Clorox Co. has set new goals to cut plastic in its products, lower emissions and avoid animal testing, which it says will be tied to the compensation of the company’s chairman and chief executive.
Clorox’s CLX, -2.77% decision to tie executive pay to sustainability goals follows in the footsteps of oil companies Royal Dutch Shell PLC RDS.A, -2.96% RDS.B, -3.80% and BP PLC BP, -3.17% . Clorox declined to provide further details on the compensation terms, but said “elements” of reaching the goals can result in bonuses to the executives.
The U.S. household goods company, known for its bleach and other cleaning supplies, said Wednesday that it would make all packaging 100% recyclable, reusable or compostable by 2025 and reduce half of the virgin plastic in its packaging by 2030. Clorox reported that 92% of its packaging is already recyclable.
In the U.S. and Canada, it aims to reach 100% renewable electricity for its operations by 2025.
The targets are part of what the company calls “good growth” that is “profitable, sustainable and responsible,” said Benno Dorer, chairman and CEO at Clorox, in a statement to Dow Jones Newswires.
Corporate sustainability efforts have had a mixed record. In a 2018 survey of 297 global companies by Bain, 47% said they had failed to meet even half of their sustainability targets, while only 4% reported achieving or exceeding their goals.
A report out Wednesday from investor group Climate Action 100+ showed that at the two-year mark of a five-year initiative to push 161 focus companies into climate sustainability 70% have set long-term emissions reduction targets. But just 9% of the companies, which span consumer products giants to oil and gas concerns, have targets that are in line with or go beyond the minimum goal of the Paris Agreement to keep the rise in global temperature to below 2 degrees Celsius.
Clorox also said it will “advance the science behind alternative approaches to animal testing,” with the “ultimate goal” of eliminating U.S. Environmental Protection Agency regulations that mandate animal testing for disinfectants.
Starting next year, the company will publish a list of “restricted substances” for its household cleaning products to improve transparency around its ingredients.
“As a mission-driven company, it’s important for us to continue integrating ESG [environmental, social and governance] into our overall business strategy,” Dorer said.
Clorox shares are trading down 3.9% in the year to date. The S&P 500 SPX, -1.97% is up 14% in the same time span.