ESG Investing in the Cleaning Industry: Building a Sustainable Portfolio

Introduction: The Rise of ESG and the Green Cleaning Revolution

Environmental, Social, and Governance (ESG) investing has emerged as one of the most significant investment trends of the 21st century. As investors seek not just financial returns but also positive impact, industries that align with sustainability goals have seen increased attention. Among these, the cleaning industry stands out due to its direct impact on health, the environment, and workplace standards. In this article, we explore how ESG investing applies to the cleaning sector, examine trends in green cleaning technologies, and outline strategies for building a sustainable and profitable portfolio.

Understanding ESG Investing

ESG investing—short for Environmental, Social, and Governance investing—has emerged as a powerful strategy for aligning investment decisions with values-driven outcomes. Rather than focusing solely on financial returns, ESG investors also assess how companies perform in key areas that affect the planet, people, and overall corporate integrity. In recent years, ESG criteria have gained immense traction across multiple sectors, including real estate, manufacturing, and increasingly, the cleaning industry.

Environmental Factors

In the cleaning industry, the environmental pillar of ESG investing primarily centers on how businesses reduce their ecological footprint while delivering essential hygiene services. Environmental performance can be evaluated through several metrics:

Eco-Friendly Products: Companies that replace toxic chemicals with biodegradable or plant-based alternatives demonstrate a strong commitment to sustainability. For investors, backing firms that innovate in green formulations—such as enzyme-based cleaners or non-VOC products — represents an opportunity to support both public health and environmental preservation.

Reduction in Water and Chemical Waste: Responsible water usage is a major concern in commercial cleaning. Top-performing ESG companies implement closed-loop water systems, low-flow technologies, and efficient dispensing systems to minimize waste. Chemical dilution control systems are another area of innovation where ESG-minded firms lead.

Energy-Efficient Machinery: The shift toward low-energy vacuums, automated scrubbers with intelligent sensors, and solar-powered equipment showcases how modern cleaning companies reduce their carbon footprint. ESG investors are increasingly drawn to firms that adopt such technologies as they align with broader climate goals.

Social Factors

The social dimension of ESG focuses on a company's impact on its workforce, customers, and community. In the cleaning industry—traditionally reliant on manual labor and often marginalized workers—strong social responsibility is both ethically vital and financially prudent.

Fair Labor Practices: ESG-aligned cleaning firms ensure fair wages, provide full benefits, and avoid exploitative contractor models. For investors, these companies often enjoy higher employee retention, fewer lawsuits, and better reputations.

Worker Safety: Handling cleaning agents, operating machinery, and working in challenging environments carry significant risks. Leading companies invest in PPE (personal protective equipment), safety training, and ergonomic tools. Investors see this not only as a legal compliance issue but also a marker of operational excellence.

Diversity and Inclusion: A diverse workforce and inclusive leadership structures signal a company’s long-term viability. Companies prioritizing equal opportunity and anti-discrimination policies often benefit from broader talent pools and stronger brand loyalty—attractive qualities for socially conscious investors.

Governance Factors

Governance evaluates how well a company is run. Investors look for operational transparency, ethical decision-making, and a strong system of checks and balances.

Transparent Operations: Cleaning firms that openly disclose their supply chain, labor conditions, and environmental impact tend to be more resilient and trustworthy. Transparency reduces regulatory risk and fosters investor confidence.

Ethical Supply Chains: ESG-focused investors seek companies that audit suppliers, avoid conflict materials, and source sustainably. In cleaning, this could mean sourcing microfiber cloths from certified factories or ensuring that raw chemical ingredients are not derived through exploitative means.

Accountability Measures: Internal governance mechanisms such as third-party audits, ESG committees, and whistleblower policies are increasingly considered best practices. Investors view these systems as protective against corruption, greenwashing, and reputational damage.

The Environmental Footprint of Traditional Cleaning

The conventional cleaning industry has long relied on methods and products that, while effective at sanitization, pose significant environmental and public health concerns. Traditional cleaning products often contain harsh chemicals such as ammonia, chlorine bleach, and quaternary ammonium compounds (quats), which can contribute to indoor air pollution and respiratory problems among both users and occupants of cleaned spaces. These substances frequently end up in wastewater systems, eventually contaminating rivers, lakes, and groundwater. The cumulative impact is a degradation of ecosystems and a growing concern over the safety of municipal water supplies.

Beyond chemical concerns, the methods used in traditional cleaning are also resource-intensive. Excessive water usage is common, especially in institutional and commercial settings where pressure washers, mop buckets, and floor scrubbers can waste hundreds of gallons per day. In drought-prone regions of the United States—such as California, Arizona, and parts of Texas—this level of water consumption is increasingly unsustainable. Furthermore, outdated machinery often lacks energy-efficient design, resulting in excessive electricity consumption and a higher overall carbon footprint.

Another overlooked environmental issue is the packaging of cleaning products. Single-use plastic containers, non-recyclable sprayers, and disposable wipes contribute heavily to landfill waste. Most traditional cleaning brands package their products in thick plastic bottles that are rarely recycled properly due to contamination or lack of access to recycling facilities. These plastics can persist in the environment for hundreds of years, adding to the growing global crisis of plastic pollution. For ESG-conscious investors, companies that continue to operate within this outdated model represent both an environmental liability and a reputational risk.

The supply chains that support traditional cleaning operations are also under scrutiny. Many of the chemical components used in older formulas are derived from petroleum-based sources, contributing to fossil fuel dependency and greenhouse gas emissions. Moreover, ethical issues surrounding the sourcing of raw materials and labor conditions within manufacturing facilities remain problematic for firms lacking transparency or third-party certifications.

ESG-minded investors are increasingly recognizing that companies entrenched in these traditional practices are not just environmentally harmful—they are also financially vulnerable in a marketplace moving toward sustainability. With growing consumer demand for green products, stricter environmental regulations, and rising utility costs, businesses that fail to innovate are at risk of losing market share. This has prompted a wave of investment in firms that prioritize reduced environmental impact, such as those developing concentrated, refillable cleaning solutions, water-saving technologies, and non-toxic chemical alternatives.

In essence, the environmental footprint of traditional cleaning practices is not merely a peripheral concern—it is a central issue in evaluating the long-term viability and ethical alignment of cleaning companies. Investors committed to Environmental, Social, and Governance (ESG) principles are seeking out businesses that actively reduce their ecological impact, align with climate goals, and contribute to the broader green economy. By divesting from outdated, pollutive operations and reinvesting in sustainable alternatives, ESG investors are helping shape a more responsible and resilient cleaning industry.

Investing in Green Cleaning Technologies

As global attention shifts toward sustainability and environmental accountability, the cleaning industry is undergoing a transformative shift. At the forefront of this transformation is green cleaning—a term that encompasses not only the use of biodegradable and non-toxic cleaning products, but also sustainable business practices, efficient resource management, and environmentally responsible manufacturing processes. For ESG investors, this evolving space presents a significant opportunity to generate financial returns while actively supporting a cleaner, healthier planet.

One of the most promising investment areas within green cleaning is companies developing plant-based cleaning agents. These firms are replacing traditional petrochemical-based formulas with ingredients derived from renewable sources such as coconut oil, corn starch, citrus, and soy. Unlike conventional cleaners, plant-based products break down more easily in the environment and pose far fewer health risks to users and building occupants. Brands like Seventh Generation, Method, and ECOS have helped pioneer this movement, but a growing number of startups are entering the market with innovative, high-performance formulations tailored for both consumer and industrial use. Investors can support these companies directly through venture capital or indirectly via ESG-screened mutual funds and ETFs that include sustainable consumer goods.

Another vital segment for green investment is the manufacture of energy-efficient and water-conserving cleaning equipment. Traditional commercial cleaning equipment often consumes large amounts of energy and water, but newer technologies are significantly more efficient. Companies developing advanced floor scrubbers, low-moisture carpet cleaners, and HEPA-filtered vacuums offer solutions that drastically cut resource use without sacrificing performance. Many of these machines now feature smart sensors that adjust water and chemical usage in real-time, reducing waste and operating costs. Investing in such manufacturers aligns with long-term ESG goals, as these tools not only help reduce environmental footprints but also meet the increasingly strict regulations placed on institutional facilities like hospitals, schools, and government buildings.

A rapidly growing and tech-forward opportunity exists in robotic and AI-enhanced cleaning systems. These autonomous or semi-autonomous machines are revolutionizing commercial cleaning operations in airports, malls, hospitals, and large office complexes. Equipped with real-time data analytics and resource-optimization algorithms, these systems use minimal water and energy, while also lowering labor costs and improving consistency. Some models, such as those from companies like Brain Corp and Avidbots, are capable of mapping spaces, identifying heavily soiled zones, and optimizing cleaning routes accordingly. Investment in this space offers dual appeal: sustainability through smart resource use and innovation through automation—two core ESG themes. Additionally, as labor shortages persist in sectors like janitorial services, demand for robotic alternatives is only expected to grow.

Beyond product and technology development, there are also attractive opportunities in service-based firms that embrace green cleaning principles. This includes commercial cleaning companies that commit to using certified green products, pay fair wages, and adhere to sustainable operating procedures. Investors may consider equity stakes or partnerships with such firms, especially those servicing LEED-certified or WELL-certified buildings, where environmental an d social responsibility are not just added values but regulatory requirements.

In conclusion, green cleaning technologies represent a dynamic and increasingly profitable niche within the broader ESG investing landscape. From biotechnology startups developing biodegradable detergents, to robotics companies optimizing cleaning operations with AI, the sector offers diverse entry points for investors seeking both impact and return. As regulatory pressure increases and consumers demand greener solutions, early investment in these innovations could yield substantial financial and societal dividends.

ESG Metrics in the Cleaning Sector

For investors looking to make informed and impactful decisions in the cleaning industry, understanding and applying measurable ESG (Environmental, Social, and Governance) metrics is crucial. Unlike traditional financial indicators, ESG metrics provide a deeper view into how a company operates with regard to environmental stewardship, employee welfare, and ethical governance. These metrics not only help investors identify businesses aligned with sustainable and responsible values but also serve as indicators of long-term resilience and profitability.

1. Carbon Emissions Reduction

One of the most critical environmental metrics for any industry, including cleaning, is carbon footprint. Cleaning companies contribute to greenhouse gas emissions through transportation, manufacturing of products, and operation of energy-intensive equipment. Investors should look for companies actively working to reduce their carbon emissions—whether through the use of electric or hybrid fleets, renewable energy adoption, or energy-efficient machinery. Reporting on Scope 1 (direct), Scope 2 (indirect from purchased energy), and Scope 3 (supply chain-related) emissions is becoming increasingly standard and provides a clear picture of a company’s environmental impact.

2. Percentage of Green-Certified Products

Another important metric is the proportion of a company's product line that is certified by reputable green standards, such as Green Seal, EcoLogo, or EPA’s Safer Choice program. These certifications indicate that products meet strict criteria for environmental safety, biodegradability, and toxicity. A high percentage of green-certified products reflects a company's commitment to sustainability and its responsiveness to consumer and regulatory demand for safer, non-toxic cleaning solutions. This metric also offers a competitive advantage in markets that prioritize health-conscious and environmentally sound alternatives.

3. Safety Incident Rates

Social responsibility in the cleaning industry goes beyond wages and benefits—it includes ensuring the health and safety of employees. The Occupational Safety and Health Administration (OSHA) maintains industry benchmarks for workplace incidents, and companies with lower-than-average safety incident rates often exhibit strong internal training programs, safer product use, and better equipment standards. A declining trend in workplace accidents is a positive indicator of a company’s culture of safety and risk management, both of which contribute to long-term stability and lower liability exposure.

4. Employee Retention and Satisfaction

Retention rates and employee satisfaction levels are powerful metrics that reveal much about a company’s social performance. High turnover often signals poor working conditions, inadequate pay, or a lack of advancement opportunities—factors that are red flags for socially conscious investors. Conversely, companies that report high employee retention and positive feedback through surveys or third-party platforms such as Glassdoor typically maintain ethical labor practices and invest in employee well-being. These companies often benefit from increased productivity, stronger brand loyalty, and lower recruitment costs.

5. Transparency in ESG Reporting

Governance practices are foundational to ESG performance, and transparency is key. Investors should seek companies that regularly publish ESG or sustainability reports using frameworks like the Global Reporting Initiative (GRI) , Sustainability Accounting Standards Board (SASB), or the Task Force on Climate-related Financial Disclosures (TCFD). Transparent reporting demonstrates accountability, highlights measurable goals and progress, and allows stakeholders to evaluate whether a company’s ESG practices are integrated into its core strategy or simply used for marketing. Companies with third-party ESG ratings from services like MSCI, Sustainalytics, or ISS offer an added layer of credibility.

Leading Companies in Sustainable Cleaning

As ESG investing gains traction across sectors, certain companies within the cleaning industry stand out for their leadership in environmental, social, and governance performance. These firms not only prioritize sustainability and ethical practices but also consistently report measurable results and strive to innovate in eco-conscious operations. Below are profiles of some of the most notable players:

Ecolab

Ecolab is a global leader in water, hygiene, and infection prevention solutions, serving industries ranging from hospitality to healthcare. The company’s commitment to sustainability is deeply embedded in its core mission: to conserve water and energy while improving public health outcomes. Ecolab's ESG performance is robust, with aggressive climate goals such as achieving net-zero emissions by 2050 and reducing water usage across its customer sites by billions of gallons annually. The firm uses its expertise to help clients minimize their environmental impact, and it publishes detailed sustainability and ESG reports aligned with international frameworks such as the GRI and SASB. For investors, Ecolab represents a stable, large-cap ESG play with both financial strength and ethical credibility.

Seventh Generation

A subsidiary of Unilever, Seventh Generation is a pioneer in the green cleaning product space. Known for its use of plant-based ingredients, biodegradable formulas, and sustainable packaging, the company has built a strong reputation among environmentally conscious consumers. Seventh Generation sets itself apart with a high degree of transparency, listing all ingredients on packaging and actively advocating for corporate accountability through campaigns and public education. Its ESG performance is reflected in product certifications from the USDA Biobased Program, Leaping Bunny, and B Corporation status. Investors looking for consumer-facing companies with clear ESG alignment often regard Seventh Generation as a model of ethical manufacturing and brand integrity.

SC Johnson

SC Johns on, a privately held company with a legacy dating back over a century, has emerged as a consistent ESG advocate in the home and cleaning products space. It is the developer of the proprietary Greenlist™ process—a science-based system that helps ensure product ingredients meet rigorous environmental and health criteria. The company has made substantial strides in packaging sustainability, committing to making 100% of its plastic packaging recyclable, reusable, or compostable by 2025. SC Johnson also supports human rights and workplace equity through initiatives focused on diversity and community engagement. Its regular sustainability reports, involvement in climate action coalitions, and innovation in reducing VOCs (volatile organic compounds) reinforce its position as a sustainability leader.

Diversey

Diversey , a key player in hygiene and infection prevention solutions for the institutional and food & beverage markets, has demonstrated a strong commitment to ESG. The company invests heavily in product innovation that reduces water consumption, energy usage, and packaging waste. It also integrates circular economy principles into its operations, particularly in its refillable and concentrated product formats that minimize environmental impact. Diversey's ESG strategy includes comprehensive training for customers and employees on safe and sustainable cleaning practices. Investors interested in the B2B cleaning segment may view Diversey as a promising company aligned with global trends in sustainable facility management.

Method Products

Another stand out is Method Products, known for its boldly designed, environmentally friendly cleaning products. Method places sustainability at the heart of its business, using 100% recycled plastic in packaging, formulating with non-toxic and biodegradable ingredients, and operating a LEED Platinum-certified factory powered by wind and solar energy. As a certified B Corporation, Method is held to high standards of social and environmental performance, transparency, and legal accountability. Its strong brand appeal and loyal customer base make it attractive to ESG-focused investors seeking exposure in the high-growth, values-driven consumer goods sector.

How to Build a Green Cleaning Investment Portfolio

Constructing a portfolio focused on green cleaning investments requires a strategic blend of ESG analysis, sector-specific knowledge, and long-term vision. Whether you're a retail investor or an institutional player, the cleaning industry offers scalable opportunities that align financial returns with environmental and social impact. Below are the key steps and strategies to effectively build a sustainable portfolio centered around green cleaning technologies and practices:

1. Identify ESG-Rated ETFs or Mutual Funds with Cleaning Sector Exposure

For investors seeking diversified exposure, ESG-focused exchange-traded funds (ETFs) and mutual funds offer a low-risk entry point. While there are few funds dedicated solely to the cleaning industry, many ESG-themed funds include companies from the broader industrials, consumer staples, and sustainability innovation sectors that touch on green cleaning technologies. Look for funds that score highly on Morningstar's Sustainability Rating or those that track indices like the MSCI ESG Leaders Index or FTSE4Good. Funds that include holdings like Ecolab, Unilever (Seventh Generation), or SC Johnson (if publicly listed in future IPOs) can serve as foundational components of a green portfolio.

2. Invest in Public Companies with Strong ESG Ratings

Direct equity investment in publicly traded companies known for their leadership in ESG and sustainability is a core strategy. Companies like Ecolab, Unilever, and Procter & Gamble (which owns eco -conscious brands) are excellent starting points. When evaluating these stocks, investors should review third-party ESG ratings from agencies like Sustainalytics, MSCI, and Refinitiv. Look for consistency in environmental performance, supply chain transparency, and commitment to carbon neutrality. Also consider their exposure to institutional ESG funds, as this indicates strong market confidence in their long-term sustainability strategies.

3. Consider Private Equity in Innovative Startups

Venture capital and private equity present higher-risk, higher-reward opportunities in the green cleaning sector. Innovative startups focusing on biodegradable cleaning agents, enzyme-based disinfectants, or smart cleaning robotics offer significant growth potential. Look for incubators, accelerators, or crowdfunding platforms that support cleantech or ESG-compliant ventures. Notable areas of interest include AI-enhanced cleaning systems, waterless sanitation technologies, and bio-based packaging solutions. These investments often offer greater ESG impact but require thorough vetting, as they may lack public transparency and liquidity.

4. Conduct Thorough ESG Due Diligence

Before allocating capital, it's critical to conduct robust due diligence focused on ESG compliance, financial fundamentals, and market scalability. Investors should evaluate:

Carbon footprint and emissions targets of the company.

Percentage of green-certified products and raw material sourcing.

Labor standards, health and safety records, and workforce diversity.

Governance structures, board diversity, and anti-corruption policies.

Sustainability reports, third-party audits, and long-term strategy disclosures.

ESG investing is not just about ticking boxes—it’s about understanding how deeply sustainability is embedded in the company’s DNA. Engaging with investor relations, reviewing annual ESG disclosures, and following third-party ESG watchdogs can help separate marketing spin from genuine commitment.

5. Balance Portfolio Risk with Long-Term ESG Trends

To maintain a healthy investment mix, diversify across market caps and ESG maturity levels. Pair established players like Ecolab with early-stage innovators to capture both stability and growth. Consider geographic exposure—some European and Canadian firms may have more aggressive sustainability mandates than U.S.-based counterparts. Rebalancing your portfolio annually based on updated ESG metrics and industry trends ensures ongoing alignment with your ethical and financial goals.

Conclusion: Profit with Purpose

ESG investing in the cleaning industry represents a rare intersection where ethical responsibility meets financial opportunity. What was once viewed as a niche or value-driven approach has matured into a mainstream investment strategy supported by measurable outcomes, market demand, and long-term economic viability. As consumers, corporations, and regulators alike prioritize sustainability, the cleaning sector is undergoing a transformation—one that investors can both influence and benefit from.

This article has explored the critical role ESG factors play in reshaping the cleaning industry, from the environmental advantages of biodegradable cleaning agents to the social impact of fair labor practices and transparent governance. The rise of green technologies, robotic automation, and eco-certification has not only improved the sector’s environmental footprint but has also unlocked new growth avenues for forward-thinking investors.

By identifying companies that integrate ESG principles into their core operations—whether through energy-efficient manufacturing, zero-waste packaging, or ethical supply chains—investors position themselves at the forefront of a revolution that is as much about values as it is about value.

The strategies outlined—from ESG-rated ETFs and direct equity in sustainability leaders, to private equity in high-impact startups—demonstrate that profit and purpose are not mutually exclusive. Instead, they can—and should—coexist, offering a pathway toward long-term, resilient returns that align with global goals for climate action and social equity.

In a world increasingly defined by environmental challenges and social expectations, ESG investing in the cleaning industry is more than a trend—it's a durable, strategic opportunity. For those willing to do the research, track ESG metrics, and stay informed about innovations and market shifts, the potential for meaningful financial gain is clear.