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Flexible Work and Investment in ESG are Driving Profitability for this Global Brand

The Clorox Company’s latest annual report reveals that a more human-centric and ethical approach to business can optimize productivity and lead to financial gains.

by Sheya Michaelides
January 20, 2023
in Business
Reading Time: 7 mins read
A A
Flexible Work and Investment in ESG are Driving Profitability for this Global Brand

The Clorox Company creates value through its unique Environmental, Social and Governance (ESG) strategy.

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  • The Clorox Company has consistently increased net profit over the last twenty years; in 2022 it achieved net sales of $7.1 billion.
  • A combination of a human-centric approach and robust, transparent governance has contributed to the success of this global company.
  • 53% of all employees now prioritize wellbeing over work, and 77% of employees in the U.K. believe that flexible work policies boost productivity.

The Clorox Company’s flexible work policies and Environmental, Social, and Governance (ESG) strategies have positively impacted net profits; in November, the company declared a quarterly dividend of $1.18, per share on its common stock that will be paid out to shareholders next month.

It has consistently increased its dividend for twenty years and is renowned for offering value to stakeholders. Established in 1918, the Clorox Company emerged as a leading global manufacturer of staple brands such as Brita, Burt’s Bees and Glad. With its headquarters in California, it is now a global operation comprised of 9,000 employees across twenty-five countries/territories. In a survey, 86% of employees declared the Clorox Company “a great place to work.”

Clorox is a renowned and trusted brand leader — however, this is only one part of its success. According to its website, the Clorox Company was one of the first in the U.S. to provide financial business reports integrated with environmental, social, and governance performance measures (ESG). The company views this method of reporting as part of its commitment to its employees, stakeholders, and the global market. 

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Over the last six years, the Clorox Company has received many accolades for its ongoing commitment to inclusion, diversity and equality, and allyship (IDEA) — particularly for its progressive workplace policies and practices. The company is often recognized as one of the best places to work (receiving accolades from the Human Rights Campaign and Glassdoor, among others).

Aligning priorities with profits

The Clorox Company 2022 Annual Report outlines the company’s financial performance figures alongside statistics on progress outside of net profit. The data makes clear that the company’s commitment to social issues, its impact on the environment, and its accountability and transparency as a business (ESG) are all integral to its current success.  

According to the report, the company achieved net sales of $7.1 billion in 2022. The company’s CEO, Linda Rendle, states that despite operating in a challenging economic environment, it is essential to retain its ESG commitments to ensure long-term growth. 

The report also suggests that the company understands that to retain talent, drive productivity and sustain future growth the employee experience needs to align with the constantly evolving nature of how, where, and when people work.

Clorox appears to have fully embraced that the future of work is a hybrid one, and that the quality of face-to-face human interaction is more important than the frequency of in-person meetings. 

ESG priorities translate to business success

According to a 2019 Mckinsey report, a weak ESG strategy could negatively impact a company’s overall profitability. Many of the ESG elements outlined in the Clorox Company 2022 Annual Report appear to mirror the robust strategies highlighted within the Mckinsey report. 

For example, the perception of fair and sustainable work practices and access to environmentally-friendly products are said to boost consumer loyalty and improve stakeholder relationships. This will, in turn, expand the consumer base and increase sales. 

Reducing energy consumption is another example of how a commitment to climate justice can preclude unnecessary costs (this is particularly salient now that energy costs are increasing — an issue highlighted in this Allwork.Space article). The Clorox Company is an example of a corporation that not only attracts attention for doing the right thing; but also adds value to the business at every level.

The Clorox Company directly addresses environmental matters via its ESG strategy by establishing concrete targets. The realization of net zero emissions by 2050, a goal of 100% recyclable packaging by 2025, a target of 100% zero waste to landfill by 2030, and a commitment to source more sustainable partnerships are all highlighted in the 2022 report.  

The global accounting firm KPMG also emphasizes the need for robust ESG frameworks to create long-term value and sustain growth. KPMG maintains that stakeholders often consider a company’s environmental, social and governance credentials before making strategic decisions. 

Consumers, investors, and business regulators are paying attention to companies that demonstrate a lasting, positive commitment to all aspects of ESG. 

Many people have begun to consider a robust commitment to ESG in their purchasing decision process, and favor companies that positively impact the environment and the communities within which they operate. The Clorox Company has recognized the role played by their stakeholders in guiding and advancing all elements of their ESG strategy. According to KPMG, this is a vital component of business success and the key to long-term prosperity.

Why flexibility matters

The Clorox Company has established various flexible work initiatives to boost productivity, retain staff and raise profits. Here is how the Clorox Company benefits through its flexible work offers:

  • A more diverse talent pool (flexible work attracts applications from those who are not able to work in traditional nine-to-five office-based roles).
  • Attract the best workforce for the future (known as future-proofing) – flexible work practices matter to the next generation as much as any other employee benefit, and work-life balance and flexible work practices go hand-in-hand for millennials. 
  • Reduced absenteeism (by empowering employees to manage their health conditions at home).
  • Increased retention (more autonomy for employees improves staff retention).

A report conducted by Canada Life Group Insurance found that 77% of employees in the U.K. believe that flexible working conditions increase productivity. The Clorox Company policies recognize the direct relationship between flexible policies and productivity. 

The annual report cites a reduction in stress levels as one of the main benefits for staff, while the company is able to attract and retain the best employees. A separate report from Microsoft — the 2022 Work Trend Index  ­— highlights that 53% of employees (globally) prioritize wellbeing over work. This reflects the feelings of many working parents, carers, and the younger generation. 

As the repercussions from the pandemic continue to impact how we live, work and view our work-life balance, businesses such as the Clorox Company are ahead of the curve in an industry where many still (falsely) believe that flexible work offers are costly.

The question now is whether other firms that occupy a similar space in the industry will follow the Clorox Company’s lead and embrace many of the strategies that have proven to boost productivity and profits. The goal for the Clorox Company and others should be to improve and protect the future health of the communities they operate in and serve. 

In these challenging and economically volatile times, creating value within an organization needs to be achieved through meaningful relationships. Building trust and equity among employees, suppliers, business partners, investors, and shareholders is vital to long-term profitability. 

The Clorox Company’s focus on ESG and its understanding of the needs of its people demonstrates a much more holistic attitude to doing business. By putting people first, they are safeguarding the future of the company.

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Tags: BusinessHybrid WorkLeadershipSocial Impact
Sheya Michaelides

Sheya Michaelides

Sheya is a freelance writer and part-time Psychology Masters student based in London, England. With a bachelor’s degree in organizational psychology and industrial sociology, Sheya has a diverse working background in both the voluntary and private sectors, with a focus on issues of race, diversity, and equality.

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