email: [email protected]

We welcome your comments.Our Global Values Report can be found on the Internet at www.colgate.com

Other Colgate Publications Available

■Advertising Placement Policy Statement■Annual Report ■Annual Report of Laboratory Research

with Animals ■Colgate’s “Best Place To Work” Program■The Colgate-Palmolive Code of Conduct■The Colgate-Palmolive Environmental,

Occupational Health & Safety Policy Statement

■The Colgate-Palmolive Product Safety Research Policy Statement

■The Colgate-Palmolive Quality Policy Statement

■The Colgate-Palmolive Product Guide for Vegetarians

■Colgate Women’s Games Programs■Colgate’s Youth for America Community

Service Competition■The Chairman’s “You Can Make A Difference”

Employee Recognition ProgramPrinted entirely on recycled paper.

©2004 Colgate-Palmolive Company

Design by Robert Webster Inc. (RWI),

www.rwidesign.com

Printing by Quebecor World Acme.

Colgate:Respecting TheWorld Around Us


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We show our respect for each other, shareholders, consumers, customers and suppliers in all that we do. Our initiatives and policies reinforce our commitment to these important stakeholders.

Upholding our global value of caring, we support community programs ranging from promoting good health and hygiene to encouraging education for children and adults.

For Colgate, respecting the environment is an integral part of respecting the world around us. We have made steady progress in using precious resources more efficiently, yet we acknowledge there is still much to be done.

Colgate strives to fulfill its responsibilities to people, communities and our planet as a member of the global community. We recognize that we must continuously improve our efforts.

Colgate’s World of RespectRespect is the cornerstone of Colgate’s global success. As a $9.9 billion consumer products company, we serve people around the world with well-known brands that make their lives healthier and more enjoyable. Wherever we do business, we work with respect for each other, our business partners, our environment, communities and otherinterested stakeholders. page 2

Respect For People page 6

Respect For Communities page 18

Respect For Our Planet page 24

Respect For Tomorrow page 30

Contact Information





■ Advertising Placement Policy Statement■ Annual Report ■ Annual Report of Laboratory Research

with Animals ■ Colgate’s “Best Place To Work” Program■ The Colgate-Palmolive Code of Conduct■ The Colgate-Palmolive Environmental,


■ The Colgate-Palmolive Product Safety Research Policy Statement

■ The Colgate-Palmolive Quality Policy Statement

■ The Colgate-Palmolive Product Guide for Vegetarians

■ Colgate Women’s Games Programs■ Colgate’s Youth for America Community

Service Competition■ The Chairman’s “You Can Make A Difference”


© 2004 Colgate-Palmolive Company


www.rwidesign.com


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A Message From Senior Management

Colgate’s success is founded on the Company’s core values of Caring,Continuous Improvement and Global Teamwork. Evident in all aspects of ourbusiness, these values are the driving force behind everything we do. They arethe reason for our commitment to providing safe, high quality products thatenhance the lives of consumers around the world. These values fuel our suc-cessful long-term efforts to increase shareholder return, and they guide ourefforts to create a workplace where all Colgate people act with integrity andwith respect for one another.

Given their overwhelming importance, our values are the logical focus for this report outlining Colgate’s social, environmental, and economic per-formance and our enduring respect for the people and the world around us. As we begin sharing this information more broadly, our goal is to communicatethe nature of our business operations, our commitment to people and theirdevelopment, the impact of our values on our activities, and our support for the communities in which we live and work. As we expand our global data collection regarding our social, environmental, and economic performance as well as other sustainability indicators, we expect our reports to grow and evolve. We understand that our work is never done and that we haveopportunities for improvement. In subsequent reports, we will update you onthese areas and show you how our value of Continuous Improvement has madea difference to our business, people, communities and the world around us.

In this first report about our values in action, you will see evidence of how Colgate people strive to simultaneously achieve business success and contribute to the global community. You will see that Colgate’s commitment to its values includes consistent programs and processes around the world creating a global culture based upon integrity.

We strongly believe that our responsibility to promote shareholder interestsincludes our duty to act responsibly in all aspects of our business. Our valueshave been and will continue to be our guide in fulfilling these duties to share-holders, Colgate people, consumers and all who depend upon us. We welcomeyour interest in these most important aspects of our Company.

Reuben Mark

William S. Shanahan

Lois D. Juliber

Ronald T. Martin

Reuben MarkChairman & Chief Executive Officer

William S. ShanahanPresident

Lois D. JuliberVice Chairman

Ronald T. MartinVice President, Global Business Practices & Corporate Social Responsibility

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Colgate’s World of Respect

Respect is the cornerstone of Colgate’s global success. As a $9.9 billion consumer products company, we serve people around the world with well-known brands that make their lives healthier and more enjoyable. Whereverwe do business, we work with respect for each other, our business partners, our environment, communitiesand all of our stakeholders.

Colgate traces its origins to 1806 when anEnglish immigrant, William Colgate, started astarch, soap and candle business in New YorkCity. The Company became Colgate-Palmolive-Peet in 1928 after joining with another

company. The name was subsequentlychanged to Colgate-Palmolive Company. Bythat time, the Company was selling laundrysoap as well as many different kinds of toiletsoaps, perfume and dental products. TheCompany’s leadership in Oral Care goes backmore than a century when, after selling dentalcream in jars, Colgate made its product muchmore convenient by developing collapsibletoothpaste tubes similar to those used today.

In 1976, the Company expanded beyondhome and personal care products to include pet nutrition with the acquisition of Hill’s PetProducts. Other acquisitions that followedincluded the liquid soap businesses sold underthe Softsoap name; Murphy Oil Soap; theMennen Company and its Speed Stick brands;and Kolynos, one of the largest producers oftoothpaste in Latin America. In 1998, Colgatedecisively became the toothpaste market leaderin the U.S., due to the success of Colgate Total,the first toothpaste approved by the U.S. Food& Drug Administration and accepted by theAmerican Dental Association for protectionagainst cavities, gingivitis and plaque.

Colgate Today

■ $9.9 billion in sales

■ Products sold in over 200 countriesand territories

■ Approximately 70% of sales frominternational operations

■ Global market share leader in tooth-paste, hand dishwashing liquid, liquid hand soap, liquid cleaners and specialty pet foods

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Our Vision and Values

Our vision is simple: to be the best truly globalconsumer products company. While workingtoward this vision, we are guided by three core values: Caring, Global Teamwork andContinuous Improvement.

Caring

The Company cares about people — Colgatepeople, consumers, community members,shareholders, business partners and otherstakeholders. Colgate is committed to act withcompassion, integrity and honesty in all situa-tions; to listen with respect to others and tovalue differences. The Company is also commit-ted to protect the global environment andenhance the communities where people liveand work.

Global Teamwork

All Colgate people are part of a global teamand recognize that by sharing ideas, technolo-gies and talents, the Company can achieve andsustain profitable growth.

Continuous Improvement

Colgate people are committed to getting betterevery day in all they do, as individuals and asteams. By better understanding the expecta-tions of consumers, customers and other stake-holders, and continuously working to innovateand improve products, services and processes,Colgate will become the best.

Commitment to Ethical Business PracticesRecognizing that corporate culture has a majorimpact on results, Colgate has well-established,consistent processes and procedures to ensurethat business is conducted in a highly ethical

manner in every country where we operate. A global Code of Conduct is the foundationwhich guides our behavior.

Colgate has a Global Business PracticesDepartment, headed by a senior executive officer, which oversees compliance with allaspects of the Code and related monitoringand enforcement. The Global Business Practicesfunction also supports a global training effortand maintains a telephone, facsimile and e-mailhotline through which employees and suppliersmay report suspected violations of the Code ofConduct. Anyone contacting the hotline mayidentify himself or herself or report anonymously.In addition, the Company has other auditingprograms that address International LabourOrganization (ILO) issues, including a programto periodically audit all of its manufacturingand research facilities worldwide for compli-ance with local law and Colgate standards gov-erning environment and occupational health

and safety. An independent third-party consult-ant, Environmental Resources Management,Inc., has reviewed and confirmed the reliabilityand objectivity of this audit program.

Colgate has demonstrated its leadership inthe area of human rights in many ways. TheCompany joined nine other multinational com-panies and organizations as a charter signatoryto the Global Sullivan Principles. The formerCouncil on Economic Priorities has recognizedColgate for its accomplishments in the areas ofequal opportunity, charitable giving, environ-ment, the advancement of women and minori-ties, and the working environment. The U.S.Department of Labor has also recognized theCompany for its programs promoting theadvancement of women, minorities and peoplewith disabilities. Colgate has been recognizedby Hispanic, Latina Style, Fortune and WorkingMother magazines for providing a workplacethat respects and values diversity. The Companyhas a long-standing commitment to humanrights and fair workplace standards in its ownoperations and those of its suppliers, and has awell-developed compliance process.

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described below. We also work to make ourproducts readily available to our consumers andwe constantly search for breakthrough technolo-gies, acquisitions and outstanding marketingideas that can produce continuous growth.

Funding GrowthColgate’s ability to generate funds to reinvest in the business is critical to driving growth and delivering superior shareholder returns.Sustaining our current businesses, developingand launching new products and investing infuture growth requires that we spend in a num-ber of critical areas, including advertising andpromotion, consumer insight, research anddevelopment, information technology, trainingand people development and capital expendi-tures focused on supply chain savings. Everyarea of our Company can contribute to loweringcosts or increasing revenues. We continuouslychallenge all activities to find ways of increasingrevenue and reducing expenses or to obtaingreater value for the funds that are spent.

Becoming the Best Place to WorkOur third business strategy, Becoming the BestPlace to Work, is a company-wide effort toattract, retain and reward the best talent. AtColgate, our long history of profitable growth,product innovation, and global market leader-ship are the result of the quality and talent ofour people.

More than any program, service or benefit,Becoming the Best Place to Work represents acommitment by Colgate people to live our val-ues of Caring, Global Teamwork and ContinuousImprovement, manage and treat one anotherwith respect, and take personal responsibility forcreating and sustaining a better workplace.

Colgate’s supply chain organization manages aprocess ranging from sourcing raw materials todelivering products to the store shelf. At Colgate,we produce most of our products in Colgate-owned factories around the world, where wecontinuously look for new ways to do thingsbetter, faster and safer.

Funding Growth with SavingsAligned with the Company’s business strategy offunding growth, the supply chain continuouslyimproves to generate funds for the Company. To keep funds flowing for reinvestment andincreased profitability, Colgate focuses its capitalcash spending on areas that improve marginsand fund growth. Capital cash spendingamounted to $366.6 million, or 4.1% of sales, in2000; $340.2 million, or 3.7% of sales, in 2001;and $343.7 million, or 3.7% of sales, in 2002.

In recent years, key investments have included high-speed manufacturing lines in

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Categories Key Brands

Oral Care Colgate, Sorriso, Kolynos

Personal Care Palmolive, Mennen, Speedstick, Softsoap, Protex

Household Surface Care Palmolive, Axion, Murphy Oil Soap, Ajax, Fabuloso

Fabric Care Soupline, Suavitel, Fab, Ajax

Pet Nutrition Science Diet, Prescription Diet

Our Key Brands

Our Business Strategy

Our Global Supply Chain

Colgate is a truly global company doing busi-ness in more than 200 countries and territories.Our success is tied to the achievement of oursimple, three-pronged operating strategy:Driving Growth, Funding Growth andBecoming the Best Place to Work.

Driving GrowthDriving growth of our core global brands is keyto Colgate’s success. We are tightly focused onfive global businesses: Oral Care, Personal Care,Household Surface Care, Fabric Care and PetNutrition. Today, the global brands within thesecategories account for 80% of the Company’sbusiness, up from 24% in 1980.

We grow our business by delivering a constant stream of innovative products thatdelight our consumers, create new segmentsor meet existing needs in superior ways. Wecarefully align our resources for growth. OurGlobal Business Development, Research &Development (R&D), Manufacturing andInformation Technology functions are all part of one organization, the Global GrowthGroup. Our supply chain organization workson improving our speed to global markets as

112factories

1996 2004

77factories

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Financial Highlights

Dollars in Millions Except Per Share Amounts 2003 2002 2001

Worldwide Sales $9,903.4 $9,294.3 $9,084.3Gross Profit Margin 55.0% 54.6% 53.4%Operating Profit $2,166.0 $2,013.1 $1,834.8Operating Profit Margin 21.9% 21.7% 20.2%Net Income $1,421.3 $1,288.3 $1,146.6Percent to Sales 14.4% 13.9% 12.6%Earnings Per Share, Diluted $2.46 $2.19 $1.89Dividends Paid Per Share $0.90 $0.72 $0.675Operating Cash Flow $1,767.7 $1,611.2 $1,503.9Percent to Sales 17.8% 17.3% 16.6%Return on Capital 38.0% 34.6% 29.7%

Shareholder Information

Number of Registered Common Shareholders 37,700 38,800 40,900Number of Common Shares Outstanding (in millions) 533.7 536.0 550.7

North America, Europe, Latin America and Asia,which have accelerated product delivery bring-ing a return on investment faster. Other invest-ments have increased vertical integration, suchas in-house bottle-making for liquids in LatinAmerica.

We continue to gain efficiencies from regionalization of manufacturing operations.For example, a toothpaste plant in Thailandservices Southeast Asia and a toothbrush plantin China services the world. A new regionalsoap plant in the Asia-Pacific region is now supplying broad sections of the region better,faster and safer. In Brazil, our modern oral carefacility exports toothbrushes, dental floss andtoothpaste to over fifty countries. When consol-idation or restructuring results in a reduction inthe workforce, significant efforts are expendedto assist those Colgate people in identifyingother job opportunities.

Additionally, the Company lowers total coststhrough innovative partnerships with suppliers;regional and global sourcing of raw materials,packaging and finished products; and improv-ing manufacturing systems. This reflects theCompany’s deep commitment to global team-work including alliances with business partnersaround the world to achieve common goals.Other cost-savings activities include driving outproduct complexity with more product andpackaging standardization and capitalizing onthe Company’s partnership with the technologyfirm SAP to enable efficiencies that generatesavings. This informational technology standardhas been implemented in countries represent-ing 95% of the business based on revenue.Colgate’s increasingly efficient supply chain hasbeen a key contributor to the improvement ingross profit margin for the Company. Colgate’sgross profit margin improved over the yearsfrom 37.9% in 1984 to 55% in 2003.

Financial Highlights

An important measure of the Company’s suc-cess is its financial performance, which sup-ports general economic growth that benefits all constituencies. Colgate has set records yearafter year in all key indicators. During the past19 years, the Company’s earnings have grownat a compound average rate of nearly 14%.

Detailed financial and other Company infor-mation is presented in an interactive format onthe Investor Relations page of Colgate’s web-site, accessed at www.colgate.com. ■

S&P 500 Peer Group Colgate

+186%

+245%

+281%

Achieving Outstanding Financial Success

10 Year Total Shareholder Return

Over the past 10 years, Colgate has pro-vided its shareholders with a higher returnthan its competitors and the S&P 500.

Increasing Supply Chain Efficiency

Focused Manufacturing

Since 1996, Colgate’s movetoward consolidating manufac-turing in fewer plants hasreduced the number of Colgatemanufacturing facilities world-wide from 112 to 77.

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Respect ForPeople

Respect for Colgate People

At Colgate, people make the difference.Wherever we do business, Colgate people setour Company apart from the competition; wedrive product innovation, market leadershipand profitable growth. To succeed, theCompany must attract and retain the best peo-ple. As Colgate strives toward being the besttruly global consumer products company, wecontinue to put programs in place to create aworkplace that reflects our value of caring andrespect for Colgate people and develops theirskills to meet their potential.

Guided by Values and the Code of ConductTo create a corporate culture firmly groundedin trust and integrity, the Company is guidedby our three overriding values: Caring, GlobalTeamwork and Continuous Improvement.

All Colgate people receive training on howto make these values part of their efforts every

day. Within six months of joining the Company,all employees attend “Valuing Colgate People,”a course designed to help people of all back-grounds understand how to work bettertogether in a team environment and to valuethe contributions of all Colgate people. Theylearn that to care for Colgate people, con-sumers, shareholders, business partners andother stakeholders, we must act with compas-sion, integrity and honesty in all situations, lis-ten to others and value differences. They learnthat all Colgate people are part of a globalteam working together across countries andthroughout the world, sharing ideas, technolo-gies and talents. And they also learn that suc-cess comes by getting a little better every day.

To reinforce and enhance the corporate culture, Colgate first formalized its Code ofConduct in 1987 to set the framework forworldwide principles which govern relation-ships with fellow employees, the Company,outside businesses, consumers, governments,local communities and shareholders. The Codeclearly defines Colgate’s commitment to humanrights, including our policy to oppose and not

We show our respect for each other, shareholders, consumers, suppliers, customers and other stakeholdersin all that we do. Colgate people are at the heart of our success; they are our most important competitiveadvantage. Shareholders serve as one of the important sources of revenue necessary to support steady,continuous growth. Consumers are also important stakeholders. Because our business is consumer prod-ucts, our success depends upon their satisfaction. Colgate’s programs and policies are designed to respectall our stakeholders.

Global

to use child labor, defined as work by any per-son younger than 16 years of age. The Codealso states Colgate’s respect for employees’ law-ful freedom of association. The Colgate Code ofConduct is regularly reviewed and updated tomeet changing needs.

Ensuring that the Code is understood and followed worldwide, the standards of

conduct are communicated to employ-ees in more than 25 languages, in pamphlets as well as on the Colgate Intranet. A letter from the Chairman reminds all employees of their responsi-bility to bring to the attention of their managers any situation they believe to be in conflict with the Code. They are reminded that they can report question-able or inappropriate conduct via the Colgate Hotline and can do so anony-mously if they choose. This 24-hour hotline is available for all employees and vendors to report any potential violations

as well as to provide Colgate employees withethics advice and clarification about how theCode of Conduct might apply to specific situa-tions. Additionally, all supervisors, managersand executives learn more about theCompany’s ethical business standards in amandatory course called “Business Integrity:Colgate’s Values at Work.”

Producing a written code of conduct is not enough. The Global Business PracticesDepartment, headed by an executive officer,oversees compliance with the standards setforth in the Company’s Code of Conduct andBusiness Practices Guidelines. All reported viola-tions are promptly investigated and are treatedconfidentially to the greatest extent possible.Colgate people are assured they will not beretaliated against as a result of reporting apotential violation of the Code of Conduct.

Becoming the Best Place to WorkColgate’s goal of becoming the best place towork is so important to achieving success thatit is now a fully developed global initiative. Sixfactors have been identified as essential for

“Becoming the Best Place To Work.” These are listed in the table (below left).

To support this initiative, Colgate peopleshare in the success they help to createbecause Colgate’s compensation philosophy isto reward excellence and pay-for-performance.Whether it’s excellence on an individual, team,business unit or global basis, the greater theperformance, the greater the reward.Incentives are centered on supporting theCompany’s business goals of Driving Growth,Funding Growth and Becoming the Best Place to Work.

Recognizing the broad dimensions of per-sonal life, the Company, in addition to encour-aging a balance between work and personallife, offers a number of other employee benefitsto help meet personal needs. The benefits varyat different locations around the world due tolocal customs and laws, but can include near-site backup childcare centers, emergency in-home care for dependent children and adults,

academic advisory services, tuition and educa-tion assistance, personal services for legal,financial, health and wellness advice, andcounseling services among others. Some ofthese are leading edge, such as an on-site lactation room and generous adoption assistance programs.

Encouraging Education and Training Education and training programs are con-ducted continuously across the Colgate world.A global training curriculum of more than 200courses promotes learning across all disciplinesand at all levels. Guided by a mission of build-ing skills to meet key business needs and sup-port personal development, education andtraining take place in a variety of ways. Peopleenroll in established courses, which are identi-fied for each functional and leadership compe-tency, on Colgate’s Intranet. Overall, employeescomplete an average of about 40 hours oftraining per year.

Colgate’s education and training philosophyis guided by four principles: the programs mustbe Colgate-specific; share best practices; have a

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Fundamental Values

Exciting Work

Motivating Environment

Stimulating Careers

Recognition and Rewards

Keeping Connected

Caring

Global Teamwork

Continuous Improvement

Communicating Effectively

Giving and Seeking Feedback

Valuing Unique Contributions

Promoting Teamwork

Setting the Example

Our Core Values

Factors for Becoming the Best Place to Work

Principles of Managing with Respect

Colgate’s Code of Conduct

The Code reinforces andenhances the Colgate culture.The most recent update wasissued in January 2004 in over25 languages.

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South Africa

Mexico

Malaysia

France

United States

Taking place all over the world,education and training at Colgatehappen in the classroom, on the joband through e-learning.

75% of General Managers are non-American

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practical work application; and be taught byColgate leaders. This philosophy creates aunique learning environment for every Colgatetraining course.

In addition to everyone taking the “ValuingColgate People” course, some courses aremandatory for certain positions. For example,all new managers are required to complete“Managing with Respect” and “Coaching andFeedback.” In “Managing with Respect,” the fiveprinciples are reinforced as being key to achiev-ing superior business results and Becoming theBest Place to Work. People in a variety of sales,marketing and customer marketing positionsmust also take “Promo Power!,” a course onconsumer promotions, and “Key AccountManagement.”

Training for more than 50 computer applica-tions, such as Microsoft Project, SAP and LotusNotes, is available through e-learning, which isaugmenting classroom training to make train-ing more flexible and available.

Identifying and Developing LeadersColgate recognizes that talented people wantassignments that challenge and stretch theircapabilities. Using the same tools throughoutthe Company, Colgate takes a global approachto identify, develop and retain talent. In 2003,CEO Magazine ranked Colgate’s LeadershipDevelopment Program among the best of 240major U.S. companies. The Company encour-ages people to take on challenging and excit-ing work and gives them the experience, expo-sure and support they need to reach theirpotential. Individual development planningenables employees to assess the skills, behaviorsand knowledge they need to achieve specificgoals and then shows employees how to devel-op them. As a result, Colgate people are highlyeffective and flexible in the face of change andare prepared to meet future challenges.

Colgate uses succession management toidentify and develop future leaders to carry onthe long legacy of success. People with highpotential are identified early in their careers so they can follow career paths to leadershiproles, with planned career moves building anarray of necessary skills.

As part of the development process, employ-ees participate in annual objective-setting ses-

sions where expectations for future perform-ance are set. During reviews, Colgate peopleare held accountable not only for achievingresults, but also for how they achieve results,measured in part by how well they demon-strate Managing with Respect principles.

Celebrating Diversity Colgate’s 38,000 people are a bridge to agrowing multicultural marketplace and giveColgate a competitive advantage in the morethan 200 countries and territories whereColgate products are sold. The Company welcomes different viewpoints and values the contributions of all Colgate people. TheCompany’s developmental strategy is to attract,reward and retain a diverse workforce world-wide, create an environment where diversity isvalued, and ensure that diversity is incorporatedwithin the Company and within the communi-ties where employees live and work. As a global company, Colgate strives to provideequal opportunities for everyone everywhere,within widely diverse cultural contexts.

To ensure that Colgate’s approach toManaging with Respect is practiced every-where, Colgate’s training program “ValuingColgate People” is taught in every Colgate subsidiary globally. This course is designed tohelp Colgate people worldwide understandhow to encourage and motivate people of allbackgrounds to meet their personal objectivesas well as the objectives of Colgate. Affinitygroups, such as the Asian Heritage Group,Black Action Committee and Hispanic ActionNetwork in the U.S., are supported by manage-ment for professional and cultural develop-ment.

Colgate’s commitment to diversity goesbeyond Colgate employees to its business partners. For example, in North America anEmerging Business Sourcing program encour-ages purchasing from small- and medium-sizedenterprises owned by minorities and women.Colgate’s spending through these target suppliers has increased 86% since 1998. Thesebusiness partners contribute to successful newproduct launches.

Colgate’s accomplishments in inclusivenesshave been widely recognized externally in the U.S. by such publications as Hispanic

Developing Colgate People

Each year, about 30,000 participants take some 110courses that are taught inmore than 25 languages, in allwork functions and 35 majortechnical disciplines. Allcourses are taught by Colgatepeople, who are certified astrainers after completing professional training courses.

Valuing Multicultural Management

Colgate General Managershold citizenship in more than25 countries.

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Magazine, Latina Style and Working Mother,as well as DiversityInc.com. The Company hasbeen selected by Fortune magazine for its “50Best Companies for Minorities” list as well as forthe “100 Best Companies to Work For.” Hill’s hasbeen named as a best practices company bythe Equal Employment Advisory Council for itssupport of the Martin Luther King, Jr. holiday.Colgate people have been among those citedby the Harlem YMCA’s National Salute to BlackAchievers in Industry.

Recognizing Outstanding AchievementColgate is a firm believer that recognition andreward are an important factor in retaininggood people. Programs not only reward out-standing achievement but also publicly recog-nize individuals whose accomplishmentsexceed expectations.

Inside the Company, the Chairman’s “You Can Make a Difference” Awards Program, introduced in 1986, is designed to reward the entrepreneurial spirit of Colgate people allaround the world. The program recognizesachievements demonstrating innovation, inge-nuity and executional excellence throughoutColgate’s business by people at all levels.

By aligning nominated projects withColgate’s three core objectives of DrivingGrowth, Funding Growth and Becoming theBest Place to Work, it also serves to strengtheneach employee’s connection to the business.

Three times a year, local winners are selectedaround the Colgate world from among projectsthat have been nominated by peers. Fromthese “period” winners, annual award winnersare named, and they go on to be evaluated in

a global judging by representatives of seniormanagement and senior functional leaders.Linking employee contributions to theCompany’s success, Colgate has chosen theCompany’s stock as the main award for win-ners, with values ranging from $250 for periodwinners to $2,500 for global winners.

The program has achieved broad supportand participation, as demonstrated by thethousands of projects nominated each year.Many of the winning projects are established asbest practices, and others have strengthenedthe presence of Colgate within local communi-ties by providing health education and publicoutreach. In addition to widespread supportinternally, the program has also received signifi-cant recognition from others, including theInternational Leadership Award from theAmerican Society for Training & Development.

Employees are also recognized within vari-ous recognition programs throughout the busi-ness. For example, Colgate North America hasa Star award program that honors individualsshowing personal leadership, performancebeyond expectations and actions that presentthem as role models.

Outside the Company, Colgate is recognizedfor its outstanding achievement when awardsare made. In the U.S., Fortune magazine hasincluded Colgate as one of “America’s MostAdmired Companies,” and CEO Magazine listsColgate among the “Top 20 Companies forLeaders.” In Argentina, Colgate has beenamong those cited by Apertura magazine asthe “Best Place to Work.” Colgate-PalmoliveIndia was cited as among the best employersof India in a 2003 Business Today study.

Global

Recognizing Achievement

Since 1986, more than 11,000Colgate people have been honored in the Chairman’s “You Can Make a Difference”Awards Program, recognizingachievements that go beyondwhat is expected.

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Global

Working toward our “goal of zero,”Colgate’s lost workday and record-able accident rates have decreasedby over 80% since 1990, as shownin the graph at right.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Total Recordable Accident Rate

Total Lost Workday Case Rate

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8

6

4

2

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Continuous Improvement in Worker Safety

Keeping Colgate People and Their Families Healthy

Making Occupational Health and Safety a TopPriority. Colgate is committed to maintaininghealthy and safe work conditions in all facilities.In manufacturing, marketing and facility opera-tions, it is the Company’s worldwide policy tocomply with or exceed all local applicablehealth and safety rules and regulations. Colgatecontractors are expected to conform toColgate’s global standards. Health and safetyprinciples guiding the Company’s actions worldwide are part of a comprehensiveEnvironmental, Occupational Health & Safety(EOHS) Policy Statement, available at www.colgate.com.

Colgate EOHS teams throughout the worldserve as the corporate resource for environ-

mental, occupational health and safety, provid-ing advice and assessment of risks independentof commercial concerns. Each Colgate facility isresponsible for implementing global standardsand is audited against them.

EOHS coordinators at all locations undergotraining programs to understand and assurecompliance in factories and research centers.The training programs include technical courses on broad safety subjects as well asmore targeted training on specific issues, suchas enzymes and ergonomics. The focus of the2003 EOHS coordinator training effort centeredon Process Safety Management, a system toensure prevention of potentially hazardouschemical releases.

Colgate also shares safety case studies inorder to spread knowledge and generateideas. Information is exchanged globally about

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potentially hazardous EOHS-related situations in order to prevent similar injuries, accidents orenvironmental incidents.

The Company tracks and reports three measures of worker safety:■ Total Lost Workday Case Rate, measured as

the rate of injuries for 100 workers workingfor one year. This includes all cases thatinvolve days away from work.

■ Total Recordable Accident Rate, measured asall cases that result in loss of consciousness,lost workdays, restriction of work or motion,medical transfer to another job or medicaltreatment beyond first aid.

■ Severity Index, measured as all days lostassociated with lost workday accidents. Webegan to track this data in 2001, and planto report on it in subsequent reports.

Colgate continues to make significantprogress toward building a safer workplace. On a cumulative basis, from 1990 the totalrecordable accident rate and total lost workdaycase rate are down 81% and 85%, respectively.In the past six years, total recordable accidentshave declined from more than five per hun-dred employees in 1995 to 1.06 in 2002. TheCompany has also continued to reduce lostworkday case rates from 2.1 per hundred people to 0.4 in 2002. The decline of 45%from 0.73 in 2001 was the biggest annualreduction ever and surpassed a previous goal a year ahead of schedule.

Each year, Colgate benchmarks safety statis-tics with a consortium of more than 40 globalmultinational companies. Based on 2002 safetyresults, Colgate was ranked in the second per-formance quartile compared with 45 othercompanies reporting safety statistics. This is aconsiderable improvement from 11 years agowhen statistics were first reported and Colgateranked in the bottom of the fourth perform-ance quartile.

Working toward a “goal of zero” — zerofatalities, zero life-altering events, and zero lostworkday and recordable incidents over time —Colgate has programs in place to achieve these goals and address employee safety.

In the manufacturing area, the Companyhas more than 65 internal EOHS standardsdealing with such issues. The standards estab-lish minimum performance expectations on environmental protection and worker health and safety, and provide guidelines

and examples about how a site may achievethe expectations.

In addition to standards and guidelines,Colgate’s global safety program includes train-ing, safety audits, safety statistics, reporting and the establishment of division safety teams.Colgate’s European and Central European divi-sions partner with the European Union Health& Safety Directorate and local governments toparticipate in European Safety Week at eachmanufacturing and R&D location. During 2003Euro Safety Week, Colgate teams focused onthe safe handling of potentially hazardouschemicals.

In another example of a safety programencouraging the commitment to zero acci-dents, Colgate workers in Colombia, their families, the community and suppliers partici-pate in a variety of activities during Safety &Environmental Week. Safety-themed activitiesinclude drawing contests, dance shows per-formed by the children of Colgate employees,fire drills and seminars.

Colgate has internal awards programs to recognize and encourage excellent safety per-formance. The President’s Annual Awards forSafety Excellence are presented to manufactur-ing and R&D facilities that achieve outstandinghealth and safety performance, and thePresident’s Awards for Safety Achievement rec-ognize sites reaching time milestones without a lost workday injury or illness. From 1999 to2002, 50 sites received awards for safety excel-lence and 53 plants won for safety achieve-ment. This represents approximately 79% ofColgate’s total manufacturing and R&D facilities.

Colgate has received external safety awardsas well. For example, the Mexico Ministry of the Labor Secretary and Social Welfare awardedColgate the “Safe Industry” award in 2003.Many plants have especially outstandingrecords. For example, Colgate’s warehouse inMoncton, Canada, has achieved 39 years with-out a lost workday accident or illness, and theSanxiao, China, plant reached five million hourswithout a lost workday accident in 2003.

Also, in 2003, six sites reached three millionhours worked without a lost workday accident;one factory achieved ten years without a lostworkday accident; and three plants reachedfive years worked without a lost workday incident.

Wellness Programs Throughout the ColgateWorld. Colgate’s concern for employee well-being goes beyond a safe and healthy work-place. The Company aims to provide primaryhealth care for employees and their familiesand offers a variety of wellness programs. Insome countries, Colgate has a physician ornurse on staff; in other countries, outside services are used. Because individual countrieshave different health priorities and health systems, implementation of programs variesaround the world.

1998 1999 2000 2001 2002

Number of U.S. Occupational Safety & Health Administration (OSHA) Noncompliances (U.S. Facilities) 5 4 6 0 2

Fines Paid $4,325 $2,625 $7,162 $0 $12,000

Tracking Our Health & Safety Records

Many of the non-compliancesreported from 1998 to 2002were not considered to beserious by OSHA. The non-compliance event in 2002involved two citations for thesame incident. These citationswere considered serious andwere immediately abated. The facility has instituted newprocedures and systems toimprove this aspect of theirhealth and safety program.

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In Colombia, the Dominican Republic andother Latin American countries, a variety of pro-grams for workers, their families and contrac-tors include medical emergency and nonemer-gency services and access to preventive med-ical education. Among the services are annualcheckups, medical evaluations, nutritionaladvice, and stress management and psycholog-ical counseling. At an annual employee healthweek, educational programs using an informaland fun approach emphasize healthy attitudes.

In other countries, health workshops andvisiting physicians help employees learn abouthealth and hygiene. At Colgate-PalmoliveGuangzhou, China, medical professionals givetalks on topics such as oral care, hepatitis B andwomen’s health.

In the U.S., Colgate launched an initiativethis year called Your Health @ Colgate, whichpromotes healthy living and nutrition practices.It includes steps that can be taken to avoid ill-ness, disability and premature death. Existingprograms are being incorporated into this newinitiative, such as one that provides GuidanceResources, and another that gives Colgateemployees access to health information onlineand in newsletters mailed to their homes.

Addressing HIV+/AIDS. Colgate, like other global companies, understands the impact of HIV+ and AIDS, not just on a communityand its people, but also on a company and its business. The spread of HIV+/AIDS profoundlyaffects individual lives everywhere. But in developing parts of the world, it also impacts a local government’s ability to help grow theeconomy and provide services, as resources are needed to educate citizens and to preventand treat this disease.

Led by a group of Colgate people in SouthAfrica, Zambia, Kenya and Zimbabwe, Colgatehas reviewed its policies and practices concern-ing HIV+/AIDS-infected employees and familymembers throughout sub-Saharan Africa. Thereview addressed working conditions of thoseinfected, education and prevention, post-diagnosis counseling, accessibility of medica-tions, and medical and life insurance coveragefor employees and their families. As a result,Colgate sponsors educational workshops onHIV+/AIDS for employees, their families andinterested people within the communitieswhere the Company operates.

In conjunction with local governments,Colgate provides medical and life insurancecoverage to Colgate people in Kenya, SouthAfrica, Zambia and Zimbabwe to cover AIDSand AIDS-related diseases with minimal costs toemployees.

Throughout the Colgate world, we are com-mitted to fair treatment of all Colgate people.We afford the same application of benefit plans and personnel policies and procedurestowards employees with HIV+/AIDS as anyother employee requiring medical treatment.

Through volunteer organizations, Colgatealso helps support efforts such as theZimbabwe AIDS Prevention & SupportOrganization, the Association of People withAIDS in Kenya, the St. Francis Care Centre inSouth Africa and others dedicated to develop-ing vaccines to combat terminal diseases andto care for those having contracted the disease.

With over 5.5 million reported AIDS cases inIndia, China, Thailand and Vietnam, it is clearthat the Company’s efforts must expand intoAsia as well.

United States

Keeping Colgate People Healthy

Some Colgate facilities havehealth care professionals onstaff for Colgate people andtheir families while othershave established arrange-ments with outside facilities.

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Respect for Shareholders

Colgate’s global values ofCaring, Global Teamwork andContinuous Improvement areas important in the Company’srelationships with shareholdersas they are with Colgate peo-ple, business partners, con-sumers and all stakeholders.The Company takes seriously itsefforts to provide shareholderswith a good return on their

investment, and believes that shareholders havethe right to expect Colgate to be not only prof-itable but also ethical and a contributing mem-ber to the social environment in countrieswhere we operate.

Demonstrating Leadership in Corporate GovernanceCorporate governance, the rules and valuesthat direct our business, is more than just wordsat Colgate. Strong ethics guide our Board ofDirectors, which in turn guides good gover-nance. Our Board has been recognized for itsintegrity, independence, experience and diversi-ty. Since 1989, Colgate’s Board of Directors hasbeen made up of outside independent directorswith the exception of the Company’s CEO. Alldirectors who serve on the committees thatoversee audit, compensation and governancematters are independent. It is the Company’spolicy that none of its independent directorsreceive any consulting, legal or other non-direc-tor fees from the Company. With their collectiveexperience in business, education and publicservice, international and diverse backgrounds,educational achievement, and moral and ethicalcharacter, Colgate’s directors provide effectiveoversight of the Company’s business. We are for-tunate to have a group of outstanding individu-als providing advice, guidance and leadership.

Colgate’s Board of Directors, which has beenat the center of the policies and standardsexpressed in the Code of Conduct and BusinessPractice Guidelines, has been a leader in initiat-ing corporate governance standards. In 2001, the Company received the Wharton/SpencerStuart “Board Excellence Award,” pre-sented to one U.S. public company each yearby the Wharton School of the University ofPennsylvania and SpencerStuart for demonstrat-ing leadership in corporate governance. Onthree occasions, the Company has been rankedby Business Week magazine among the top 10Boards in the U.S., most recently in October2002. In September 2002, the Board ofDirectors was named one of five “ChampionBoards” by Corporate Board Member magazine,which cited the open interaction among direc-tors and between the Board of Directors andmanagement.

Conducting Legal AuditsEach year, Colgate locations around the worldare selected for a legal audit. This audit isdesigned to help ensure compliance with local, national and international laws as well as the Company’s Code of Conduct. The AuditCommittee of the Board of Directors is advisedwhere audits are conducted and of significantfindings. This process serves as a preventivemeasure as well as a learning opportunity forthe Company.

Valuing ShareholdersTo align the interests of employees and share-holders, Colgate encourages the ownership ofColgate shares by employees. The Companyrecently adopted stock ownership guidelines forits directors and senior managers.

Colgate is committed to building and main-taining strong relationships and facilitatingaccess of shareholders to senior management.So that the Company’s goals are aligned withshareholder expectations, Colgate encouragesshareholders to offer suggestions on improvingthe business by contacting the Company bytelephone, mail or e-mail listed on the Colgatewebsite. Through this dialogue, Colgate knowsthat shareholders are not solely concerned withfinancial performance but are also interested inColgate’s policies and actions related to embrac-ing social responsibility.

The Company has been recognized for itsrelations with investors, including InvestorRelations Magazine’s Grand Prix award for BestOverall Investor Relations in 1999 and BestNorth American Company in the U.K. market in2000, 2001 and 2002. In its 2003 ranking ofinvestor relations functions, Institutional Investormagazine ranked Colgate Investor Relations firstamong all consumer goods companies.

Reporting Accurate Financial Performance DataColgate is committed to the quality, integrityand transparency of its financial reports. Thiscommitment is reflected in the Company’s long-standing policies and procedures, including aninternal audit group monitoring financial con-trols worldwide, independent auditors whohave a broad mandate and an independentAudit Committee overseeing these areas. Tomaximize the effectiveness of these resources,Colgate people are expected to engage in open and honest communication and a freeexchange of information with the internal andexternal auditors and the Audit Committee. Foradditional information regarding the importantroles of the Company’s internal auditors, inde-pendent auditors and Audit Committee, pleasesee the “Colgate-Palmolive Company AuditCommittee Charter,” which is available on theCompany’s web site.

Auditing Around the World

Global standards define performance expectationsworldwide and are used byauditors at Colgate facilities.

Welcoming Shareholder Input

Colgate welcomes input andquestions from shareholdersat the Annual Meeting heldeach May.

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Our Board of Directors

1. Reuben MarkChairman of the Board and Chief Executive OfficerDirector since 1983.

2. Jill K. ConwayIndependent Director since 1984.

3. Ronald E. FergusonIndependent Director since 1987.

4. Carlos M. GutierrezIndependent Director since 2002.

5. Ellen M. HancockIndependent Director since 1988.

6. David W. JohnsonIndependent Director since 1991.

7. Richard J. KoganIndependent Director since 1996.

8. Delano E. LewisIndependent Director from 1991 to 1999 and since 2001.

9. Elizabeth A. MonradIndependent Director since 2004.

10.Howard B. WentzIndependent Director since 1982. (Retiring May 2004)

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Colgate’s Corporate Governance Commitment

Governance is an ongoing commitment shared by our Board of Directors, our Management andall other Colgate people. At Colgate, we believe strongly that good corporate governance accom-panies and greatly aids our long-term business success. This success has been the direct result ofColgate’s key business strategies, including its focus on core product categories and global brands,people development programs emphasizing "pay for performance" and the highest business stan-dards. Colgate’s Board has been at the center of these key strategies, helping to design and imple-ment them, and seeing that they guide the Company’s operations.

Colgate’s Good Governance Principles

Our Board of Directors is independent, experienced and diverse. The Board believes that an independent director should be free of any relationship with Colgate orits senior management that may in fact or appearance impair the director’s ability to make inde-pendent judgments, and has recently adopted strict new independence standards based on thisprinciple. Since 1989, Colgate’s Board of Directors has consisted entirely of outside independentdirectors, with the exception of the CEO. As its present directors exemplify, Colgate also valuesexperience in business, education and public service fields, international experience, educationalachievement, strong moral and ethical character, and diversity.

Our Board focuses on key business priorities and leadership development. The Board plays a major role in developing Colgate’s business strategy. It reviews the Company’sstrategic plan and receives detailed briefings throughout the year on critical aspects of its imple-mentation. The Board also has extensive involvement in succession planning and people develop-ment with special focus on senior management succession.

Open communication between and among directors and management fosters effective oversight. Inside and outside the boardroom, Colgate’s directors have frequent and direct contact withColgate’s management. Key senior managers regularly join the directors during Board meetingsand more informal settings, and together they actively participate in candid discussions of variousbusiness issues. Between scheduled board meetings, directors are invited to, and often do, con-tact senior managers with questions and suggestions. Communication among the directors isenhanced by the relatively small size of Colgate’s Board, which fosters openness and active discus-sion, and by regular meetings of the independent directors without the CEO present.

Established policies guide governance and business integrity. First formalized in 1996, Colgate’s "Guidelines on Significant Corporate Governance Issues" arereviewed annually to ensure that they are state-of-the-art. Formal charters define the duties ofeach Board committee and guide their execution. Colgate’s Corporate Governance Guidelines andall Committee Charters are available on our website at www.colgate.com. Additionally, the Boardsponsors the Company’s Code of Conduct and Business Practices Guidelines, which promote thehighest ethical standards in all of the Company’s business dealings.

Our Board plays an active role overseeing the integrity of the financial statements of the Company. The Board is committed to the quality, integrity and transparency of Colgate’s financial reports. Thiscommitment is reflected in Colgate’s long-standing policies and procedures, including an internalaudit group monitoring financial controls worldwide, independent auditors who have a broadmandate, and an independent Audit Committee overseeing these areas.

Good governance is the responsibility of all Colgate people. Colgate people worldwide are committed to living our global values of Caring, Global Teamworkand Continuous Improvement in all aspects of our business. A constant dedication to good gover-nance shapes our Colgate culture and ultimately leads to good business results.

Good governance thrives from continuous improvement. The Board has established a formal procedure to evaluate its overall performance against criteriathat the Board has determined are important to its success. These criteria include financial over-sight, succession planning, compensation, corporate governance, strategic planning and Boardstructure and role. The Board reviews its performance and identifies steps to continuously improve.

Respect for Consumers

Understanding ConsumersBy better understanding consumers’ and cus-tomers’ expectations, we continuously work toinnovate and improve products, services andprocesses. Through our Consumer Affairs andConsumer Insights departments, we listen toconsumers and work to anticipate their future

needs and preferences. Since our business is con-

sumer products, our successdepends upon consumer satis-faction, trust and goodwill.We can best achieve ourobjectives and serve the needsof consumers by following aconsistent, fair and sensitiveprogram of consumer commu-nication. For that reason,Colgate has established aConsumer Affairs departmentin 31 locations around theworld to foster dialogue withconsumers. The mission ofConsumer Affairs representa-tives who answer thesephones is to:

■ Listen and learn about consumers in a professional, consistent and caring manner that exceeds their expectations so that theywill always experience satisfaction with ourproducts.

■ Bring consumer feedback to the decision-making process to help Colgate improveexisting products and develop new productsthat will meet consumer needs.The Consumer Affairs departments are

staffed with professional representatives whoare knowledgeable about Colgate-Palmoliveproducts and welcome the opportunity to hear from consumers.

Consumer opinions, concerns and inquiriescommunicated to Colgate regarding our products are important sources of information.Consumer needs are constantly changing, sowe must continually listen to what people wantand use our creativity to satisfy these changingneeds. When a consumer expresses dissatisfac-tion, we address the problem promptly, courte-ously and fairly, and make every reasonableeffort to sustain or regain the consumer’s good-will and his or her continued purchase ofColgate products.

Colgate’s Consumer Insights departmentalso works to anticipate consumer needs andpreferences in our products. This departmentworks to build a strategic knowledge basethrough market research and trend analysis.As the Company’s experts and advocates, theyare an agent of change within the Company.They work to see the future and make ittoday’s reality.

Respecting Consumer PrivacyColgate respects and honors the privacy rightsof our consumers. In consumers’ interactionswith Colgate, through requests for productinformation or participation in Company-sponsored competitions for example, con-sumers may provide personal information suchas names, street addresses and e-mail address-es, to the Company. We use such informationonly for the reasons it was supplied to us,unless a consumer consents to other uses, andas necessary for our record-keeping purposes.We adhere to local legal requirements regard-ing the protection of personal information.

Advertising ResponsiblyColgate-Palmolive manufactures and sells products that improve the lives of people allaround the world. Through our advertising, we generate awareness of our brands andcommunicate the unique value and benefits of our products to consumers. Our advertisingis also a reflection of Colgate’s reputation forreliability, dependability and trustworthiness.Therefore, our advertising content and place-ment must be sensitive to the public and itsconcerns, interests and sensibilities.

We place advertising in a variety of mediaincluding television, radio, print, Internet andoutdoor. We actively seek outlets that reflect thesensibilities of our target consumers. We lookfor media outlets that are generally positive innature, contain positive role models, and havea family orientation.

For placement on television or radio,Colgate carefully considers the content of theon-air programming. While we do not havecontrol over the scripts of any television orradio show, we exclude programs that we con-sider to be offensive, anti-social or in bad taste,or which could stimulate anti-social behaviorthrough viewer imitation. We do not advertiseon shows that contain programming thatinsults, ridicules or denigrates people becauseof their age, gender, sexual orientation, race,religion, ethnicity, physical or mental health.

To help ensure that advertising placementsstrictly adhere to this policy, we employ ascreening service to immediately alert us to pro-gramming that is overtly offensive. Programsare also scrutinized for unnecessary violent andsexual details that are not integral to the plot or story line.

Before placing our advertising in printedmedia or on the internet, we carefully considerthe same guidelines listed above with regard tocontent and context. At Colgate, consumeropinions are a critical component of thisprocess to determine appropriate advertisingplacement. Our advertising policy guidelinesare periodically reviewed and revised to ensuretheir appropriateness in fulfilling both theneeds of the Company and those of our consumers.

Listening to Consumers

Through our ConsumerAffairs and Consumer Insightsdepartments, we listen toconsumers and work toanticipate their future needsand preferences.

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Recognizing Consumer ChoicesOne of the most important ways we demon-strate caring for our consumers is by providingthem with information to help them choosethe right products to meet their specific needs.For our vegetarian consumers, Colgate offers a large selection of products free of animal-derived ingredients. With more consumersseeking such products every day, Colgate iscommitted to making it easier for consumers to identify and select these products. Uponrequest, we provide a list that includes theColgate products sold in the U.S. that currentlyare free of animal-derived ingredients, andappropriate for consumers seeking to avoidproducts containing animal ingredients. TheProduct Guide for Vegetarians is updated peri-odically to reflect any changes to ingredients in Colgate’s products. If consumers are unsureof whether a particular Colgate product isappropriate for vegetarian consumption or use,or to obtain the most updated information,they can contact Consumer Affairs or check the information for vegetarian consumers atwww.colgate.com.

Assuring Product SafetyThe safety of consumers is Colgate’s first andgreatest priority. The Company is committed to ensuring that consumers can trust Colgateproducts for their safety, quality and superiorperformance. Products sold by Colgate mustnot only meet or exceed all safety standards setby law, but also meet the Company’s own strin-gent standards. All products are subjected torigorous safety evaluations beginning early inthe product development cycle, starting withingredients, their interactions, and their effectswhen used as intended or accidentally mis-used. Colgate also participates in programs to

provide prompt assistance to consumers in caseof product tampering or misuse.

Making Quality ProductsRespect for consumers and quality go hand inhand. Colgate has established quality standardsthat define performance expectations for operations. A comprehensive quality trainingcurriculum helps drive quality improvementsthroughout the manufacturing and technologyorganizations. The programs include subjectson broad quality issues and also in highly specific areas such as engineering design andmicrobiological control.

A global quality auditing program monitorsprogress for manufacturing facilities, ware-houses, distribution centers and technologycenters. Audit teams are multifunctional, draw-ing upon experts in microbiology, cleaning andsanitization, manufacturing, product develop-ment and other areas to assess compliance.

Each manufacturing facility and technologycenter conducts an annual quality audit. Theselocal internal audits are complemented byapproximately 20 audits a year conducted by a team from Colgate’s Global Quality functionat various sites around the world. Each sitereceives a corporate evaluation approximatelyevery three years and develops a clearlydefined forward action plan. When audits areconducted, best practices are noted andshared with other facilities.

One important activity aligned with protect-ing people and assets is a mock recovery auditprogram, conducted annually in every countrywhere Colgate products are sold. This ensuresthat procedures are in place should a recall orrecovery of product be required. The mockrecovery audit also ensures that Colgate ismeeting our standards for product traceabilityand retrieval. ■

Commitment to Quality

Colgate people throughoutthe world ensure our productsmeet comprehensive qualitystandards.

Global

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Respect For Communities

By living the Company’s global values, Colgate and its people work to be contributing members of theglobal community. Especially through the value of caring expressed by local giving and volunteerism, Colgate shows its respect for the communities where the Company does business.

Respect For Communities Caring takes place in a variety of programs from promoting good health and hygiene andencouraging education for children and adults,to supporting many types of social services.

This strong commitment to social responsibil-ity is carried out by Colgate’s involvement inmany of the communities where Colgate peoplelive and work. Programs such as “Bright Smiles,Bright Futures,” “Lather Up for Good Health,”“Phelophepa,” “Operation Smile,” “ColgateYouth for America,” “Hill’s Shelter Nutrition Project,” and “Colgate’s Women’s Games” andcontributions to some 500 different charitableorganizations around the world are testamentto Colgate’s ongoing commitment to caring.

Through partnerships with nonprofit organi-zations, Colgate works to achieve mutual goalsby donating money and products, sponsoringevents, and participating on boards and com-mittees. Colgate’s support for community effortsover the past three years, including its world-wide oral health program, “Bright Smiles, BrightFutures,” has exceeded $60 million.

Global Guidelines for Community ResponsibilityColgate supports the Global Sullivan Principles, a code of corporate conduct that serves as aguide for the policies and practices of sociallyresponsible companies. The Company was amember of the steering committee and chartersignatory to the Principles, whose objectives tosupport economic, social and political justice incountries where they do business were formu-lated by the late Rev. Leon H. Sullivan in 1999.The Principles form an aspirational frameworkagainst which the internal policies and practicesof socially responsible companies can bealigned.

Oral Care Education and TreatmentIn communities around the globe, Colgate pro-vides health education and treatment to millionsof children and their families. One major initia-tive is “Bright Smiles, Bright Futures,” whichreaches more than 50 million children in 80countries every year. The multi-tiered programdelivers oral health education and treatment

Philippines United Kingdom

with emphasis on education and prevention,using a variety of materials and sample productsprovided free to schools and health educators.Materials, available in 30 languages, includevideos, storybooks, sing-along-songs and inter-active activities for educators to use in the class-room and for parents to use at home.

By establishing partnerships with govern-ments, dental professionals, education profes-sionals, schools and communities, “BrightSmiles, Bright Futures” is making a significantcontribution to the World Health Organization’sobjective to reduce dental disease in childrenworldwide.

In the U.S., the program also includesmobile dental vans, staffed by volunteer den-tists who visit local communities in urban andrural areas. These volunteer dentists conductfree dental screenings, distribute multiculturaleducational materials, and educate the childrenand their families about the importance ofmaintaining good oral health. One of the

latest elements of the program is an onlineschool curriculum featuring fun and entertain-ing activities.

In addition to “Bright Smiles, Bright Futures,”Colgate supports a number of clinics and programs encouraging good dental care andtreatment.

Handwashing HygieneAccording to health experts, proper handhygiene is one of the most effective ways to prevent disease transmission, but handwashingwith soap is far from universally practiced. Theseexperts say that there is a need to improveproper handwashing in all countries regardlessof their level of economic and social develop-ment. As a leading global marketer of bar andliquid soaps, Colgate partners with public healthleaders around the world and serves on thesteering committee of the World Bank Hand-washing Project, a global public/private partner-ship initiative to increase awareness of theimportance of proper handwashing and its critical role in saving the lives of over one millionchildren each year.

The Company’s global “Clean Hands, GoodHealth” school- and community-based educa-tional handwashing program has alreadyreached more than five million people in manycountries including Colombia, Costa Rica, El Salvador, Guatemala, Kenya, Malaysia, Panama,Romania, Senegal, South Africa, Thailand, theU.S. and Zambia.

With a goal of becoming a part of the regu-lar school curriculum, the program, patternedafter “Bright Smiles, Bright Futures,” provideseducational materials and sample products toschools and communities and includes a publicrelations and public service advertising component.

Helping Youth Grow into Productive AdultsWith many activities, Colgate helps youthdevelop a sense of personal achievement. Someprograms focus especially on girls and youngwomen. In the U.S., Colgate sponsors two ofthe longest-running corporate-sponsored eventsbenefiting American young people.

The Colgate Women’s Games, an annualtrack-and-field competition with finals at NewYork City’s Madison Square Garden, draws morethan 10,000 participants from the U.S. EastCoast each year, many who would have neverconsidered participating in an organized sport.

The Games have been a stepping-stone forfuture Olympians, but are most importantly a celebration of respect, determination and goodsportsmanship. They foster a spirit of individualachievement and self-esteem, and by requiringschool attendance to participate, they instill the importance of educational achievement.Educational grants to the winners are a furtherincentive to encourage higher educationalachievement.

Founded in 1973, Colgate Youth for Amer-ica, a community service awards program, honors local units of national youth organiza-tions for their outstanding community serviceprojects. With more than 300 winners selectedannually, Colgate has awarded nearly $6 millionto local clubs and organizations since the pro-gram began. The program has been honoredby the White House under five different adminis-

Russia South Africa

Caring for the Global Community

Children and adults allaround the world benefitfrom Colgate’s many and varied programs, supportedby contributions and volun-teerism. Illustrated above arejust a few of these: childrenlearning about oral healthcare; a young man with hiscanine assistant; a patientreceiving treatment in a Colgate-supported dentalclinic; and participants inColgate’s “Clean Hands,Good Health” handwashingprogram.

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trations, received a Freedoms FoundationAward, and has been praised by members ofCongress and governors and mayors through-out the nation.

In many communities, Colgate facilities“adopt” and partner with nearby schools, pro-viding scholarships, grant programs, summerinternships and volunteers for various activities.Colgate’s Kansas City plant in the U.S. has part-nered with students and staff at Central MiddleSchool for 15 years, providing funding, pro-gramming, ideas and other support to promoteacademic excellence. Every year, Colgate peoplein New York City mentor students at WadleighSecondary School. In this program, the studentsmay get assistance applying to college, gainexposure to the work environment or learnmore about cultural resources New York has tooffer. In Australia, the Company supports pro-grams to help those in need among the elderlyas well as the young and even constructed apark and made other improvements that pro-vide a natural setting for people who live nearthe Colgate factory.

For more than 25 years, Colgate has spon-sored Estrellas Colgate (Colgate Stars) in MexicoCity, a program that encourages character-build-ing in economically disadvantaged childrenthrough an organized track-and-field athleticprogram. In addition to gaining athletic skills,children receive nutritious meals and learn per-sonal hygiene habits. They also develop tech-niques for studying to prepare them to becomefuture leaders in their communities and gain thedetermination to succeed in whatever theyundertake. The program has been recognizedby a number of organizations including the Sec-retariat of Public Education, the Main Directorateof Physical Education, the Association of Athlet-ics of the Federal District and the MexicanOlympic Committee.

Since 1977, Colgate has built six sports parks on city-donated land in Colombia. Over700,000 children each year use the parks toplay soccer, basketball, tennis, volleyball andother sports. Sports programs at the parks aresupported by funding generated from recyclingaluminum, paper, plastics, wood and scrapmetal. The Colgate-Palmolive Foundation inColombia has also built two schools and six dental centers in needy areas.

In the Philippines, Colgate also createsopportunities in sports for young athletes indepressed provinces by building a variety ofsports facilities. Through the Colgate SportsFoundation, the Company also sponsors a 20-week track-and-field competition that attractsmore than 2,000 participants each year.

Making Dreams Come True for Seriously Ill ChildrenOver the past 13 years, Colgate has donatedover $6 million to the Starlight Children’s Foun-dation to help grant more than 1,450 wishes toseriously ill children and their families. Starlight

works with more than 1,000 hospitals in theU.S., the U.K., Australia and Canada. Fulfillingchildren’s wishes takes many forms: a family tripto an amusement park, the gift of a computer orother tangible items, a makeover or a visit with afavorite celebrity. Colgate support has also pro-vided funds for the placement in hospitals of650 “Fun Centers,” self-contained mobile enter-tainment units with a flat screen TV monitor,DVD player and Nintendo game cube, as wellas PC Pals, similarly self-contained mobile per-sonal computers offering access to the Internetand a wide array of software.

Providing Health and Dental Care in Rural South AfricaFor many people in rural South Africa who oth-erwise would have little or no medical or dentalcare, the Transnet Foundation’s PhelophepaHealthcare Train is a modern health care facilityon wheels. Colgate, along with several othermajor corporations and organizations, is afounder-sponsor of the Phelophepa train (pro-nounced pay-lo-pay-pa and meaning “goodclean health”) which for over a decade hasreached more than one million people withhealth care, counseling, eye and dental care,and education. While treatment and screeningare key objectives, prevention and education are also fundamental goals.

Patients receive important instruction on howto care for themselves including how to takeprescription medications. At every one of nearly40 yearly stops, local volunteers receive trainingin basic medical and dental issues, which theycan take to their communities.

Colgate’s participation means that some1,000 first- and second-grade students per weekare taught about oral care. Each child is given a tube of Colgate toothpaste and a toothbrushand taught how to brush correctly.

In addition, Colgate has donated dentalequipment and funding for a dental clinicwithin the train, including six fully equippedtreatment rooms, where cleaning, restorationsand extractions of teeth are performed. Thetrain is staffed by a resident dentist and post-graduate or final-year dental students. In returnfor their work, dental students gain valuablepractical experience in community dentistry in amulticultural setting as they provide an essentialservice to rural communities. The clinic is openas long as there are patients, and it is notunusual for the clinic to have as many as 90patients a day. In the more than five years sincethe dental clinic has been operating, some71,000 patients have been treated or evaluated.

Commitment to Caring in All CommunitiesWhile our global focus is on initiatives such as“Bright Smiles, Bright Futures,” and “Lather Upfor Good Health,” our caring commitment alsoextends to many local programs around theworld. Through these, Colgate is making an

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In communities around the globe, Colgate provideshealth education and treatment to millionsof children and theirfamilies. Here aresome examples.

South Africa

Supporting Oral Care Education

Since its start in 1991, Colgate’s “Bright Smiles,Bright Futures” program hasreached hundreds of millionsof children in 80 countrieswith oral health educationand treatment.

Providing Dental Care

Colgate is a major supporterof Phelophepa, a medicaland dental facility on wheelsthat reaches many people inSouth Africa who otherwisewould have no access totreatment.

China

Teaching Good Handwashing Hygiene

Colgate partners with public health leaders aroundthe world supporting a globalinitiative to increase aware-ness of the importance ofproper handwashing, espe-cially for the prevention of transmitting disease.

Guatemala

Through programs like the ColgateWomen’s Games and Estrellas Colgate, our Company helps youth and young women develop a sense of personal achievement and self-worth.

Encouraging Young Women and Girls

The annual Colgate Women’sGames, which involve more than 10,000 girls andwomen each year, are a celebration of respect, determination and goodsportsmanship.

■22

Developing Tomorrow’s Leaders

The Estrellas Colgate (Colgate Stars) track-and-fieldprogram encourages charac-ter-building in economicallydisadvantaged children. Inaddition to gaining athleticskills, children develop techniques to prepare themto become future leaders intheir communities.

United States

Mexico

Contributions toU.S. Organizations

2003: $5,497,000

2002: $5,252,000

2001: $5,327,000

■23

important difference in many communities. Ineach of the 80 countries where Colgate hasfacilities, the Company supports programs rang-ing from health initiatives to social services proj-ects to school programs for underservedchildren. Through partnerships with nonprofitorganizations, Colgate actively works to achievemutual goals focused on health, education andleadership development.

In the same spirit that the Company demon-strates caring for communities, so too do manyColgate people who generously donate theirresources and time to worthy causes. In theU.S., Colgate’s Matching Gift Program enhancesdonations from employees to community pro-grams; Colgate matches as much as double theamount of the employee donation to eligibleinstitutions. In recognition and support of impor-tant volunteer efforts by Colgate people, theCompany in 2003 established the ColgateCARES Grants Program, which gives financialassistance directly to the nonprofit organizationswhere employees donate their time. The grantsfocus on areas of community need such as education, recreation, civic and cultural affairs,health, and social welfare.

Wherever there is a need, Colgate and itspeople can be found. Colgate’s knowledgeabout pets through Hill’s makes its involvementwith “Dogs for the Disabled” in the U.K. a perfect partnership. The program provides thedisabled with specially trained dogs that cancarry out everyday tasks such as opening andclosing doors, pulling laundry out of washingmachines, and turning lights off and on.

In other markets, Hill’s supports a variety ofprograms and events related to the humanetreatment of animals. In an alliance with theHumane Society of the United States, Hill’s pro-vides Science Diet pet food for cats and dogshoused by participating shelters. Hill’s also pro-vides food to abused pets in some veterinaryhospitals and sponsors programs to supportworking K-9 units in law enforcement and otherorganizations. Through the Hill’s “Service K-9Coupon Program,” individuals with service animals are provided with an annual couponbooklet to contribute toward the purchase ofany Science Diet or Prescription Diet pet foodformula.

Active Support for Organizations Around the WorldCommunities across the globe benefit from Col-gate’s charitable contributions. The Company’sdonations go to programs that primarily focuson education, youth, women and inner cities.

In the U.S. alone, Colgate contributed morethan $5 million during each of the past threeyears to more than 150 organizations, includingmatching an additional $1.5 million donated by employees. These figures do not include Colgate’s contributions to the “Bright Smiles,Bright Futures” program. Organizations that

have benefited include schools, libraries andother programs.

In addition to the “Bright Smiles, BrightFutures” program, Colgate uses its leadershipand expertise in oral health care to give back to communities in a variety of ways, includingsupporting Dental Health Month in schools, providing scholarships for minority dental students and dentists, and supporting theNational Dental Association.

To support inner city education, people ofcolor and women, Colgate makes donations toa variety of organizations. For example, receiv-ing Colgate support in the U.S. are organiza-tions such as the United Negro College Fund,the oldest and most successful African-Americaneducation assistance organization in the coun-try; Aspira, an advocacy group that workstoward the education and leadership develop-ment of Latino youth; Catalyst, a nonprofitresearch and advisory organization working toadvance women in business; Girls Incorporated,a national nonprofit youth organization dedi-cated to inspiring girls to be “strong, smart andbold;” and the Financial Women’s Association,an organization of financial executives in busi-ness, supporting women through educationalprograms and networking opportunities as well as scholarship, mentoring and training programs.

In South Africa, community service programsare supported by the Colgate Foundation. Thisincludes support for public and private educa-tion at every level from day care to medical anddental training. The Foundation also contributesto centers caring for abandoned children withHIV+/AIDS and those who are physically andmentally challenged.

Elsewhere in Africa, as well as Latin Americaand Asia, Colgate supports Operation Smile, a not-for-profit volunteer medical services organ-ization providing reconstructive surgery andrelated health care to needy children and young adults.

In India, funds have supported the purchaseand maintenance of hearing aids for children,the Indian Cancer Society and associations thatwork with the blind. In Thailand, funds gotoward sports facilities and related activities for children.

The Company steps in when a need arises,such as during 2002 when severe floodingoccurred in eastern Germany and in 2003 whenfire destroyed a large area where disadvantagedpeople live in the Philippines. During other natural disasters, Colgate has donated cleaningproducts so that people could restore theirhomes and businesses, and Colgate peoplehave volunteered their time and helping hands.In addition, Hill’s has donated Science Diet foodto pets displaced due to wildfires in Coloradoand California.

These Colgate-supported programs are just a few of the many taking place all around theworld. ■

Contributing to U.S. Charitable Organizations

Colgate strives to exceed the minimal require-ments and we demonstrate this in our goals toimprove water use efficiency and energy effi-ciency and reduce wastewater contaminants.Additionally, our goal is to eliminate accidentalspills and releases entirely. These overall goalsare communicated to manufacturing sites andother relevant locations for implementation andintegration into business processes along withthe existing business goals that help driveColgate’s improvement initiatives.

Continuously improving Colgate’s environ-mental performance requires ongoing invest-ments. Since 1994, Colgate has devoted morethan $80 million of its capital expenditurebudget to build and improve its environmentalprotection infrastructure such as wastewatertreatment plants, air pollution controls andstorm water protection systems. For example,close to $2 million was spent to offer evengreater protection against spills where railcarsare unloaded at Colgate’s Cambridge, Ohio,plant. In Uruguay, plant improvements weremade to treat wastewater. In France, improve-ments were made to collect and evaluate storm

water, which can collect impurities as it flowsover the manufacturing site.

Different Colgate businesses and individualsites undertake various types of environmentalimprovement projects to allow each site tofocus on the area most meaningful to its com-munity and business. Goals are set globally,and all businesses, divisions and sites track andreport on three major areas: energy efficiency,water use efficiency and wastewater contami-nants. This ensures consistency and alignmentfor the Company around key environmentalindicators.

The global water and energy data includedin this section represent Colgate’s major manu-facturing sites in all geographies and accountfor approximately 95% of the Company’s globalmanufacturing production. In general, produc-tion tonnage is used as the basis for compari-son in order to account for annual variations ofproduct manufactured and shipped.

To validate this environmental performancedata, Colgate has a rigorous internal process,including periodic training to ensure consisten-cy. The Company provides global manufactur-

■24

RespectForOur Planet

For Colgate, promoting a healthy environment is an integral part of our commitment to respecting theworld around us. Colgate’s approach goes beyond simply complying with environmental regulations. Wehave made steady progress in using precious resources more efficiently, yet we acknowledge there is stillmuch to be done.

ing and R&D facilities with a common data collection and reporting system. To furtherensure the validity of the data, URS, an inde-pendent environmental consulting firm, wasfirst retained in 2001 to assess and validateColgate’s systems for collecting global environmental data. URS evaluated the data-base for all factories and visited sites account-ing for approximately 35% of Colgate’s globalmanufacturing production. Although there areno formally recognized standards for verifyingenvironmental information, the firm’s work wasorganized to obtain reasonable assurance of

the accuracy and completeness of Colgate’senvironmental data. URS concluded thatColgate has a comprehensive process for environmental data collection and cited someareas where improvements could be made.Since the assessment in 2001, Colgate hasretained URS to perform data validation on an annual basis.

Colgate’s Progress on ReducingEnvironmental Impacts

Water Use Efficiency. One of our most pre-cious natural resources, water is an integralpart of Colgate’s product formulations andmanufacturing operations. The Companystrives to use water most efficiently. From 1998to 2003, Colgate reduced the amount of waterrequired to produce a ton of product by 19%.Colgate factories around the world have undertaken numerous initiatives to increase the efficiency of water use.

For example, Colgate’s plant in Gebze,Turkïye, redesigned its storm water collectionsystem to allow for the capture and reuse of

rainwater for site irrigation, thus reducingdependence on city water and lowering flowto nearby flood-prone streams.

Changes in the manufacturing process suchas making common formulas, reducing thenumber of times cleaning the production linesis required between changeovers, and usinghigh pressure and other cleaning techniqueshave all contributed to reducing water usage.

Energy Efficiency. Over the years, Colgate peo-ple have found many ways to improve energyefficiency at manufacturing facilities, and these

efforts to conserve electricity, natural gas, fueloils and coal will continue. During the 1998 to2003 period, energy consumption per ton ofproduct for these four energy sources pur-chased by Colgate has decreased by over 9%.

Furthermore, closing some older, less effi-cient plants and consolidating manufacturingat more efficient state-of-the-art facilities hashelped reduce energy consumption as hasColgate’s shift from higher energy intensivepowder soap products to liquids, which aremore energy efficient to produce.

Wastewater. Like all companies, Colgate generates wastewater that is returned to theenvironment after any necessary treatment.Our factories focus on reducing the waste ofraw materials that go into wastewater, helpingreduce costs and improving environmental performance.

Colgate has begun an improved data collec-tion process for measuring and tracking theamount of raw materials entering our facilities’wastewater systems prior to treatment.

Meanwhile, Colgate’s efforts so far have

Protecting Our Resources

Colgate places high priorityon protecting the earth’s nat-ural resources and is continu-ing to find ways to improveprocesses for a cleaner,healthier world.

■2525

Netherlands

been acknowledged by local communities. Forexample, Colgate has been recognized for thepast four years by the Kansas Water Environ-ment Association. The group has presented theCompany’s Kansas City soap plant with awardsciting the plant’s complete and consistent com-pliance with the agency’s industrial wastewaterpretreatment requirements.

Waste. In the area of waste, efforts are beingundertaken to reuse and recycle materials inaddition to changing processes so that there isless waste generated. This is in keeping withColgate’s commitment to the hierarchy of wastemanagement, which starts with eliminatingwaste, followed by reducing and reusing

waste, then recycling waste and finally safelydisposing of the remainder.

Educating Colgate people about the bene-fits of waste reduction is also important. Theseefforts include training, improving communica-tion, and reward and recognition programs. Asa result, Colgate’s plant in Kenya has reducedthe amount of scrap and material losses byapproximately 31% for toothpaste tubes and48% for toothpaste cartons.

In Salford, U.K., an aggressive hazardouswaste reduction program has been developedto substantially reduce the amount of haz-ardous waste available for disposal.

■26

Monitoring Wastewater

Hill’s Pet Nutrition employees con-duct periodic water testing near thepet food manufacturing facility inthe Netherlands.

Using Water More Efficiently

From 1998 to 2003, we reduced the amount of water required to pro-duce a ton of product by 19%.

Water Use Efficiency

(Total water minus water in product)

m3 /

ton

of p

rod

uct

0

0.5

1.0

1.5

2.0

2.5

1998 1999 2000 2001 2002 2003

Managing Energy Consumption

In Colgate’s three manufacturing plants in Brazil, energyusage was cut by 21% in 2001 due to a concerted effortthat included everything from reducing excessive illumina-tion in conference rooms and walkways to the automationof large air compressors and chillers.

Under the U.S. Superfund Amendments andReauthorization Act (SARA), corporations mustreport annually to the Environmental ProtectionAgency (EPA) the quantity of EPA-defined toxicchemicals released into the environment.Releases are defined broadly under SARASection 313 to include the off-site transfer ofchemicals in addition to air emissions andwastewater discharges. From 1998 to 2002,Colgate’s total U.S. SARA 313 releases averagedapproximately 2.67 tons per year.

Colgate’s U.S. hazardous waste, as definedby the Resource Conservation & Recovery Act(RCRA) that was transported off-site has aver-aged 62.8 tons per year from 1998 to 2002.This is equivalent to an average of 4.5 tons per

Colgate facility per year, compared with anoverall average of 2,146 tons of hazardouswaste per facility per year among all reportinggenerators in the U.S. in 2001.

Packaging. Packaging for our products mustmeet a number of objectives including minimalenvironmental impact. For more than adecade, Colgate has placed a significant focuson eliminating excess packaging and makingpackaging materials compatible with communi-ty recycling programs. A major innovation thatColgate has helped lead has been the introduc-tion of concentrated products. With a greaterconcentration of active ingredients than tradi-tional products, these reduce the amount of

■27

Improving Energy Use Efficiency

From 1998 to 2003, energy use per ton of product has decreased by over 9%.

Energy Use Efficiency

(Energy refers to purchased electricity,natural gas, fuel oil and coal)

kWh

x 1

000/

ton

of p

rod

uct

0

0.1

0.2

0.3

0.4

0.5

1998 1999 2000 2001 2002 2003

Brazil

■28

product a consumer needs for equivalent performance. Concentrated products use lesspackaging material because they fit into small-er packages.

In North America, a 15% reduction in packaging material has been achievedbecause of the conversion to PET plastic toaccommodate community recycling programs.These environmental enhancements havebeen further supplemented by using recycledPET in the Palmolive and Ajax bottles at a 25%to 50% level, depending on the available supply in the recycled resin market.

In the past, our progress in reducing pack-aging materials has been tracked locally byColgate locations. We began collecting pack-aging data globally in 2002 and anticipateincluding packaging data in subsequentreports.

Air Emissions. Many Colgate subsidiaries havecollected energy and other air emissions datain compliance with local regulatory require-ments for several years. In 2002, we began to collect more detailed energy and fuel sourcedata that will allow us to provide carbon dioxide (CO2) information for our global manu-facturing sites. This information will also beincluded in subsequent reports.

Climate ChangeThe most significant greenhouse gas emissionassociated with Colgate’s manufacturing opera-tions is CO2. This comes from the production ofsteam and hot water using fuel oil and naturalgas and from the use of electricity purchasedfrom the local electric utilities. Colgate hasimproved energy efficiency by over 9% from1998 to 2003. As a result of this improvement,CO2 emissions per ton of product producedalso declined.

Colgate has not taken a formal position onthe issue of climate change or the associatedpoints of view expressed by the scientific community, governments and environmentalactivists. Colgate believes its role in this issue is to operate factories as efficiently as possiblein a manner that will result in benefits to theenvironment and to the business.

Complying with RegulationsOverall, Colgate has a strong record of meeting legal requirements everywhere theCompany does business. Occasionally, situa-tions arise in which government inspectorsdetermine that improvements should be made.The table at right summarizes reported U.S.information for 1998 to 2002.

Corrective actions are taken when an eventdoes not comply with regulations. When anincident does occur, Colgate has establishedreporting procedures to inform senior manage-ment and other appropriate officials within 24hours. Furthermore, Colgate uses these experi-ences to improve practices and takes advan-

United States

Redesigned caps to use 30% less plastic.

Colgate continues to reducethe amount of material inpackaging around the globe.

China

Redesigned to use21% less plastic.

Europe


Mexico


tage of all communication tools for educationalpurposes, including an Environmental,Occupational Health & Safety (EOHS) websiteand periodic meetings of the EOHS teams in all regions. Other activities are conductedthroughout the year to raise awareness of theimportance of a clean environment among allemployees. For example, in November 2002,Colgate Mexico organized Environment Weekinvolving seminars, exhibits and best practices,and for the fourth consecutive year, ColgateMexico was recognized as “Clean IndustryCertified” from Mexico’s Federal Attorney forEnvironmental Protection.

Conducting Environmental, Occupational Health & Safety AuditsColgate’s EOHS policy standards define per-formance expectations for all worldwide opera-tions. These standards consist of extensive tech-nical components and also require an activeEOHS management system at each site.Colgate conducts training on the standards,assigns an individual at each location to beresponsible for EOHS, and audits Companyfacilities against compliance with local regula-tions as well as Colgate standards.

The training programs include technicalcourses on a broad spectrum of safety andenvironmental subjects as well as more target-ed training on specific issues such as enzymesand ergonomics.

Colgate maintains an active worldwideEOHS audit program consisting of approxi-mately 20 to 25 audits a year for manufactur-ing facilities, technology centers, sales andadministrative offices, and other facilitiesdeemed appropriate. Starting with environ-mental audits in 1991, Colgate has expandedthe audit program to include OH&S audits andchlorine absorption audits. Audits also identifyrisks, hazards, unsafe behaviors and opportuni-ties to improve.

Each site is evaluated by global inspectorsapproximately every three years. The programis run under the direction of the corporatelegal department and corporate EOHS. Auditsare staffed by Colgate EOHS professionals fromlocations independent of the site being audit-ed. Each audit typically involves a team of fourto six auditors. The audit includes an assess-ment of management systems; a review ofrecords; observation of physical conditions,equipment and personnel; and interviews with

workers at all levels throughout the facility.Reports are issued in approximately six weeks,and facilities develop a follow-up action planwithin 30 days of receiving the report.

Periodically, an independent review of theaudit program is conducted. In the most recentreview, conducted in 2000 by EnvironmentalResources Management, Inc., an independentconsulting firm, Colgate’s audit program wasfound to be generally consistent with estab-lished criteria and in some cases exceededexpectations.

Concern for Animal Welfare Colgate’s goal is to meet safety requirementswhenever possible through the use of existingdata or tests that don’t put humans or animalsat risk. Today at Colgate, animal testing is limit-ed and conducted only after all other optionshave been exhausted. More than 98% of allinternal requests for product safety substantia-tion are met using non-animal alternatives andavailable databases. In 1999, Colgate declareda voluntary moratorium on all animal testing of Personal Care Products designed for adults.

For other product categories, there are conditions and regulations in some countrieswhich require that animal testing be conduct-ed to establish that a product is safe and todetermine labeling instructions as a conditionof sale. Additionally, there are circumstanceswhere safety demonstrations are necessary andno scientifically recognized alternative to animaltesting exists. Except for our pet nutrition test-ing, all required animal testing is conducted atoutside laboratories under Colgate supervisionusing a minimum number of animals.

Since 1982, Colgate has undertaken abroad program dedicated to advancing scientif-ically acceptable and properly validated alterna-tives. This is designed to eliminate the need tocarry out any research with animals. Colgate isworking with other companies, governmentsand associations that share the same goal ofcompletely eliminating animal testing. As partof Colgate’s commitment to this goal, theCompany also brings scientifically valid alterna-tives to the attention of government regulatorsto urge their acceptance.

At Hill’s, we’ve built a reputation as a com-pany with the highest ethical standards. Ourmission is to help enrich and lengthen the special relationships between people and theirpets. We believe that good science and com-passionate animal care are inseparable. We donot tolerate the inhumane treatment of dogsand cats for any reason. Therefore, all studiessupported by Hill’s must comply with policies toensure exceptional and humane animal care.Animal studies, whether conducted at the Hill’sNutrition Center or at external facilities such asveterinary schools or universities, are governedby rules to ensure dogs and cats are treatedethically. Our full animal welfare policy is acces-sible at www.hillspet.com. ■

■29

1998 1999 2000 2001 2002

Number of Environmental Noticesof Violations (U.S. Facilities) 3 3 2 7 5

Fines Paid $1,800 $39,500 $0 $5,000 $0

Tracking Our Environmental Records

The majority of the Noticesof Violations (NOVs) werefor minor wastewater issues.The penalty paid in 1999was for two NOVs at thesame facility. They wereadministrative in nature anddid not have any environ-mental impact. The situationhas been corrected and hasnot recurred in subsequentyears.

■30

Respect For Tomorrow

Colgate has built a strong foundation and laidthe framework for the future, following asound strategy designed to sustain profitablegrowth for many years to come. In the spirit of continuous improvement, we are dedicatedto do what we do — better, smarter and faster— to make a brighter future for all peopletouched by the Company, including employeesand their families, business partners, communi-ties, customers, shareholders and other stakeholders.

Our values of Caring, Global Teamwork andContinuous Improvement are well developedas demonstrated by examples in this report.While continuing to embrace them, we seegreat opportunity going forward.

We are continuing to expand our globalintegration software SAP, to increase businesseffectiveness and business success. Throughthese initiatives, we will achieve even higherlevels of productivity and performance andgenerate more information that can be used to identify and analyze improvementopportunities.

We will continue to look for opportunities

to grow Colgate’s business by excelling in areaswhere we already do business and also wherelogical, synergistic expansion opportunitiesexist. At the same time, we will continue todrive for excellence through innovation andexecution.

Often when corporations pursue innovationit is assumed they are referring only to newproducts. At Colgate we think innovation ismuch more. We seek to create a culture whereColgate people around the world have free-dom to innovate in whatever they do. We arestriving to weave this “innovation culture” intothe entire fabric of the Company.

Respect For PeopleColgate is committed to continuously improv-ing our programs to respect Colgate people,shareholders, consumers and other stakehold-ers. We recognize that there is always room forimprovement in any endeavor.

Colgate People. As we aim to get better everyday in everything we do, we are committed tomaking the workplace somewhere people

In this first Global Values Report, we have assembled information demonstrating the Company’s financialachievements as well as progress in protecting the environment and the health and safety of employees,customers and the communities where we live and work. Yet we know that there is still much to be done,and the Company is committed to continuously improving its performance.

know they are respected and valued. We willensure that all Colgate people, regardless ofwhere they are in the world, earn wages thatwill allow them to meet their basic needs.

We understand the advantages of a multi-cultural workplace, and we will continue ourefforts to create an environment where diversityis valued. As a global company, Colgate willcontinue to provide equal opportunities foreveryone everywhere, within widely diversecultural contexts.

We will continue to focus resources and

efforts on education and expand trainingbecause these endeavors enhance and deve-lop Colgate people, while meeting the ever-expanding needs of the Company. In the areaof employee safety, we remain committed to a“goal of zero”— zero fatalities, zero life-alteringevents, and zero lost workday and recordableincidents — and we continue to expand programs to address this important issue.

We continue to expand programs that keepColgate people and their families healthy. Forexample, we are committed to initiating pro-grams in Asia to help prevent the spread ofHIV+/AIDS and offer treatment similar to whatColgate has established in Africa.

Shareholders. Colgate recognizes its responsi-bility to those who invest in the Company andwill continue to focus on profitable growth inorder to provide a good return to shareholders.We believe, as many others do, companies thatvalue people (employees and communities),our planet (the environment) and performance(sound financial results), will be successful inserving shareholders well in the long term.

We encourage shareholders and otherstakeholders to raise important issues so thatwe can address them. As we have in the past,we will also continue to meet with nongovern-mental organizations and advocacy groups on issues of importance. We recognize theirexpertise and are open to a productive dia-logue that can and has affected our businesspositively.

With the knowledge and full support of theColgate Board of Directors, the Company willcontinue to keep its focus on corporate gover-

nance and ethics. We have a global Code ofConduct that addresses the role of the Board of Directors, the role of internal and externalauditors, and the criticality of reporting any suspected financial improprieties. Meanwhile,efforts will be made to ensure that all suppliersand contractors adhere to the Code ofConduct, which sets the standards of ethics forthe way Colgate does business around theworld. We will continue to look for new waysto implement compliance initiatives at our ownfacilities and to ensure compliance by our busi-ness partners, suppliers and other contractors.

Consumers. At Colgate, we are extremelyproud of the high quality, consistently superiorproducts we produce. Our commitment toquality is vital to all we do. Committed to mar-keting products that offer excellent perform-ance and meet or exceed all safety standards,Colgate will continue to take all precautions to preserve the trust consumers have in theCompany and its products. While we continueto anticipate consumer needs and preferences,we will also continue to value consumer con-

■31

■32

cerns and listen to them carefully. This is thebest way to benefit our consumers, sharehold-ers, Colgate people and the communities inwhich we operate.

Respect For CommunitiesColgate remains strongly committed to givingback to the communities where Colgate peopleand partners work and live, and where theCompany sells its products. In addition to con-tinuing to contribute corporate resources, wewill continue to encourage Colgate people todonate and volunteer their time helping others.Our primary focus will remain on working withorganizations that improve, enhance and servethe educational needs of youth, women andpeople of color. We will continue listening toconsumers and other stakeholders to under-stand how to become the best global citizenwe can be.

We are proud of our work in improving theoral education, dental health and handwash-ing practices of millions of people everywherebecause good hygiene and dental care lead togood medical care, which in turn plays a rolein building self-esteem and strong communi-ties. We know that many more people stillneed to be reached, and we will continuouslyexpand these strong programs.

We also know that sports programs not onlyproduce fine athletes but also can encourageeducation and character-building, the reasonfor our interest and continuing support.

We believe one of the responsibilities of aglobal company such as Colgate is the ability totransfer know-how, capital and best practicesto developing countries. Colgate prides itself onthe broad geographic reach of the Company’sbusiness and is committed to furthering thepositive aspects associated with globalization bymaking sure Colgate’s resources contribute tothe economic development of communitieswhere we do business. This includes makingproducts available at an affordable cost, creat-ing jobs where possible, improving educationand skills training, and making charitable contri-butions locally.

Respect For Our PlanetAs part of our ongoing commitment to respect-ing the environment, Colgate plans to refineand communicate global environmental goalsto address key areas. Additionally, we willreport on the following:■ Significant spills & accidental releases, if any■ Packaging reductions■ Water use efficiency■ Energy use efficiency■ Wastewater contaminants and treatment

Every Colgate operation will establish targets to do its part in contributing toward meetingglobal goals. To take into account theCompany’s business growth over time, the environmental data will be normalized by

production tonnage. We will focus primarily onincreasing our efficiency in water use and ener-gy use, work toward reducing wastewater con-tamination, and increase our efforts in reducingthe amount of material used in packaging ourproducts. At the same time, we will look foropportunities in other areas of our business todevelop new ways of doing things that areenvironmentally sound.

To be able to assess progress, Colgate will record information on releases into the environment (air, water and land) as we aim to decrease the overall impact per ton of prod-uct produced. As to climate change, eventhough Colgate’s emissions are negligible, theCompany recognizes that this important issuemust be addressed.

In the area of animal testing, Colgate continues to work with industry groups andwith governments and outside organizations to find alternatives so that animal testing can be eliminated.

Respect For TomorrowThis report is just the beginning of Colgate’slong-term efforts to communicate our commit-ment to corporate social responsibility. To meas-ure progress, Colgate will refine its data collec-tion and systems to facilitate reporting informa-tion important to our stakeholders. We willexpand our audit programs and periodicallyreport on the results. We will continue tobenchmark against peer companies to gatherbest practices on sustainability efforts and wewill work to establish key performance indica-tors in relevant areas. Our goal is to continueto expand tracking and reporting on social andenvironmental indicators to demonstrate ourcommitment to good corporate citizenship.

Through leadership and innovation, Colgatewill both grow its business and become aneven better corporate citizen. From a businessperspective, we will continue to lead in areaswe believe are important, including growingmarket share and the markets in which wecompete. To assure that Colgate can benefitfrom individuals with superior leadership abili-ties, we will focus on leadership training includ-ing systems involving people development andorganizational approaches that encourage andshape future leaders. Our strong commitmentto the environment and social well-being for all people will become more evident day byday as we put into place programs that reflectthe value we place on diversity in its broadestsense, not only race and gender, but also background and culture. With these aspirationsand initiatives, Colgate will achieve its goal ofbeing the best truly global consumer productscompany.

We welcome your comments and suggestions.Feel free to contact us using the information on the inside of the back cover. ■

KenyaVietnam

■

■

■

■

■

We show our respect for each other, shareholders, consumers, customers and suppliers in all that we do. Our initiatives and policies reinforce our commitment to these important stakeholders.

Upholding our global value of caring, we support community programs ranging from promoting good health and hygiene to encouraging education for children and adults.

For Colgate, respecting the environment is an integral part of respecting the world around us. We have made steady progress in using precious resources more efficiently, yet we acknowledge there is still much to be done.

Colgate strives to fulfill its responsibilities to people, communities and our planet as a member of the global community. We recognize that we must continuously improve our efforts.

Colgate’s World of RespectRespect is the cornerstone of Colgate’s global success. As a $9.9 billion consumer products company, we serve people around the world with well-known brands that make their lives healthier and more enjoyable. Wherever we do business, we work with respect for each other, our business partners, our environment, communities and otherinterested stakeholders. page 2

Respect For People page 6

Respect For Communities page 18

Respect For Our Planet page 24

Respect For Tomorrow page 30

Contact Information





■ Advertising Placement Policy Statement■ Annual Report ■ Annual Report of Laboratory Research

with Animals ■ Colgate’s “Best Place To Work” Program■ The Colgate-Palmolive Code of Conduct■ The Colgate-Palmolive Environmental,


■ The Colgate-Palmolive Product Safety Research Policy Statement

■ The Colgate-Palmolive Quality Policy Statement

■ The Colgate-Palmolive Product Guide for Vegetarians

■ Colgate Women’s Games Programs■ Colgate’s Youth for America Community

Service Competition■ The Chairman’s “You Can Make A Difference”


© 2004 Colgate-Palmolive Company


www.rwidesign.com



300 Park Avenue New York, NY 10022-7499

Contact Information





■Advertising Placement Policy Statement■Annual Report ■Annual Report of Laboratory Research

with Animals ■Colgate’s “Best Place To Work” Program■The Colgate-Palmolive Code of Conduct■The Colgate-Palmolive Environmental,


■The Colgate-Palmolive Product Safety Research Policy Statement

■The Colgate-Palmolive Quality Policy Statement

■The Colgate-Palmolive Product Guide for Vegetarians

■Colgate Women’s Games Programs■Colgate’s Youth for America Community

Service Competition■The Chairman’s “You Can Make A Difference”


©2004 Colgate-Palmolive Company


www.rwidesign.com


Colgate:Respecting TheWorld Around Us


colgate: respecting the world around us

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