We began in 1846 as a baking soda business. Today, we are a top-tier Consumer Products Company with a large portfolio of brands that consumers love, especially the ARM & HAMMER® brand.
We have a rich heritage of commitment to people and have long regarded ourselves as a friend of the environment. Over 100 years ago, we began using recycled materials in our cartons. We were the first U.S. manufacturer to remove phosphates from laundry detergent. We were one of the first corporate sponsors of the inaugural Earth Day in 1970.
Church & Dwighters are goal-oriented people. To create a compass for our Sustainability program, we have established aggressive goals for ourselves. Our environmental, social and governance (ESG) efforts are directed towards improving the Sustainability profile of our operations and products, positively impacting our employees and the communities in which we operate and minimizing the environmental impact of our expanding global operations.
Today, 100% of our direct operations’ global electricity needs are offset with renewable sources. We are reducing our environmental footprint by increasing renewable energy usage at our facilities, reducing water usage and greenhouse gas (GHG) emissions, reducing solid waste to landfills, developing environmentally responsible packaging and improving our suppliers’ environmental practices.
In 2022, our application to the Science Based Targets Initiative was approved. These new science-based targets take into account the level of carbon reduction needed to meet the goals set forth in the Paris Agreement. In 2022, our absolute direct emissions from our operated facilities (Scope 1), indirect emissions from our operated facilities, e.g., electricity and steam purchases, (Scope 2) and emissions associated with transport of our finished products to our first point of customer contact (in the U.S. and Canada) and corporate business travel (targeted Scope 3) decreased approximately 5% versus 2021. As we prioritize actions in support of our science-based targets, we continue our progress towards our primary near term climate-related goal to achieve carbon neutrality for global operations owned and controlled by us by the end of 2025. We have already offset more than 90% of our targeted GHG emissions. To achieve carbon neutrality, we partnered with the Arbor Day Foundation in 2016, and over the years have grown to be its largest forestry carbon partner. Through this partnership we’ve supported the planting and growing of millions of trees in the Mississippi River Valley and the protection of existing forests in Canada and Peru. These trees will remove carbon dioxide from the atmosphere and emit life-sustaining oxygen.
We are continuing to pursue our strategy to ensure that our plastic packaging has minimal impact on the environment by eliminating or reducing plastic from our packaging wherever it is practical, including: seeking non-plastic alternatives and reducing plastic weight where possible; increasing plastic recyclability and circularity through plastic component simplification and consumer education; and by increasing the amount of Post-Consumer Recycled (PCR) plastic in our packaging. In 2022, we launched our new concentrated liquid laundry detergent formulas, which means that less liquid detergent (and therefore less plastic packaging) is required to deliver the same number of washloads. This change alone reduced the amount of High-Density Polyethylene plastic in our bottle portfolio by approximately 4 million pounds in 2022. Our goal is to increase PCR plastic to a minimum of 25% average across all global plastic packaging by the end of 2025. Currently, over 17% of our plastic packaging is PCR. Building on our progress, we have adopted a new goal to reduce the level of virgin (petroleum based) plastic packaging used globally.
With more than 5,200 employees at over 50 locations around the world, the safety and wellness of our employees have been and continue to be our top priorities. Recognizing that the mental health of our employees is as important as their physical well-being, we expanded the benefits of our Employee Assistance Program (EAP) to provide free professional support to our employees who may be dealing with relationship, emotional, substance abuse or other issues. Additionally, we took steps to help our employees as their families grow by launching an enhanced parental leave and family care benefits program.
We embrace the diversity of our employees and believe that a diverse and inclusive workforce fosters innovation and cultivates an environment filled with unique perspectives, talents and experiences. Diversity is a strength and makes us better. We are dedicated to maintaining a culture of belonging at Church & Dwight.
We take great pride in fostering an enduring culture of “doing well by doing good.” By focusing on making meaningful contributions to society each of us can create a stronger, more resilient company while contributing to a better world. In 2022, we matched, dollar for dollar, donations our employees made to the Church & Dwight Employee Giving Fund (EGF), an employee-run giving program that primarily supports charitable organizations where our employees work and live. The EGF contributed $1.2 million to 209 deserving organizations in a variety of areas in 2022, and it has contributed over $16 million to charitable organizations in the U.S. to date. Given the scale of the humanitarian crisis in and around Ukraine, Turkey and Syria, the EGF expanded its reach and donated to the International Red Cross, with Church & Dwight matching employee contributions. In addition, seven organizations in the diversity, equity and inclusion (DEI) and Environmental Sustainability space were chosen in 2022 by the Church & Dwight Philanthropic Foundation (the “Foundation”) to receive grants totaling $915,000 in the aggregate. Established in 2020, the Foundation is administered by Church & Dwight employees and focused on helping to create equitable and inclusive opportunities and advancing environmental preservation.
For our efforts in 2022, we earned public recognition, including being listed as one of Forbes America’s Best Midsize Employers, Newsweek’s Most Sustainable Companies, Newsweek’s America’s Most Responsible Companies, the EPA’s Green Power Partnership Top 100 and in the FTSE4Good Index Series.
While we have made significant progress, we missed some of our goals. In 2022, we achieved a 3% reduction in global process water and/or wastewater normalized to production against our overall annual goal of 10%. Likewise, we fell short on our 10% reduction targets for GHG and energy (largely driven by lower volumes of product shipped in 2022 vs 2021). We made great progress at assessing 92% of our at-risk suppliers but fell slightly short of our 100% goal.
We made positive steps in 2022 with regard to DEI with an increase of women and People of Color at the management and senior management levels, but we still are not satisfied with our representation numbers. One area we are focused on improving is having diverse candidate slates and interview panels at our corporate locations. In 2022, only 70% of the time did we hit our requirement. While the shortfall was in part due to the tight labor market and a new outsourced recruiting partner, we own it and are committed to improving.
We have a clear roadmap to meet our Sustainability goals and address our shortcomings, and I am confident that we will become an even stronger and more sustainable company in the years ahead.
Please read this Report to see the progress we have made over the past year to make Church & Dwight a better company.
Matthew T. Farrell
President and Chief Executive Officer