Good morning, everyone, and welcome to Ecolab's 2023 ESG webcast. Leading our webcast today will be Christophe Beck, Ecolab's Chairman and CEO. Before we begin, please note that these slides, along with our other sustainability, diversity, and governance information, as well as background materials on our company, are available on Ecolab's website at ecolab.com.
We note that this webcast and the associated slides may include estimates of future performance. These will be forward-looking statements, and actual results could differ materially from those projected. Factors that could cause actual results to differ are described under the Risk Factors section in our most recent Form 10-K and in our posted materials. Following the presentation, we will hold a question and answer period. Please submit your questions using the question window on the webcast. Now, here's Christophe Beck.
Thank you so much, Andy, good morning, everyone. A pleasure to be with you for the fourth time over the past few years. Always a pleasure to share with you our ESG growth story. It's called ESG today, it's been called in many different ways over the past 100 years. It's not to pretend that we have all the answers, because we don't. With the number of customers that we're serving in the number of industries and number of countries that we serve, as you know, we've learned quite a bit. One of the key learnings has really been that there is a way to grow while making more money and reducing the impact on the environment.
That's gonna be a silver lining as well in our discussion today, that sustainability and profit can truly go hand in hand, at least in our view. With me today, a great team. Really proud to have Emilio Tenuta, our Chief Sustainability Officer. He is gonna cover how do we get to 100% positive environmental impact, the E of the equation? We're gonna have Laurie Marsh, our Chief Human Resources Officer, who will cover our people impact, and Lanesha Minnix, our General Counsel, who's gonna cover how do we get to 100 positive governance impact as well? We'll have some time for the Q&A, as Andy has mentioned.
Please submit your questions in the chat box, and we will try to answer as many as we can, and the ones we can't, we'll do that offline, and feel free to reach out to us at any time, as you always do, obviously. Let me jump in before passing it to Emilio. For 100 years, we've been protecting what's vital. This is our purpose as a company. We protect people from infections wherever they come from. It can be from what you eat, from what you touch, from what you drink, or from COVID, as we've experienced as well over the past few years. We protect the planet as well, especially water, which is our core element of focus, and knowing that the more water we save, the more energy we save as well at the same time.
It's a good deal, improving water availability and at the same time reducing the carbon footprint. Last but not least, it's to protect businesses, the customers that we serve everywhere around the world. We can protect people health and planet health, where at the same time our customers so can improve their performance, can improve their productivity, can improve their profitability while doing what's right as well. Protecting what's vital has been our purpose as a company for a very long time, 100 years, since we started in 1923. We believe that this purpose is gonna remain for the years to come.
When we think about where we are and where the world is going, thinking about temperature, we've all or most of us have committed to this 1.5 degree increase by 2100. Well, we know that the world is heading to that temperature much, much earlier. When we think about water availability as well, what we thought would be an okay problem for the years to come is becoming a massive problem, as you will hear as well from Emilio, in a few minutes, as well. There's a lot of work to do in order to manage, to address all the impacts from climate change, in order for industries and for the world to keep growing.
That's why we believe that we're uniquely placed to help our customers address all those issues. When we think about the capabilities we have, we have 47,000 people around the world that are serving over 1 million customer locations in 40 industries, in 170 countries, supported by over 1,000 scientists and over 1,000 digital experts as well, since that's becoming such a core of our offering for our customers. Our reach is also unmatched, where we touch over a third of the world food production, almost a quarter of the world's power, and as we've experienced over the past few years, have been able to protect almost 1.5 billion people around the world.
When we think about what we can do and how many people and locations, we can reach as well, we believe that we are pretty well-placed to be one of the world's leading sustainability company. Interestingly enough, we can do that, as mentioned earlier, in a way that makes sense for business. That's been true since we were called Economics Laboratory in 1923, where ultimately you can get the best results at the lowest total cost by reducing your impact on the environment, reducing how much water you use, energy you use, and waste you create as well. The way we do that as a company, and we've done it for a very long time, it's by bringing together breakthrough technology.
It's by bringing as well on site, on every locations around the world, experts that are dedicated to that specific industry as well. It's sharing the global know-how as well from around the world, knowing what works best in order to deliver the best results as well. It's to predict what could go wrong as well before it gets wrong as well. Bringing all those elements together allows us, again, to deliver our promise to our customers, which is best results at the lowest total cost because you reduce your impact on the environment. We've built a $14 billion company on that promise, so we've demonstrated that it works. Sustainability and profit are not at odds against each other, but come hand in hand in our world.
It's probably one of the reasons why the very best brands and companies around the world have been working with us, and many of them have been working with us for decades. We've grown with them, they've grown with us as well, and made sure that they could do it in a way that was good for their own customers and for their environment as well around them. That's why, the bigger our impact, the more we grow. The more water we save, the more energy we reduce, the faster we grow as a company as well. That's our model that we've been practicing so for a very long time. We do it in a way that's delivering high returns for customers.
You're familiar, most of you, about our EROI concept, which is basically understanding how much value are we creating for our customers. How do we improve their business outcomes, the quality of the food that they're producing, or the safety of the power they're producing as well. How do we improve the operational drivers, productivity, costs, for instance, and at the same time, how do they reduce their environmental impact on water, energy, greenhouse gases, and waste, just to name a few. You add all that's the total value we deliver for our customers. Our promise for our customers is ultimately, you will get your money back for the investment you've made in Ecolab, and you're gonna get an incremental return of 25% at least by working together.
At the end of the day, well, the more they work with us, the better their performance, the lower their impact, which is feeding obviously, new growth for us, which is a good cycle for our customers, for us and for the environment. Over 100 years, we've been helping a lot of customers around the world do more, better, with less. After 100 years, we're not at the end. We're at the end of a chapter, but we're just getting started. I personally believe that the best is really so in front of us, not only because the world needs us more than ever, but because we have the capabilities to make a real difference going forward.
That's why, as a company, we've defined this new chapter, the chapter up till 2030, that we will call a 100% positive future. What does that mean? Is that we want to deliver on our financial ambition. This one hasn't changed for a very long time, but I believe is reachable more than ever. 6%-8% sales growth, reaching 20% ROI margin, and delivering 15% EPS growth in average year after year by delivering on our purpose. By protecting 3 billion people from infections, by conserving enough water for the drinking needs of 1 billion people, and by delivering 25% returns to our customers in a way that is impacting positively the world around us. That's what we mean with 100% positive impact. We are 100% committed to safety, with our objective to get to Goal Zero.
100% committed to equity, which is core to who we are as a company. It's to become a 100% water and carbon positive, by 2030, and a 100% powered by renewables as well at the same time. At the end of the day, means doing well by doing good, by bringing industry together to do what's right, by progressing towards our DEI goals, which have been core, to us for a very long time, being such a people company, serving people for people needs. By leading on disclosure, as well, and reporting, a kind of a controversial topic that we believe, done right, could really lead to the right results. By achieving 100% renewable electricity in Europe, that's our objective for 2023. By engaging our employees as well every day, more than ever.
Last but not least, by being recognized when it matters. It's not the awards that are driving us, obviously, but it's always good to see the world around us, recognize the progress that we're making. I think that where we are and where we're going is in a place that is good for our customers, good for our shareholders and good for the world around us. I'd like to go through now, so with Emilio, Laurie, and Lanesha, in helping you understand: How do we grow fast or even faster? By growing our impact, growing our team, and growing our governance. With that, I'd like to pass it to our Chief Sustainability Officer, Emilio Tenuta.
Thanks, Christophe, for setting the stage on our positive impact. I want to say good morning to everyone. It's great to be with you today to really share our 2022 positive environmental impact. I gotta say that this morning, we're pleased to say that our 2022 GRI report, our corporate responsibility report, and our sustainability report are available on ecolab.com. I encourage you, after the webinar, please check it out. I think you'll be pleased with the results that you'll see there. I'm gonna highlight. My role today is to really share our 2022 results related to our environmental positive impact. As we've done in other ESG webcasts, we always talk about what are some of the challenges that our customers are facing? Today, I wanna talk about the water crisis. Why?
Well, when you think about the water crisis in the world today, it's one of the biggest challenges that we'll see in our generation. It's one thing that we need to really focus on in terms of when we think of our planet, the blue planet. The truth is, and the reality is, that less than 1%, a fraction of 1%, is actually available fresh water that is consumed by society. To put this in perspective, let's think about bringing together the lakes and rivers and surface water into a bubble. If you capture that bubble, it would fit into the L.A. metro area, just to put this in perspective. Not a lot of water, and it continues to become even more scarce with the challenges that we're seeing related to climate, feeding a growing population.
Our demand today, it continues to be stressed. Looking at the future, the WRI, the World Resources Institute, has communicated there'll be a 56% water deficit by 2030 in a business as usual scenario. This is why Ecolab has come together. Oh, forgive me. The challenge, of course, for industry is that we have a critical role to play. When you think about developed and industrialized nations like the US and Europe, nearly 60% of the fresh water is focused on industry. Moreover, 150 companies can impact a third of the fresh water use on the planet.
As you can see, industry has a critical role to play, and that's why, as I was saying earlier, we were pleased that Ecolab had a front-row seat, along with 50 other companies, at the first UN Water Conference last March in New York, the first in nearly 50 years. Here's what this all meant. It meant that the UN was driving a call to action for public-private partnerships to really drive action around the world, around the water crisis, in a way that focuses on 100 priority basins, where we need to increase the public-private partnership to really drive action, collective action, to really manage the stresses that we're seeing when it comes to the water crisis and access to those in need.
The Water Resilience Coalition had a critical role to play, a coalition that Ecolab was a founding member with others, with seven other companies, and now has grown to be 36 companies, really with a CEO-led focus on raising water up the corporate agenda. Addressing the world's water crisis is not new to us. We've been focused on this for a century, and our 2030 impact goals, where we work together in partnering with our customers around water, food, climate, and health, is an example of how we're taking action to a 100% positive future. That also translates into our world-class operations. Let me begin by reviewing the positive progress that we made in our 2022, you know, performance related to our customer impact goals to start. For 2022, we're ahead on water, climate, and health.
We slightly missed the food target in 2022 due to the institutional business recovering from COVID. We're still on track collectively and cumulatively to reach that goal by 2030. Additionally, we've made strides in our operations, contributing to some positive outcomes that I'd like to share with you now. We're ahead on climate. We were ahead on water in 2021, fell behind in 2022. We're on track to delivering on our water target in 2023. The primary driver being material shortages that led to operational challenges. We have a plan to achieve that goal in 2023 and stay on track to our 2030 goal. On the people health side, we're on track with our DE&I goal. Laurie will touch on that here in a moment.
For safety, we're also making progress on the way to Goal Zero, which is a core value of the company. One more thing that I'd like to be able to highlight related to our operational performance specific to water. We continue to address and champion water stewardship. The Alliance for Water Stewardship is a commitment we made, and we're up to eight sites that are AWS, Alliance for Water Stewardship certified. In Brazil, we added another nature-based solution to really help a water-stressed area with a water fund that we contributed to in São Paulo, a water-stressed area that's impacted on quantity and quality, by working with the Water Resilience Coalition and members to really drive action to improve the quantity and quality of water for the community, for industry, and other stakeholders.
This allows us to really talk now about what I think is another example of our commitment to making a positive impact by 2030, something that Christophe talked about today and even more in 2030. On the left, represented by the blue bars, is our water progress. As you can see, today, we're making a positive contribution when you look at the impact that we have through our solutions, helping our customers to drive water savings, as compared to our enterprise, operational, and supply chain footprint. On the right, in the green bars, is our climate impact. We have some work to do today, but we're on track to achieving our 2030, 50% carbon reduction in our operations and our supply chain by 2030.
This is a real representation of t he way that Ecolab, in many ways, is driving the positive impact in the world through the work that we do with our customers as compared to our own operations. I'd like to bring this to life with a couple of examples, and I'd like to talk about one specific one in China, a company, a customer called Sinopec. This is a really great example where Sinopec was focused on improving their water reuse and recycle, driven by water stress and also stricter regulatory restrictions and guidelines.
We worked with the Sinopec team and partnering with our local team in China to really drive action around reuse and recycle, being able to reliably reuse 60% of the wastewater in the cooling systems that led to 630 million gallons of water savings and 750 metric tons of CO₂ emissions reduction. Going back to Christophe's point of the link between water and energy, leading to greenhouse gas reduction and a savings and optimized total cost of $1.7 million along the way. Let's move to a hospitality example. Loews is no doubt a brand that we all know and love. It is a brand that has been focused on driving in a high-end guest satisfaction experience. They have made very bold water and carbon commitments.
They look to Ecolab to bring a suite of solutions down to a hotel property level. They operate, by the way, 26 properties in the US and Canada. By partnering with Ecolab, we're able to deliver not only improved cooling system performance, but also, you know, on-premise laundry technology like Aquanomic, or in the restaurant when it comes to SmartPower in the dish machine. That led to a collective 56 million gallons of water savings, and get this, 1,400 metric tons of CO₂ emissions, again, leading to an optimized total cost of $1.7 million along the way.
I think you're kind of seeing a trend here, and this is the very best news of all, which is, in my 39 years of experience in industry, we know that water and energy are linked, no matter if you're in manufacturing or you're in a hotel in the US or in India. The fact is, the two are linked, and this gives us an opportunity to really help our customers drive action in achieving their climate goals by focusing on water as part of that solution.
Leads us to a program that we launched late last year called Ecolab Water for Climate, which is designed to help our customers, really bringing the best of Ecolab together, and being able to focus on how we address the local challenges with our water expertise, and really bringing together the end-to-end solutions when it relates to our technology. Digital technology, like 3D TRASAR and Water Flow Intelligence, and Ecolab3D, our cloud-based platform, that really enables us to give our customers the visibility, not only in terms of water savings, but energy efficiency, greenhouse gas reduction, and optimized total cost. Ultimately, this is a representation of really what's been culminating for 100 years for Ecolab, bringing it all together in one program.
That's a quick recap of our 2022 positive environmental performance, now I'm pleased to pass the podium to our, to our Chief HR Officer, Laurie Marsh, to talk more about how we grow our people.
Thank you, Emilio. What an honor to chat with you today about our people pillar. This should really be no surprise that this is our focus area, because our strategy around growth is incredibly tied to our people, who are the driving force behind our ability to grow and protect what's vital. Our approach to the social pillar is really designed to continue to accelerate our diversity, equity, and inclusion, or otherwise known as DEI outcomes. This first slide really is a grounding point for us and is meant to illustrate our progress toward our 2030 public commitments, where we are committed to increasing our management level gender diversity to 35%, with the ultimate goal of gender parity.
We are also committed to increasing management level racial diversity to 25% as we seek to meet full representation of the U.S. market. Just three years in, I'm incredibly proud to say that we are well on our way. We had exceptionally strong performance in 2022 around the measures around women, people of color, and Black and African American talent. As Emilio said, this sets us up to be well on track to deliver against our 2030 commitments. Ecolab also has a long-standing market and performance-based philosophy as it relates to pay. Consequently, we have several global processes and practices in place to ensure that we pay competitively and, as importantly, equitably in the market and making sure that we align to market. To confirm that's the case, we don't just rely on our own processes.
We actually go out and hire an independent auditor who audits our results every two years. I am pleased to say that for the third time in six years, our study confirmed that we have zero differences in pay discrepancies related to gender or race. This track record has earned us a perfect score from Bloomberg on their Gender-Equality Index in 2023. We also have stood the test of time with government-initiated audits and have a flawless track record for more than a decade, closing all of our audits with no material findings. To ensure that we also keep a pulse on what matters most to our teams, we give every one of our 47,000 associates a chance to formally share their feedback through our global survey provider called Humu.
I am delighted, really delighted to share that our April survey had an 89% response rate, which is up five full percentage points from 2022, and a notable improvement on each of our three key measures that we really care about: engagement, retention, and inclusion. We believe that our notable lift in each of these three measures is attributed to the fact that we are actively listening to our associates and addressing their concerns.
We've done so by expanding offerings to help our team manage whole life responsibilities, prioritizing their mental health and emotional health, and we continue to keep a close eye on helping our associates grow their careers. Which brings me to the next point, which is that we firmly believe in this growing company, that there is a world of opportunity, and our ability to nurture talent is paramount.
We've responded to our associate feedback by continuously enhancing our differentiated learning and development offerings. I really want to highlight four key programs here. First, I'll start with development season, we're square in the middle of that here at Ecolab, it is a program designed to, again, offer every single one of our 47,000 associates the ability to design a personal development and career plan.
They also have the ability to engage in related learning course suggestions, which are both online, that they could take at their pace, as well as traditional classroom training. Ecolab is also, as you all know, keenly focused on developing and promoting talent from within our field organization. Here I'd highlight two things: We have our Commercial Diverse Talent Academy, and our Women in Sales conferences, both happening later this summer.
These programs are designed to accelerate the development of the diverse pipeline of our commercial leaders. These programs specifically offer a couple of things. First, it allows our field teams to build and act on their career plans. It also gives them a chance to expand their networks, engage with mentors, and most importantly, grow their selling skills. Last but not least, you heard creating value for the customer is our leading competency.
It's core to how we grow and strengthen our customer relationships and grow new business, which is why we've expanded our global learning and development focus on our corporate account managers. We are focused on ensuring that 100% of this team is fluent on the differentiated EROI offerings, which Christophe spoke about, and that is essential to how we're going to create value in the future. Our commitment. There we go.
Not sure the slides are advancing. One moment. Our commitment to Diversity, Equity, and Inclusion extends beyond the four walls of our organization. We firmly believe that we not only do we need to do the work internally, we need to do the work externally. We are continuing to forge stronger partnerships with suppliers to ensure that we are empowering our non-majority and marginalized supplier communities in every way we can. As you can see here, our efforts are paying off. We exceeded our 2022 spend goal with a 154% increase on our diverse supplier spend, and notably, we had a 166% lift on our Hispanic and Black-owned supplier base since 2020. We are incredibly proud of our momentum, and we believe it puts us also on a confident path to 2030.
As I bring this social story to a conclusion, I am delighted to share that we continue to see an expansion of our employer of choice recognition. Many of which, as you can see, are repeats for Ecolab. While we believe these accolades are an outcome of our commitment to DEI, and certainly worthy of celebration, it is also affirmation that we are on the right path, while acknowledging that the journey is long and we're committed to that journey.
I really want to thank each of you for taking the time to hear a little bit more about the social pillar and the value we place on our people, who again, are the driving force behind our growth and our ability to protect what's vital. Now I'm going to hand the floor over to my good friend and our General Counsel, Lanesha Minnix, who's going to share more with you about how we grow by growing our governance. Lanesha, over to you.
Great. Thank you, Laurie. Good morning. It's so good to be here with you all, certainly looking forward to sharing with you the positive impact we've made and the way we have grown through our governance today. Our governance pillar is part of our ESG strategy and really is grounded in creating long-term value for our shareholders. We first start with our values. The hallmark of a strong governance program has to begin with a strong ethics and compliance program. At Ecolab, we are so proud to have a 100-year history of growing our business while also doing what's right and being committed to ethical business practices. Our leading compliance program is widely recognized and award-winning.
As Christophe mentioned, we are proud to have been awarded the 2023 World's Most Ethical Companies by Ethisphere. Also proud that we're one of only six companies to have been awarded this award for 17 consecutive years. This, we believe, is a testament to the program that we have. We recently modernized our code of conduct in 2023. We offer code of conduct training annually to all of our associates.
In addition to our compliance program, Ecolab continues to deliver on our long-standing commitment to strong governance practices. You will see a number of these practices that we're proud of here. I'll highlight a few of them. We have extensive shareholder engagement. We ongoing have discussions with our shareholders throughout the year. We have a pay for performance philosophy for all of our compensation practices. We have robust shareholder rights.
In 2023, we introduced Diversity, Equity, and Inclusion and water impact ESG metrics to our short-term incentive plan for our corporate officers. Ultimately, we believe these governance practices have actually enabled growth for Ecolab by protecting what's vital to our shareholders, our customers, and our suppliers. Our board of directors ultimately has oversight of our governance program. We have a highly qualified, independent, and diverse board of directors, and they're committed to maintaining strong, good governance principles.
We recently updated our corporate governance principles to add limits to our outside boards for our directors, and the board is also committed to and engaged in ongoing refreshment. We recently added a new director with life sciences experience, which is an area of growth for Ecolab, and we also rotated five of our leadership positions on our board, including our lead independent director.
We also maintain good governance from an ESG perspective, and while our management-led Sustainability Executive Advisory Team, also known as SEAT, chaired by our Chief Sustainability Officer, operationalizes and brings our ESG program to life, our board is ultimately responsible for the oversight of our ESG strategy. The board has allocated a number of responsibilities and the work of the various ESG matters relevant to our business to four of our board committees.
Most notably, we have a leading safety, health, and environment committee, which we've had in place for 2011, and this committee has responsibility for not only our safety, which is an important element, as Christophe and Emilio mentioned earlier, but also they have responsibility for a variety of other ESG topics, including our environmental matters.
Finally, at the core foundation of our ESG leadership is our commitment to transparent and ongoing ESG reporting and disclosures. We have a demonstrated track record of publicly and consistently reporting, and we have third-party verification for a number of our climate, water, and ESG frameworks. Ultimately, we believe that we are prepared and ready for any future reporting requirements from an ESG or climate perspective, whether from the SEC or any other governmental agency globally. We're very pleased about our reporting and readiness. With that, I'm happy to have shared this governance. I will pass the baton back to Christophe for his closing remarks.
Hey, thank you so much, Lanesha. I see that questions are coming into the chat box, which is good, so keep submitting them so we can address what's on your mind. I hope that with Emilio, Laurie, and Lanesha, so you could get a better feel on how we're growing by growing our impact, our team, and our governance, because we don't see ESG as one thing as a company, but three distinct pillars that are related. Obviously, this is true in our company.
You've seen ownership is also dedicated in three different directions, and the same is happening at the board level as well, making sure that we have dedicated committees focused on what matters, and then making sure we bring it all together in our CSR report, and as well, so regularly, so as a board discussion. Just to bring it to a close here and opening up for the Q&A. We've been, for 100 years, growing very nicely as a company by helping our customers deliver better outcomes at a lower total cost by reducing the impact on the environment.
We believe that now, time has come, as mentioned earlier, to open our next chapter, which is to grow even faster, but by delivering on the same, purpose of protecting people, planet, and, the customer, businesses in order so to help them fund, the future as well. In a way that is really so done, that's 100% positive, for the world around us, around our people, around, water and carbon, and the way we use, energy, as well.
In the last few years, we all know that we've gone through interesting challenges as a world, and those have been years where we could demonstrate how we working, how we protecting our people when COVID hit, how we protected our customers as well when supply shortages were happening as well, and how we were protecting our company during inflationary time as well at the same time. I think those have been great experiences for us to demonstrate how we're dealing with those challenges and turning them into growth opportunities for us and our customers.
In closing, I firmly believe that more than ever, we're positioned to do well by doing good, which means growing fast by delivering double-digit EPS growth as well, while we protect enough water for 1 billion people by 2030, and 750 million have been protected already in 2022. We are on track to deliver our positive water and climate contribution by 2030, as you've heard this as well by Emilio. Doing all that and supporting our customers while having a positive impact on the environment, and ultimately living our purpose every single day as the world's sustainability company, where people come to the office or serve their customers in a way that is helping them, helping us grow as well, which is a good cycle that we love. With that, I'd like to pass it back so to Andy, who is going to lead the Q&A.
Thanks, Christophe. As a reminder, please submit your questions using the question window on the webcast. With that, let's get started. The first question we have is on environment: Can you talk more about how you quantify EROI and the benefits you deliver to customers?
Yes, Andy, I'll take that. This is Emilio again. I wanna start, this is a great question. I wanna start with, you know, EROI being our value capture approach with our customers. It really begins with our approach of really understanding the challenges our customers have in delivering their key business drivers, right? Understanding three things: their business outcomes, we've mentioned hospitality a minute ago. You know, guest satisfaction is a big business outcome for hotels. The second is operational efficiency, doing more with less. The third is around the environmental impact that we can help them deliver around their water, climate, waste, greenhouse gas emissions targets. These are all monetized. The value is monetized, rolled up to what we call total value delivered.
When you think of EROI, it's a straight financial return on investment calculation, and it's a ratio between the total monetized value delivered, divided by the investment in Ecolab. The idea is to get 100% of your investment back, and then greater than 25%, in most cases, return on your investment in Ecolab, something that Christophe showed in an illustration earlier. That's how we think of EROI.
Wonderful. The next question is also on environment: Is there an average value per gallon of water savings, and how has that value increased over time with higher energy costs?
Great question. I'll start off right out, right out of the gate with no, there isn't an average. As we know, the thing about water, for example, it's hyper-localized. The challenges at the local level related to water prices in terms of quantity, quality, distribution, all relate to the local, you know, watershed that a customer is operating in. Of course, the energy is also localized. Obviously, we saw incredible swings in energy prices in natural gas.
You know, eight to 10 months ago, they were 70% higher year-over-year in the U.S. and up to 10x in Europe. We saw huge swings, and of course, they've come down recently. It's difficult to have an average water and energy price for a, across the board for an enterprise. What we do, is we focus on working with our customers to really drive the value using their localized metrics that rolls up to the EROI and their total value delivered that we spoke of earlier.
Yeah, thanks, Emilio. I'd like just to add something as well. It, it's about improving, obviously, the performance, reducing the cost, as you talked about, in very different situation around the world. I'd like to add the fact as well, that in some and always more cases, it's also allowing our customers with the right to operate. You can be in places like in India, where there is no water, in many places, or they can be a steel company that we are partnering with, like one of many, in India as well. There's not more water. They wanna double their production. Well, they need to produce double with less water as well at the same time. That's a right for growth. The last element I'll share with you as well.
Interestingly enough, when we think about the CHIPS Act, for instance, most of the data centers, microelectronics, factories are being built in deserts. It's in places that are remote, from people, but those are places with no water. Those are as well, opportunities so for us to help, those companies produce in places where there is no water. The cost is one of the elements. The right to operate is an even more important one, so for them.
The next question is on human capital management. Ecolab has a very robust ESG strategy. How is that manifested in the way you incentivize people, both short and long term?
Yeah, great question. Thank you for it. Let me start with short term, and then I'll close with long term. For our corporate officers, including Christophe, we've added a new ESG measure for plan year 2023, and that will be part of our management center plan or our annual cash plan. We've believe that our officers need to continue to have their performance tied to our core financial metrics, which include sales, operating income, and EPS.
Once that achievement at the end of the plan year is known, each officer's bonus payout will be subject to a plus/minus modifier, which is gonna be tied to three transparent key measures. First, gender diversity improvement at the manager level and above. Second, racial and ethnic diversity at the manager level and above. Lastly, water impact per unit across the enterprise.
This modifier will allow us to adjust the achievement, achieved bonus up or down 10 percentage points in alignment with the performance against the three stated goals. For 2023, in full transparency, for gender, we need to have a 3.4% growth rate. For ethnic diversity, we need to have a 2.6% growth rate, and on water intensity, we need to have a reduction of 2.10 volume per unit output. Finally, with regard to short term, I would also say that these, the achievement against these three performance measures are also used to differentiate other executive compensation, principally our annual merit.
With regard to our long-term incentive compensation, since, as you've heard, our value proposition is to provide customers the best results while consistently lowering environmental impact and improving sustainability, it's an inherent driver to our financial success. As a consequence, our LTI program has two features. It is 50% weighted on stock options and 50% weighted on our ROIC measures. Both, we think, are very much in alignment with the performance of our sustainability operations here at the company.
Hey, thanks, Laurie. I like the way you've described it and really making sure that our incentive are directly related with the purpose we have as a company. That's one step further versus what we did in the past. As mentioned before, so the more water we save, the more people we protect, the faster we grow, is aligning directly what we do with the sales and performance we have from a P&L perspective. That's always been true for 100 years. I think this latest step on these modifiers, is just bringing it even closer to what we're all looking for, including our investors. Thank you for that.
Yeah.
Great. Our next question is on governance. Could you please highlight how you educate your board of directors on sustainability areas today?
Absolutely. I'll take that one. This is Lanesha. I'll start with saying, because sustainability is core to our strategy for growth at Ecolab, the board is continuously focused on understanding not only sustainability from a trends perspective and a market and an industry perspective, but also, more importantly, on understanding how it impacts our business. I'll give you two fundamental examples.
The first one is a number of the work around ESG, as I had mentioned earlier, are allocated across four of our committees. Those that work is based on World Economic Forum's metrics of what are relevant to our business. The board has spent time understanding those metrics and what World Economic Forum views as important for our business and how that work could be allocated.
The second one really relates to our customer and our offerings, and as was mentioned earlier, our Ecolab Water for Climate is an important and innovative solution that we offer to our customers. Our board spent time understanding that offering, understanding water management and our digital offerings, and how that supports our sustainability offerings to our customers more broadly.
Great. The next one is on environment. What does 100% powered by renewables mean for 2030? Does it mean no synthetic raw materials and no non-circular packaging?
Andy, when we talk about 100% powered by renewables, Ecolab has a science-based target that was approved in 2020, that's on a 1.5-degree pathway, as Christophe talked about. We're focused on the aligning with science-based targets when it comes to how we leverage renewable sources to get to our goal of 100% renewable by 2030. We are, by the way, an RE100 company. We're actually gonna achieve the goal early, you know, 20 years earlier. We've leveraged to get there, what we call, virtual power purchase agreements to start in two of our biggest markets. In the U.S. and Canada, we're focused on a wind farm in Texas that enables us to get 100% of our purchased electricity from renewable sources, a wind farm in this case.
In Europe, in the fourth quarter, we're on track in Finland to have a wind farm that will be operational, that will basically take Ecolab's enterprise energy, Scope 2 electricity, to about 80% of the company's source from renewables. Here's the thing: when it comes to materials, we're also on track to get out of single-use plastic by 2030 as well, which is a goal that we have as a company that supports the point about, does that also include materials?
Great. The next one is also on environment. How much of the industry water usage that was talked about, 60% of freshwater use in developed nation, can Ecolab address?
Well, I mean, the fact of the matter is, we serve over 44 different industries, and more, all of them need water as a dependency. The response is all of them, because that challenge that Christophe talked about, whether you're in India, whether you're in France, whether you're in California, the risk is real. More and more industry is focused on developing partnerships with companies like Ecolab to help them achieve their water efficiency and water reuse and recycle goals, but also reducing their energy and their greenhouse gas emissions and optimizing their total cost, which is this 100% contribution that we talked about earlier.
If I may add a few comments. This is Christophe here. If 90%+ of our business today is to help customers do more with less, less impact on the environment and making more money while doing it, we have an increasing number of customers that are partnering with us to reach their net zero or positive impact by whatever the date is, 2030 or 2050, depending on the company. Which is showing that we are uniquely positioned to provide end-to-end solutions for global companies in order to really reduce their net water consumption to zero, which I think is the best demonstration of how much of the 60% we can impact.
Great. The next question is on governance. There's a lot of new reporting and disclosures coming into place now and in the near future. How ready is Ecolab to comply with these requirements?
The short answer is: we are ready. We do not anticipate any challenges, and you're right, there are a lot of potential reporting and disclosure frameworks that are coming into place or plan to come into place, but we are ready at Ecolab. What we understand is that we are ahead of many companies. We already engage in quite a bit of voluntary and consistent reporting year after year, and a number of disclosures under a variety of frameworks. We audit many of our metrics, including Scope 1 and Scope 2 data, and we've been doing this since 2015. All in all, we're very pleased with how we're progressing to be ready for any of these regulations as they come into place.
Great. The next one is also related to disclosures, probably more on Emilio's side, though. Can you share more on your TCFD work this year, and what's next on climate disclosure?
Absolutely, Andy. The Task Force on Climate-related Financial Disclosures, we've adopted that as an early adopter since 2018, and over the last few years, we've been focused on really understanding our risk assessment by working with our facilities and our procurement teams to really understand the operational risks around climate, weather events, extreme weather events, and all these other factors that we're focused on. You know, if potentially we're not on a 1.5 degree pathway. That includes screening that was done around the areas that we talked about, but also the opportunity for us to really drive opportunities proactively, to really drive action to prepare ourselves in case of, you know, extreme weather events. This obviously continues to be monitored in our operations and in our supply chain, and it's one thing that we're being very proactive on to support our growth over the coming years.
Great. The next one's on governance. From a governance perspective, would Ecolab consider splitting the role of chairman and CEO?
Well, thanks, Andy. I've had that question a few times, being asked obviously over the past few years, I am taking it very seriously, and the board especially has taken it very seriously. It was not my decision. It's a board's decision, as you know. Basically, the board's decision is to keep the flexibility and having the governance and organization that's best fit for purpose for a specific point in time, as well in here. So it's not one or the other, it's one and the other, that we want to have here. The two things that have been clearly laid out, as well at the same time, is that we want to have a very strong, lead independent director.
Dave MacLennan today has been leading the largest private company in the world for a very long time, very successfully, who is very active on the board and the board governance. The second thing is, the board has defined three key responsibilities that I, as the chairman, do not own. The first one is, the hiring, selection of new directors. This is the governance committee and the board's responsibility to do it. The second, it's to elect chairs for those committees and how those committees are being composed as well, at the same time, is a board responsibility. Third, the agendas for each of the committees and for the board are being defined.
With the lead director, with the chair of each of the committees as well. Those are the three key elements that have been defined and that we respect 100% since I've been elected in that role as well. I believe that this is the way that the company is most effectively and most naturally led as well as the board.
Great. The next one's on environment: Can plastics be eliminated altogether? If not, what can the company do to close the loop on its customers' plastic waste resulting from the use of its products in line with the global biodiversity ambitions?
I'd like to say two things here, and Emilio, you can, you can build on that. Plastic is not all bad. If you look at consumer companies, large beverage companies, if you look at the overall carbon footprint and environmental footprint of a well-recycled bottle, plastic bottle is actually the best solution for the environment today. It's not one or the other, that's always the best solution in here. Might well be the case down the road. When we think about it today, well, plastic might be a good solution, provided it's used and recycled the right way.
When we think about what we do as a company, our downstream business is developing great solutions in order so to recycle any type of plastic into any time of new plastic as well, at the same time. This is one of the best ways to reduce environmental impact at the lowest cost as well, at the same time. The second way to help our paper companies as well, so to replace plastic with paper products that are fully recycled as well, with no plastic in it as well, in order to find a better environmental solution. We look at those challenges that are shared from our customers as opportunities for us to innovate and to help our customers grow and help us grow as well, at the same time.
Can I just add a couple? Christophe, you said it so well. The three areas: recycle plastics, reusable materials, like you mentioned in the paper industry, but also reusable containers like the PORTA-FEED technology that Ecolab has developed, now it's been 30 years. But the other is the focus on system engineering and feed systems and the technology when it comes to connected chemistry that enables us to move from liquids to concentrates to super concentrates, reducing the amount of plastics and packaging by as much as 90% goes a long way to supporting that overarching goal.
Great. The next question's on human capital management: Can you comment on Ecolab's progress on pay parity?
Happy to take that one. This is Laurie. Maybe I'll start with just a clarifying point, because I find that often the concept of pay equity and pay parity are often confused. Pay equity, which you heard me speak about, is really ensuring equal compensation for men and women and all races who undertake the same work at the same level with the same performance. As you heard in my remarks, we have that. We have pay equity. Pay parity is something a little bit different, and it is an outcome when two things are achieved. First, you have pay equity, which we've demonstrated through our third-party audit, and secondly, you have equal representation across gender and race in each position across your organization. This means that pay parity is really based on several variables, all kind of anchored to talent.
You heard in my remarks, we are making material progress on talent representation, and we are continuing to actively seek more diverse talent here at Ecolab, and we're doing that through a few things. First, for every hire we make here at the company, we require diverse slates. We wanna make sure we cast a wide net, and we make sure that we're bringing as many possible people into this organization with diverse experiences and backgrounds. Secondly, we have a very robust, diverse recruitment channel strategy, making sure that we're recruiting at historically Black colleges, the Society of Women Engineers, and the like. Third, I point out that we have incredibly strong retention.
We mentioned that in our engagement scores, we have strong retention plans in place and a really abundant growth strategy around career development and advancement, as you also heard in my remarks around learning and growing our careers here at the company. All these things together will allow us to eventually have pay parity at the organization when we finally have that across the organization. While we're working toward that, we will continue to make sure that pay equity, which I talked about today, remains in place in the organization.
Great. Our final question is on environment. Are customers able to leverage the data you're capturing at their sites to help them track and report progress against their ESG objectives? If so, how are they using it to help them implement strategies to hit those targets?
A great question, especially as a final question. This has always been true. It's just the way we do it has changed quite a bit. In the past, we had our 27,000 people serving these 1 million customers while capturing the progress that's being made at each location, being a restaurant, a hotel, or a plant anywhere around the world, and rolling it up at the corporate level for our customers.
Increasingly today, it's done digitally, connected through the ECOLAB3D cloud, which is one of the most extensive industrial cloud for IoT systems in the world, with 40,000 plants connected today, where we know where we are in terms of water savings, energy savings, waste savings, and cost savings as well at the same time.
I was having that discussion this morning, preparing for a discussion with one of the hospitality customers that we have, and the discussion we'll have next week, while trying to understand, are we helping them reaching their goal, yes or no? How can we help them get beyond their goal as well? The way we do it is, with all the customers we serve around the world, Ecolab knows what's the best hotel, what's the best restaurant, what's the best paper mill, what's the best power plant anywhere around the world. We know what's the best performance, and most importantly, we know how to get there as well, which is how we develop programs for our customers in order to reach their goals and go even beyond for the ones who wanna get to net zero or to positive impact as well.
That's the way we help them, that's the way we grow, and that's why, more than ever, I feel confident about the performance delivery for the company in Q2, for the full year, and for the years to come, both from a financial perspective and from an environmental, social, and governance perspective as well. With that, I'd like to pass it back so for Andy to close the call.
Thanks, Christophe. That wraps up our webcast. This webcast and the slides will be available for replay on our investor relations website. We hope today has been helpful to you and look forward to further conversations as we continue to grow our business by growing our positive impact. Thank you for your time and participation. Hope everyone has a great rest of the day.