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SC Johnson CEO on company's plastic initiatives

Chairman and CEO, and Chairman of the Board, of SC Johnson, Fisk Johnson, joined Yahoo Finance Live to break down SC Johnson's latest plastic initiatives.

Video Transcript

ADAM SHAPIRO: And can you help us understand-- when you talk about using 100% ocean-bound plastic in your Windex line, does that mean there are actually, I guess, ships in the Pacific harvesting plastic that then gets recycled? What does that really mean?

FISK JOHNSON: Yeah. So we actually have a partnership with a company called Plastic Bank, where we fund people to collect plastic in Southeast Asia that's near riverways, on beaches that is plastic that has a high risk of entering the ocean. And we bring that back for processing through the Philippines, and then on to our largest manufacturing plant here in Wisconsin, where we recycle it into our bottles. And so when you buy a Windex bottle today, it's made out of 100% ocean-bound plastic that's collected in Southeast Asia. And we are expanding that program across the world.

AKIKO FUJITA: Fisk, what does this all mean from a cost perspective? It's great that you are putting in all these efforts here, but certainly it has to be much more expensive, just given what the whole process entails. How much of that do you think is passed on to consumers?

FISK JOHNSON: Well, nothing has been passed on to the consumer in terms of the pricing of our products at this stage. It is more expensive for us. Our ocean-bound plastic is probably 30%, 40% more expensive than a virgin plastic. Recycled plastic in other parts of the world can be as expensive as 60% greater. But we're currently eating all those costs.

We just think this is the right thing to do. It is such an important issue. It's probably the single biggest environmental issue that we have as a company. And we are really committed as a team that to do our part to solve the issue.

SEANA SMITH: Fisk, is that something that you're confident that you're going to continue to be able to do to-- continue eat the cost and not passing anything along to the consumer down the road?

FISK JOHNSON: So, we're hopeful that, you know, lots of other companies will jump on board-- and many are currently. And you know, this is one of those things where, you know, companies need to cooperate to develop scale in these recycling systems. And you know, the economics will get better and better.

Just to back up for one second, though-- you know, this is one of those issues that a company has a difficult time going it alone. What we really need to solve this issue is greater government regulation. And you know, we've been working hard to lobby for greater regulation in various parts of the world.

We need companies to work together to develop scale in recycling systems so that the economics get better. And a certain amount of consumer awareness and education is really important as well. All three of those things need to come together. And I do think it is going to increase costs, ultimately, at some point. But you know, I'm optimistic that with everybody working together and greater regulation, that, you know, this is not-- not only are we going to solve this issue, but the economics won't be that challenging.

AKIKO FUJITA: Fisk, what specific regulation are you talking about? What do you think has been missing from the conversation?

FISK JOHNSON: Well, the kind of regulation that we are advocating is extended producer regulations where, basically, it's an organization that is stewarded by the producers. There's a tax on the products, but that money goes directly back into collecting products and improving recycling systems. And that's the kind of regulation that we've been advocating.

Canada has some of those kinds of regulations. In many parts of Europe, they have those kinds of regulations. And we'd like to see more-- especially as we're increasing our own cost, we need to level the competitive playing field. And one way to do that is through better regulation.

ADAM SHAPIRO: Fisk, what kind of questions do you get from colleagues at other companies about social plastic?

FISK JOHNSON: Well, you know, I know a number of our other peer companies are, you know, promoting social and ocean-bound plastic. That is something I didn't mention with our Plastic Bank partnership. One of the beauties of that program is that it, you know, really improves the income of the people that collect this plastic.

You know, this is happening in some of the most impoverished areas of the world. And through this program, we can double or more the income of some of these folks. There is a great social benefit, there's a great environmental benefit, and certainly, the ocean plastic pollution and the impact that that's having on the health of our oceans' ecosystems is an enormous existential, you know, threat to life on this planet, both in the ocean and human life, because that plastics getting in the food chain in the oceans are so critical to life across the globe.

AKIKO FUJITA: Bottom line, though, Fisk, what does this mean from an operational standpoint for SC Johnson? We've heard so many companies talk about the value risk that comes with threats coming from climate change. I mean, you're a private company.

You're not necessarily having to open up the books, so to speak, to really detail what the threats are there. But what's driving that decision? And what does it mean in terms of how your company has to evolve?

FISK JOHNSON: Well, what's driving the decision is that, you know, we've had a long history as a company that dates back to my great-great-grandfather working for a better world. It's been part of our DNA for five generations. It's part of who we are.

My dad was a, you know, real sustainability advocate. This is something that we've been working on for decades, both on the carbon front, the plastic front, the chemical front. And it's just part of who we are as a company.

We do have the advantage of being private. And we can think about doing what's right for the long-term as opposed to next quarter's earnings. And that's a great advantage for us from a sustainability standpoint, because we can think out 10, 20 years and do the right thing. On the plastic front, it's exactly that-- you know, we can accept costs today knowing that it's the right thing for the long-term, where it's maybe a little bit more difficult for public companies to deal with those kinds of issues.

SEANA SMITH: Fisk Johnson, Chairman and CEO of SC Johnson, thanks so much for taking the time to join us today.