Ecolab CEO Christophe Beck doesn’t like to call the seemingly endless slew of weather calamities this summer—wildfires in Canada, 120-degree temperatures in Italy, and a tropical storm slamming Los Angeles—an opportunity. But he does concede that these events have added urgency to efforts to contain climate change and are keeping the heat (no pun intended) on his big corporate clients to improve their sustainability records. “It is making climate change more real for people,” the Swiss-born CEO says.
The company, which began in 1923 in St. Paul, Minn., as Economics Laboratory, has a client roster chock full of Fortune 500 companies, such as Coca-Cola, Walmart, Dow, McDonald’s, PepsiCo, and Microsoft. Ecolab, a $14 billion-a-year company, provides industrial cleaners, wastewater treatment, and cooling water treatment products.
Beck says clients, also facing public pressure, are hungry for the cost savings that come with more efficient water use. That includes the oil and gas industries, which he says will remain very large for decades, even as renewable energies make up a growing percentage of energy use.
“Companies realize they can produce oil in more sustainable ways,” says Beck, who is not to be confused with Christophe Beck, the film score composer of such movies as Marvel’s Ant-Man series.
At the same time, a big incentive for his clients is a more prosaic concern: cutting costs. “There is a theory that people are ready to pay more for sustainable products. It’s not really true for the masses,” says Beck.
This interview was edited and condensed for clarity.
Fortune: Does this summer of bonkers weather worldwide help Ecolab’s business?
I would answer yes, but that feels self-serving. It is, however, making climate change more real for people. The wildfires we’ve seen this year from a human, social, and business perspective are threats that are making climate change even clearer for anyone who thought it was truly not happening. And since we are in the business of helping companies cope with climate change, it’s good for business.
Do you worry that the ESG pushback could reduce corporations’ urgency to save water and be better environmental stewards?
I don’t think so. Take the example of the Paris Agreement. The previous U.S. administration withdrew from it, yet no company has changed its plans. That’s because they need water and energy to keep operating. They need natural resources and to procure them in a way that makes business sense. If you produce more or better products with less water and energy, you create less waste, reducing costs and carbon footprint.
What industries do you see most ripe for reducing water usage and, therefore, offering Ecolab the biggest opportunities?
To put it in perspective, 150 companies use one-third of the world’s water resources. You can fit them all in a single room, which is pretty cool because you can collectively change things more quickly. There are two groups of companies. There are those with huge potential, such as oil and gas, and those with less potential but which consumers expect will do more. That second bucket includes food and beverage companies like Coke, Pepsi, Nestlé, et cetera. That’s because they’re related to agriculture, which is behind 70% of water usage on the planet. They have to be cost-competitive, because while there is a theory that people are ready to pay more for sustainable products, it’s not really true for the masses.
And there are also companies making microchips rather than potato chips.
You have data centers everywhere around the world, and that’s growing exponentially. We as an economy will need way more of those for our computers since the large servers use a lot of energy and need to be cooled down. And you need a lot of water for that. As for phones, you need 50 gallons to produce their chip. So, tech companies have huge potential and are making the most progress.
You can argue that the oil and gas and paper industries are fading. So, what helps Ecolab grow?
Without stepping into a political debate, I think that in the next 30 years, we will need more oil and gas than we use today. Renewable energy is still a small percentage of the total energy production globally, and the energy from fossil fuels will still be the bulk of it. It’s turned into a growth opportunity because companies realize they can produce oil more sustainably at a refinery, whereas now, you still have to use more water than oil to make the fuel. We can help these big brands reduce their water usage and carbon footprint. There is also the rise of electric vehicles, for which you need a huge amount of lithium. That comes from mines, and we must use underground water for that. And there is, of course, helping brands like McDonald’s, Coca-Cola, Pepsi, Nestlé, and Tyson hit their ESG goals.
Almost all of Ecolab’s business is products and services for corporations, with virtually nothing for the general consumer. This year, you announced your first-ever suite of cleaning products selling at Home Depot. Is this the beginning of an effort to go after the consumer market?
No. This line at Home Depot focuses on the pros or professional contractors. We are always trying to reach new markets and new people. That includes smaller contractors who don’t typically buy from us. So two years ago, we approached Ted Decker (CEO of Home Depot) and said, “What can we do here?” As those smaller contractors grow, they become bigger companies, and then they shift to our more traditional model. So it’s a new end market for us to capture.
Get to know Beck:
- He’s a trained rescue helicopter pilot in his native Switzerland.
- Beck worked on a space shuttle project for the European Space Agency early in his engineering career.
- He speaks four languages—English, French, German, and Italian—and a fifth if you include the Swiss-German dialect.
