TCFD
TCFD Pillar TCFD Disclosure The Clorox
Company Disclosure

Governance

Board oversight of climate-related risks and opportunities

The Board of Directors’ Nominating, Governance and Corporate Responsibility Committee oversees Clorox’s environmental matters and compliance and is updated at least quarterly on ESG priorities, including, as appropriate, those related to climate change.

See CDP Climate Change Report Section C1

Management’s role in assessing and managing climate-related risks and opportunities

The Clorox Executive Committee is responsible for overseeing the execution of our business strategy, driving ESG priorities, including goals related to climate change, such as carbon emission reductions and renewable energy. Clorox continues to be committed to strong governance and ESG performance and has tied elements of its ESG goals to executive compensation awards.

See CDP Climate Change Report Section C1

Strategy

Climate-related risks and opportunities

Clorox identifies risks and opportunities in its products, operations and supply chain, and discloses details as part of its annual CDP reporting. The primary risks and opportunities associated with climate change the company is exposed to and managing include:

  • Physical risks associated with extreme weather conditions or water stress due to climate change impacting our business operations, disrupting our supply chain, limiting our access to water, or impacting commodity, operational and distribution costs
  • Transitional risks associated with policy and regulations that increase the pricing on GHG emissions
  • Transitional risks and opportunities associated with shifts in market preferences as consumers seek products from companies that are proactively working to reduce their climate change-related impacts and offering less carbon intensive product solutions
  • Transitional opportunity associated with reduced operating and product costs resulting from resource efficiency improvements associated with climate related actions to reduce energy use, water use, waste and material use

See CDP Climate Change Report Section C2

See CDP Water Security Report Section W4

Impact of climate risks and opportunities on businesses, strategy and financial planning

Climate risks and opportunities that might impact our business strategy include:

  • Consumer demand for products with lower environmental footprints growing faster than we have allowed for in our innovation investment planning – this is both an opportunity for our low environmental impact products, and a risk if we cannot meet demand
  • Acceleration of infectious disease and pandemics associated with warmer climates, increasing global demand for disinfecting products and solutions in consumer and business-to-business markets — this is both an opportunity given our leadership in disinfection and a risk if we cannot meet demand or sufficiently innovate to meet particular consumer needs
  • Low carbon energy sources and material supply chains that cannot keep up with growing industry demand, driving up costs or limiting our ability to meet our environmental commitments or bring sustainable innovation to market
  • More frequent and extreme weather events causing supply chain disruption and leading to health and sanitation issues due to flooding and property damage. This is both an opportunity and a risk given the potential impact on supply chains but potential increase in demand for our disinfection and other household products.
  • More severe and geographically dispersed water stress causing supply chain disruption
  • Faster adoption of climate change regulation that might increase our costs

See CDP Climate Change Report Section C3

Risk
Management

Process for identifying and managing climate risks

Clorox identifies opportunities and potential physical, regulatory, reputational, changing consumer trends/awareness and any other risk factors associated with climate change, GHG emissions, energy consumption and water consumption. This is done at the corporate level with the cross-functional ESG & Sustainability team and cascaded to various internal stakeholders, business and functional units as appropriate.

The Clorox Enterprise Risk Management (ERM) Steering Committee, consisting of senior leaders across the organization, was established to provide a sustainable framework to proactively identify, understand, assess, prioritize, articulate and continuously manage risks, both existing and emerging, across the entire organization, including climate risks. The ERM office reports directly to the company Board of Directors and provides the Board key ERM updates.

See CDP Climate Change Report Section C2

Integration of climate risk management into company’s overall risk management

In order to mitigate the risks associated with climate change, Clorox has identified Climate Stewardship as a key ESG priority integrated into the company’s IGNITE business strategy, building on the progress it has achieved in reducing the carbon footprint of its operations and products for more than 10 years. Through IGNITE, the company has committed to taking science-based climate action across its value chain, including opportunities in its operations, products and supply chains. Actions include compaction and other material reduction innovations to reduce material, water, and transportation footprints of its products, renewable energy procurement for its operations, and supply chain engagement informed by life cycle analyses to identify and address its material upstream carbon and water footprints, as well as impacts of products during consumer use and at the end of life. Life cycle analyses are also employed to inform new packaging design to ensure sustainability tradeoffs are considered during the development and commercialization of new products. For instance plastic packaging is often lighter weight to ship and requires less energy to produce than glass or metal but has different recyclability and end-of-life considerations.

To accelerate progress, we have established a Sustainability Center responsible for defining, driving and tracking progress against Clorox’s environmental sustainability strategy. Each business unit leadership team is responsible for defining and achieving a strategic sustainability plan for its portfolio of brands that will help deliver corporate IGNITE ESG goals and advance its brands towards becoming a sustainable business. Business unit strategic sustainability plans are being integrated into the company’s long range planning process, with accountability to the Clorox Executive Committee.

See CDP Climate Change Report Section C2

Metrics &
Targets

Metrics used to address climate risks and opportunities

We track, manage and disclose our performance in a number of areas related to climate risk, including Total GHG Emissions, GHG Emissions Intensity, Total Energy Consumption, Energy Intensity, Total Water withdrawn, water intensity and total water withdrawn from areas of high baseline water stress

See Scorecard - Planet, or CDP Climate Change Report, Section C4 – C9

Scope 1, 2 and 3 GHG emissions

Scope 1 and 2: CY19 234,854 metric tons CO2e

Scope 3: CY19 283,651 metric tons CO2e (partial, US finished goods distribution and employee business travel)

See Scorecard - Planet, or CDP Climate Change Report, Section C4

GHG emissions targets

Set and achieve science-based targets for Scope 1, 2 and 3 GHG emissions by October 2021

See IGNITE strategy; See Scorecard - Planet

Energy consumption

666,112 global absolute megawatt hours (MWh) in CY19

-6% energy use per case of product sold vs. CY18 base year

See Scorecard - Planet

Renewable energy targets

100% renewable electricity in U.S. and Canada in 2021

Water consumption

2,904 thousand cubic meters in CY19

-5% water use per case of product sold vs. CY18 base year 410 thousand cubic meters withdrawn from regions with High or Extremely High Baseline Water Stress in CY19

See Scorecard - Planet

Water targets

Drive continued water efficiency improvements as we advance a more localized approach to water stewardship