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Feb 21, 2011 Cynthia Figge

The Virtuous Circle is Alive at Clorox

By Cynthia Figge

Unfortunately, there's no playbook for the 3521478254_f412afbb10_zsuccessful corporate merger of sustainability, growth and employee engagement. But there are living examples to help C-level executives navigate corporate sustainability.

Speaking at the recent GreenBiz Forum in San Francisco, Don Knauss, CEO of Clorox, explained how Clorox's 2007 introduction of its Green Works line successfully merged the three. Clorox wanted to grow into the green area and its employees became really engaged in the process. The line quickly grew to $100 million in sales in one year – although sales dropped in the recession to follow. The repositioning of Brita and acquisition of Burt’s Bees also contributed to growth, and enhanced Clorox’s reputation for producing sustainable products.

Clorox’s ethnographic research found that consumers want to get chemicals away from their kids and out  of the home (and then secondarily the planet). In addition to the movement toward sustainable products, Clorox committed to four goals: reduce production of solid waste, and reduce use of carbon, energy and water. These goals are now part of the Clorox executive scorecard and how executives are compensated, and part of its Board obligations.

2447600053_b9a5e4a23b Knauss seemed pleased that this push on water, energy and carbon reductions may save Clorox $25 million per year. He stressed that consumer product executives must get out of their comfort zone and talk and listen to people they wouldn’t normally. For example, Don asked Carl Pope at the Sierra Club to put the Green Works products through a rigorous testing program. Clorox also worked with Greenpeace to move their bleach plants away from chlorine—a transition they began 18 months ago. Because they are making these initiatives part of their incentive systems, Knauss says “Sustainability is becoming part of the DNA.”

I also noted last week that Clorox has become the first in its industry to offer expanded disclosure on the ingredients found in its cleaning products.  This disclosure includes information on preservatives, dyes and fragrances. As part of their Ingredients Inside program, the company publishes this information for customers on its corporate social responsibility website.

I was anxious to compare the Clorox rating on CSRHUB with the one on GoodGuide. CSRHUB rates broad performance at the corporate level, while GoodGuide provides a corporate number and also detailed ratings at the product level.  The CSRHUB rating is just average on Clorox (50), with a fairly low rating of 41 (on a scale of 0-100) for transparency in reporting. This may be because Clorox only published their first CSR report several months ago. However, Clorox does get a 65 for its Board subcategory score, which may reflect the fact that they have ten independent board members, of whom three are women and two are Latino. Also, of the CEO’s seven direct reports, three are women.

GoodGuide rates 349 of Clorox products.  Within these, the top ratings go to Burt’s Bees and Green Works products and the lowest ratings go to Liquid Plumr Foaming Pipe Snake Clog Remover and several disinfecting sprays scoring around 5 (on a 10 point scale).

Many in the sustainability area may be surprised to see these ratings and to hear Clorox’s CEO talking so passionately about making his company more sustainable. Congratulations to Don Knauss for his leadership, and to Clorox for publishing its first CSR report, going public with its ingredients list, and planning to improve another chunk of its product line to improve the health and environmental benefits. This is truly the virtuous circle at work.

Cynthia Figge, Cofounder and COO of CSRHUB is a forerunner and thought leader in the corporate sustainability movement. In 1996 she co-founded EKOS International, one of the first consultancies integrating sustainability and corporate strategy. Cynthia has worked with major organizations including BNSF, Boeing, Coca-Cola, Dow Jones, and REI to help craft sustainability strategy integrated with business. She was an Officer of LIN Broadcasting/McCaw Cellular leading new services development, and started a new “Greenfield” mill with Weyerhaeuser. She serves as Advisor to media and technology companies, and served as President of the Board of Sustainable Seattle. Cynthia has an MBA from Harvard Business School. Cynthia is based in the Seattle area.

Inset Photo: mag3737

Published by Cynthia Figge February 21, 2011