Sustainability: Totally Floored – The CEO who plans to change the world

Carpet and restoration don’t sound synonymous with saving the world. But Ray Anderson, founder and chairman of Interface Inc, the carpet manufacturing company he founded in the United States in 1972, doesn’t read it that way.

His business is, he says, “green building project”, and with it he aspires to create the first “restorative” company in the world. In other words, company that returns more to the world than it takes, by helping others to embrace and achieve sustainability.

Interface is the world’s biggest commercial carpet and interior fabrics manufacturer and leading provider of commercial flooring services. It holds 35 percent of the US$1.5 billion world market in carpet tiles. Anderson stopped briefly in New Zealand recently to address free public seminar on “sustainability by design” at Auckland University.

The relatively small turnout was perhaps an indication of New Zealand management’s reluctance to confront the realities of an emerging ecologically-driven business climate, but either way they missed rare opportunity to hear visionary speaker whose management strategies and practices are at the forefront of the corporate sustainability movement.

Despite the best endeavours of anti-Kyoto advocates, exponents of the sustainability regime like Anderson are gaining traction and winning the ear of an increasing percentage of policy makers. Instead of reneging on the challenges implied by the Kyoto Protocol, Anderson’s company has taken arms against carbon greenhouse gas emissions and cut them by 33 percent in less than six years.

In the book Natural Capitalism US ecologist, businessman and author Paul Hawken calls Anderson’s company the “leading innovator in what used to be called the carpet business”, reflection of how Interface is leading its industry into new era.

Anderson’s company is tackling what he calls “Mount Sustainability,” on seven fronts.
* Eliminate waste: eliminating the concept of waste, not just incrementally reducing it;
* Benign emissions: focusing on the elimination of molecular waste emissions. Eliminating waste streams that have negative or toxic effects on natural systems;
* Renewable energy: reducing the energy demands of Interface processes while substituting non-renewable sources with sustainable ones;
* Closing the loop: redesigning Interface processes and products into cyclical material flows;
* Resource-efficient transportation: exploring methods to reduce the transportation of molecules (products and people) in favour of moving information. This includes plant location, logistics, information technology, videoconferencing, email, and telecommuting;
* Sensitivity hook-up: creating community within and around Interface that understands the functioning of natural systems and our impact on them; and,
* Redesign commerce: redesigning commerce to focus on the delivery of service and value instead of material. Encouraging external organisations to create policies and market incentives promoting sustainable practices.

Anderson believes unequivocally in the case for sustainability and he says his company has gone further than any other enterprise in proving that “ecology first” pays. “When we measured ourselves against perfection [zero waste] eight years ago we found that 10 percent of our sales dollar, was going down the drain as waste so we set out to eliminate it. In six years we have cut it in half and in the process saved US$185 million. Real money – hard dollars,” he asserts firmly.

Anderson believes that once the first six fronts are accomplished – which he acknowledges is no mean task – the seventh is automatically achieved. He considers the “redesign of commerce” an essential part of the change paradigm business must undertake. Anderson also views existing commercial legislation and regulations as his company’s highest hurdle. “The current infrastructure subsidises unsustainable industrial processes. To make real progress, we will need the cooperation of governments and industry partners to shift taxation away from economic and social benefits – labour, income and investment – to detriments – pollution, waste, and the loss of primary resources.”

The model 21st century enterprise won’t take anything from the earth’s crust, won’t harm the earth’s biosphere, will be driven by renewable energy, and will incorporate circular processing in move away from the linear industrial-age model of “make, take, waste” production ethos.

Prevailing regulatory systems therefore “have no relevance” in Anderson’s ideal world. Companies that succeed in climbing Mount Sustainability will be “so far ahead of the regulatory system that [they will] render it irrelevant”. His company will, he believes, win market share at the expense of inefficient competitors rather than at the expense of the earth or future generations. “And as we win in the marketplace, the market shares shift, and the whole industry moves toward sustainability. As one company leads, an industry will follow.”

Carpets unravelled
Interface has developed an innovative approach to product development and service delivery. It sprang from realisation that the company was dumping thousands of tonnes of its flooring products into landfills. It responded by leasing rather than selling its carpets.

The company now manages the maintenance of its office floors, regularly replacing the 10-20 percent of tiles that suffer 80 percent of the wear. And materials used in manufacturing the tiles are reuseable. They separate into their components, fibre and backing, and each component is made into an identical new product. Paul Hawken estimates that together the initiatives multiply to “reduction in the net flows of materials and embodied energy by 97 percent”.

Manufacturing cost is also substantially reduced increasing the profit margin. Ray Anderson’s message to management contemplating the sustainability model is simple.

“Do something! It may be reduce waste little bit, it may be design something with less material, but do something. That is the first thing. Then do something else. All of sudden you will find that you are moving towards sustainability.”

To find out more about the Interface initiatives visit the website or the New Zealand site for company information.

Converts are key
Anderson believes the intellectual conversion of chief executives to understanding environmental change is the key to widespread organisational acceptance of sustainable management practices.

His own story began in 1973 when he started his own company which was, he concedes, “a success by anybody’s measure”.

“But for 21 years we did not give one dollar to the environment. We never gave it thought. Then in the summer of 1994, our customers began asking us ‘what are you doing about the environment?’ We didn’t have an answer.”

Anderson set up an environmental taskforce which in turn asked him to provide his CEO’s vision statement. He did some soul searching but realised he didn’t have one. In an “act of pure serendipity” copy of Paul Hawken’s book, The Ecology of Commerce, landed on his desk and things changed.

“I started reading it and was about third of the way through when it hit me like spear in the chest. The point of the spear was the phrase the ‘death of birth’ – species disappearing, never ever being reborn. I read it and wept. Hawken argues that if business doesn’t step up to the sustainability mark then it’s all essentially over. It is unusual to hear the CEO of billion-dollar company talk like this. But Anderson is clearly no ordinary CEO. Inspired by the realisation, he made commitment and declared that his company should “be the first one to get there [to reach sustainability]”. Then he decided: “Let’s go further and become restorative company.”

Critical to achieving the task was his company’s unique share struct

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