Colgate-Palmolive’s latest earnings show that it is delivering steady financial performance while adapting to a changing global economy. Beyond the numbers, the results also point to how the company is preparing for a lower-carbon future. This opens the door for a closer look at its net-zero goals, emissions cuts, and long-term climate strategy.
Earnings Snapshot: What the Numbers Say
Colgate‑Palmolive reported its fourth quarter and full-year 2025 results on January 30, 2026. Q4 adjusted earnings were $0.95 per share, above the $0.91 expected. Net sales reached $5.23 billion, up 5.8% from last year. Organic sales rose 2.2%, showing steady growth in oral care and pet nutrition.
For the full year, net sales were about $20.38 billion, up 1.4% from 2024. GAAP diluted EPS was $2.63, while base business EPS grew 3% to $3.69. Gross profit margins stayed above 60%. Operating cash flow hit $4.2 billion, and free cash flow before dividends was about $3.6 billion. The company returned roughly $2.9 billion to shareholders through dividends and share buybacks.
Management expects 2–6% net sales growth in 2026, despite consumer spending pressures. These results show Colgate’s core businesses remain strong while supporting its long-term climate strategy. Following the results, Colgate’s stock price rose sharply, reflecting positive investor reaction.
These financial results are a great way to see how Colgate balances its business performance with its long-term climate strategy.
The Road to Net Zero: Colgate’s Climate Blueprint
Colgate-Palmolive has a detailed climate strategy that guides how it plans to reduce emissions and reach net zero. The company’s climate plan follows the Science Based Targets initiative (SBTi) Net Zero Carbon Standard. This ensures that its emissions targets align with limiting global warming to 1.5 °C above pre-industrial levels.
Colgate’s long-term goal is to achieve net-zero carbon emissions across its full value chain by 2040. This means the company aims to reduce emissions as much as possible and balance any remaining emissions with removals by that year.
The company’s climate commitment covers a broad range of emission sources, including:
- Scope 1: Direct emissions from fuels and combustion sources under the company’s control.
- Scope 2: Indirect emissions from purchased electricity for operations.
- Scope 3: Upstream emissions such as purchased goods and services, capital goods, logistics, business travel, employee commuting, and leased assets. The strategy excludes only certain optional Scope 3 categories per the SBTi Net Zero Standard.
Targets That Matter: From 2025 to 2040
Colgate aims to reduce emissions with targets for both the near term (2025 and 2030) and a long-term net-zero plan.
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By 2025:
- Reduce Scope 1 and 2 GHG emissions in operations by 20% versus a 2020 baseline.
- Reduce Scope 3 emissions from purchased goods and services by 20% versus a 2020 baseline.
- Reduce GHG emissions from consumer use of products by 20% versus a 2016 baseline.
- Reduce manufacturing energy intensity by 25% versus a 2010 baseline.
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By 2030:
- Reach 100% renewable electricity across global operations.
- Reduce Scope 1 and 2 emissions by 42% versus 2020 levels.
- Reduce Scope 3 emissions from purchased goods and services by 42% versus 2020 levels.
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By 2040:
- Achieve Net Zero carbon emissions across Scope 1, Scope 2, and most Scope 3 categories.
- Reduce Scope 1, Scope 2, and Scope 3 emissions* by 90% from a 2020 baseline (*excludes certain Scope 3 categories per SBTi Net Zero Standard).
Colgate’s climate plan breaks down the net-zero effort into key areas: product design, manufacturing, logistics, and business operations. This way, responsibility is shared among teams.
In addition to targets, the plan highlights the distribution of Colgate’s carbon footprint based on its 2024 Scope 1, Scope 2, and Scope 3 data. Most of the footprint comes from using and disposing of products, followed by supplier sourcing. This shows how important it is to involve suppliers and customers in cutting emissions.
These numbers and goals show that Colgate has set measurable, science-based climate targets and continues to develop strategies to reach them. The consumer giant aligns its climate strategy with well-known frameworks like the Task Force on Climate-related Financial Disclosures (TCFD). This adds transparency to how it evaluates climate risks and opportunities.
Where Emissions Come From, and Why It Matters
Colgate has taken steps toward achieving its emissions goals. The company is focusing on all areas, operations, factories, warehouses, and offices, to cut energy use and lower supply chain emissions.
Renewable Electricity and Energy Projects
Colgate plans to reach 100% renewable electricity by 2030. It has started investing in renewable energy projects, including virtual power purchase agreements for wind energy in Europe. These agreements are expected to meet a large part of the region’s electricity needs. This change helps lower emissions from power used at factory sites and main offices.
Supply Chain Engagement
Colgate recognizes that most of its emissions come from its supply chain and purchased goods. The company engages with suppliers to reduce emissions, improve energy efficiency, and support the use of low-carbon materials and processes. This includes encouraging suppliers to set their own science-based climate targets.
Operational Reductions
The consumer product firm aims to reduce energy use and emissions by 2025 and 2030. It seeks to cut energy intensity at factories and lower emissions from purchased goods. The company also reports progress against these goals in annual sustainability reports.
So far, the consumer giant has achieved the following milestones in tackling its climate footprint:
Beyond Carbon: Packaging, Plastics, and Water
Colgate also addresses environmental impacts beyond carbon emissions. The company has clear goals for packaging and resource use:
- Transition all plastic packaging to recyclable, reusable, or compostable materials by 2025.
- Improve water stewardship and reduce waste in operations.
- Achieve zero-waste operations at all manufacturing sites.
- Target net zero water impact at water-stressed sites by 2025 and across all sites by 2030.
By the end of 2024, about 93% of Colgate’s packaging was recyclable, reusable, or compostable. The company now uses recyclable toothpaste tubes in over 70 countries. It has also boosted the share of sustainable tubes in key markets.
For instance, Colgate’s recyclable toothpaste tubes help reduce carbon emissions by lowering the need for new raw materials and cutting manufacturing energy use. The company estimates that each tube’s carbon footprint is reduced by up to 26% compared with traditional multi-layer tubes. 
Source: Colgate-Palmolive
This change decreases emissions from production and also supports Colgate’s broader goal of reducing Scope 3 emissions from product use and end-of-life disposal. These steps aim to reduce environmental impact not just from carbon, but from waste and resource use throughout the product life cycle.
Colgate’s Climate Actions Going Forward
Colgate’s climate goals are part of a broader strategy that links environmental sustainability with business performance. The company’s net-zero by 2040 goal shows a long-term focus on reducing emissions across its entire value chain.
Progress follows science-based benchmarks. The company updates its targets to align with changing climate science standards. Colgate faces challenges with indirect emissions from suppliers and products. Still, its targets and actions show a clear path for future reductions.
The sustainability strategy also helps with other goals. These include waste reduction, water conservation, and better packaging. In these areas, measurable progress boosts Colgate’s environmental profile. For example, high recyclable packaging rates play a key role.
Investors, customers, and community partners are increasingly watching how companies like Colgate balance growth with climate action. Colgate’s earnings and environmental efforts show how it stays competitive and supports its long-term climate goals.
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Insetting program design starts with your supplier map. The carbon claim comes much later.
Consider a coffee procurement team that funds a farm intervention before checking its sourcing data. The supplier aggregates coffee lots from several regions. The buyer lacks farm-level traceability. Another purchaser expects to report the same outcome. A more attractive project brochure solves none of these problems.
If the distinction between a value-chain intervention and a purchased credit is still open, read CCC’s Insetting vs Offsetting guide before you set the brief.
Insetting program design begins with the purchasing relationship and works outward. You need to decide 1) where an intervention belongs, 2) what business problem it addresses, 3) who pays for it, 4) how results will be measured, and 5) what the evidence will let you say about them. This five-step playbook turns that sequence into a procurement plan.
Step 1: Insetting program design starts with supplier mapping
Start with the commodities that matter most to your Scope 3 inventory and sourcing continuity. Ask finance for spend by supplier, sustainability for the emissions baseline, and category managers for origin and volume records. Then identify which suppliers can trace material to a jurisdiction, sourcing region, producer group, or individual land-management unit.
The level of traceability affects what you can account for. Under the GHG Protocol Land Sector and Removals Standard, the spatial boundary for purchased land-based products depends on the traceability associated with each volume. Farm-specific factors or removals require physical traceability through an acceptable chain-of-custody model. A contract with a tier-one trader, by itself, does not establish a link to the farms behind its deliveries.[1]
Build a first-pass table with five columns: commodity and annual volume; supplier and origin; current traceability level; land-use and production risks; and the business owner who can change the purchasing terms. Mark missing data plainly. A blank cell is cheaper to fix before a program starts than after a claim is drafted.
If your company sets an SBTi Forest, Land and Agriculture target (FLAG), keep its land-related target boundary separate from energy and industry emissions. The current FLAG guidance also requires relevant companies to assess primary deforestation-linked commodities in their value chains.[2]
Step 2: Choose a commodity and jurisdiction for a pilot
Select one supply corridor where the sourcing connection can be established and procurement has a reason to stay. A useful pilot has repeat purchases, suppliers willing to share records, an intervention matched to a diagnosed problem, and a defined plan to measure the result. Carbon potential alone is a poor selection rule if the supplier cannot deliver the crop your business needs.
Compare candidate regions on land-use risk, supplier concentration, local rights and tenure, the availability of baseline data, and exposure to drought, erosion, or forest conversion. Check the relevant legal requirements separately. A nature project does not satisfy a due-diligence obligation merely because it has a carbon method attached.
Consider a coffee buyer sourcing from two districts. In the first, producer-group records identify the farms, while recent dry seasons have increased rejected green coffee lots. In the second, deliveries pass through several intermediaries and farm origins are unknown. Pilot shade management in the first district, with local agronomic advice and quality checks built into the plan. The buyer can trace purchases there and test the intervention against a defined sourcing problem.
Use a short decision memo to record why the selected corridor beats the alternatives, what remains uncertain, and what would stop the pilot. That memo is the first control against a project drifting toward whatever happens to photograph well.
Step 3: Design the supplier engagement and commercial model
The intervention needs an owner on each side of the contract. Decide who supplies planting material or training, who maintains the practice, who bears the cost if a harvest disappoints, and how long the buyer expects to purchase from participating suppliers. Where smallholders participate, budget cash flow and technical support for practices that offer a later return.
Put these terms in a supplier agreement or pilot addendum. It should cover eligible farms and volumes, consent to data collection, access for monitoring, any land or carbon rights that matter, benefit sharing, and what happens if the purchasing relationship ends. Ask local counsel and producer representatives to review the arrangement. The Accountability Framework is a useful reference for supply-chain work involving forests, ecosystems, and human rights.[3]
Avoid assigning an automatic carbon benefit to the buyer. The contract should say which party has the right to report each outcome, how overlapping claims will be checked, and how any issued credits will be handled. A reduction reported in a buyer’s inventory cannot simply be sold for someone else’s offset claim without an accounting review. SBTi FLAG guidance excludes purchased credits used as offsets from near-term FLAG target achievement.[2]
Set commercial measures beside environmental ones: delivered volume, rejection rate, supplier retention, and procurement cost. They tell you whether the program works as a supply-chain investment, even if carbon accounting takes longer to resolve.
Step 4: Build monitoring, reporting, and verification before rollout
Agree on the baseline and data flow before paying for a full rollout. Identify the land units or sourcing regions in scope, the practices that change, the records suppliers already keep, and the additional measurements the program requires. Decide which data can come from field visits, transaction records, or remote sensing, and who checks each source.
For carbon, separate three questions. Did the practice happen? Did emissions or removals change under an applicable method? Can the buyer attribute a defensible share to its purchased goods without double counting? The GHG Protocol’s 2026 guidance includes dedicated chapters on spatial boundaries, data and methods, evaluating actions, credited outcomes, and assurance.[1] These are distinct jobs. A photograph of a planted tree answers only part of the first.
CCC’s MRV and Additionality article explains the separate evidence questions a project reviewer will ask.
Create an evidence file for every reporting period: dated supplier and farm records, purchase volumes, methods and emission factors, uncertainty, quality checks, and changes from the baseline. Specify who can challenge the data and how corrections are recorded. If a project also seeks credit certification, keep project accounting and corporate inventory accounting separate. The GHG Protocol says its land standard focuses on entity-level inventories and does not set the rules for credit certification.[4]
Start with the minimum viable measurement design that can survive review. Add complexity when the pilot tells you which data actually changes a decision.
Step 5: Decide what can be reported and claimed
Insetting program design needs reporting rules before the marketing copy. Procurement, sustainability, finance, and legal should agree on four distinct outputs: operational performance; observed land or nature outcomes; inventory effects, if the accounting criteria are met; and any separately issued credits. One dashboard can display them, but they should not share a single unqualified headline.
SBTi FLAG guidance allows certain land-based removals within a company’s operations or supply chain to contribute to FLAG pathways, subject to criteria including permanence, traceability, data quality, and allocation. It does not allow purchased offsets to meet near-term FLAG targets.[2] Eligibility therefore depends on evidence and the applicable target rules, not on calling an activity “insetting.”
Draft a claims register. For each proposed sentence, record the period, boundary, data owner, calculation method, reviewer, and whether the result is measured, estimated, or still a goal. If the evidence supports only “we funded a pilot with 200 farms,” say that. Do not turn a funding fact into a verified emissions reduction.
What good looks like by year three
Treat year three as a review point, not a promised payback date. A mature pilot should have mapped participating supply volumes, a stable supplier agreement, a repeatable data collection process, and a comparison of commercial and environmental results against the baseline. It should also have a documented answer for outcomes that cannot be included in the buyer’s inventory.
Scale only where the pilot improves a sourcing decision and the evidence can follow the product. If neither condition holds, redesign the intervention or change the corridor. A disciplined program can conclude that a site is unsuitable. That is useful procurement intelligence.
Discuss your insetting program with CCC
Carbon Credit Capital designs nature-based supply chain investments around sourcing needs and measurable sustainability outcomes. Schedule a consultation with our carbon and sustainability experts to map your tier-one supplier network, FLAG exposure, and first pilot decision.
Sources
[1] GHG Protocol, Land Sector and Removals Standard, version 1.1, and companion Guidance, June 2026: https://ghgprotocol.org/land-sector-and-removals-standard ; https://ghgprotocol.org/land-sector-and-removals-guidance
[2] Science Based Targets initiative, Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, especially pp. 16–17, 37, and 41: https://sciencebasedtargets.org/resources/files/SBTiFLAGGuidance.pdf
[3] Accountability Framework initiative, Accountability Framework and guidance for companies: https://accountability-framework.org/
[4] GHG Protocol, Frequently Asked Questions: Land Sector and Removals Standard, questions 10 and 18: https://ghgprotocol.org/blog/frequently-asked-questions-land-sector-and-removals-lsr-standard
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.