WHEN INTERFACE Inc founder Ray Anderson sat his sales team down 15 years ago and told them the key to saving the planet was not just under their feet, it was also in the hands of the outside community, they asked him if he had lost his mind. The chairman of the Atlanta-based carpet maker hadn't. But he set the company on the climb towards a zero environmental footprint by 2020 and became a global role model in the process. "I just stunned them and amazed myself with this whole new challenge in my 61st year," he says. "I simply said, 'If Paul Hawken [author of The Ecology of Commerce, 1993] is right, and business and industry must lead, who will lead business and industry? Unless somebody leads, nobody will. Why not us?' They accepted the challenge."
Speaking to AFR BOSS on a recent visit, the man Time magazine named as one of its "heroes of the environment" in 2007 now says that achieving sustainability is not enough. The challenge for business is restoration: "How do we put back more than we take so that we do some good for the Earth, rather than just do no harm?"
Being restorative means leading others to sustainability. To date, Interface, founded in 1973, has had influential discussions with companies such as Walmart, Target and Lend Lease. Anderson has also created a for-profit sustainability consulting arm at Interface, called InterfaceRAISE.
"We know how to do sustainability," Anderson says. The company is building capacity "to be an enabler to other industrial companies that want to shorten their learning curves as they begin the move toward sustainability".
Anderson somehow cuts through the corporate green wash. He describes himself as "a recovering plunderer" and "a radical industrialist". He says he's "as competitive as anyone you know and as profit-minded as anyone you know".
Last year Interface made US$1.08 billion in sales, down from US$1.28 billion in 1998, but profitability over the past decade is up: Operating income was $US129 million in 2007 compared with $US90 million in 1998. But that doesn't reflect the extent of the reformation of the manufacturer.
The drop in revenues was due to the company slimming down its operations by exiting a range of businesses. It also reduced its debt and shifted non-corporate office segments toward using carpet tiles which have undergone a revival. The disposal of these operations led to Interface recording a statutory loss of $US10.8 million in 2007, but the company says that year was "a stepping stone". Its annual report comments: "Four years ago we were simply surviving. Today we are positioned to lead the modular category on a global platform." In plain English it means its carpet tiles are in hot demand.
Anderson notes: "The business model is turning out to be a better way to making a bigger profit. Profit margins have expanded, not contracted." He says the new model is better for the earth, better for our descendants and better for the shareholders. "It's a completely new paradigm."
Interface's business model includes exerting a powerful influence on its suppliers. As the world's largest carpet maker it now operates in more than 100 countries, employs more than 3700 staff and has a market capitalisation of more than US$700 million. In July 2007, its Australian operation, InterfaceFLOR, became the country's first 100 per cent carbon neutral manufacturing company. "This reduced footprint is reflected in every product the company makes anywhere on Earth, not just one here and one there," Anderson says. "This company is greening an entire supply chain."
Interface has become an exceptional innovator as a result. Anderson and his colleagues have researched deeply and sought advice and inspiration from many quarters including nature. The company's head of product development once sent the entire design team into the forest for a day to observe nature's design principles at work. They've adopted an approach of trying to mimic natural systems as much as possible, and this led to a new carpet tile called Entropy where no two were alike. An engineer drew inspiration from geckos being able to hang upside down from ceilings to create glue-less carpet. Traditional glue is a devilish source of volatile organic compounds, which contributes to poor indoor air quality. A carpet factory manager in southern California figured that a factory floor could generate electricity and set about inventing carpet with photovoltaics (which convert light into electric current). Interface has also created the carpet industry's first closed-loop carpet recycling system.
It's all a far cry from how Ray Anderson ran his company for the first 21 years of its existence. He says in those days he didn't give a second thought to what he was taking from the earth or doing to the environment. His retelling of his 1994 "spear through the chest" environmental epiphany has become an iconic piece of footage. It came after he was asked by customers what the company was doing for the environment and had no answers. It translated into a complete redesign of the company and to a revival in the carpet tiles the company sells.
In the 2004 documentary The Corporation, Anderson predicted that one day business people like him would be jailed for plundering the earth's resources. He delivered a similar message in the documentary The 11th Hour last year. If you search "Ray Anderson" on YouTube, it is obvious he has captivated global audiences. "Ray gets it - thanks for the epiphany," says one user. "Thank God for men like him," says another. At 75 years old he is brimming with energy. In addition to being executive chairman of Interface, he does the talk circuit, drives a Toyota Prius and has built an off-power grid vacation home.
Anderson has described the journey as climbing a mountain far higher and meaner than any Everest. He says it took about 50 speeches before people started to really take notice. The company set up an eco-advisory team, which includes some progressive thinkers such as author and environmentalist Paul Hawken, American natural sciences writer Janine Benyus and Swedish cancer scientist Dr Karl-Henrik Robert.
Interface's sustainability goal, articulated more than a decade ago, still stands: to eliminate any negative impact its companies might have on the environment by the year 2020. This goal, dubbed Mission Zero, has become a global branding initiative and has emerged as a competitive strength for its business.
Anderson says that if Interface can get its business right, it will never have to take another drop of oil from the earth. He estimates the company is half-way on its climb. In the past 12 years it has reduced its worldwide net greenhouse gas emissions by 88 per cent. Twenty per cent of its raw materials come from renewable sources, either recycled or bio-based. Water usage is down 79 per cent in its core business. Fossil-fuel-derived energy has fallen 45 per cent. Six of its 11 factories operate completely on renewable energy.
These initiatives are bringing Interface closer to its goal. However they take time to bed down and Anderson says we are running out of time. "The biggest flaw in industry is the underlying view of reality," he says. "It assumes the earth is infinite in its ability to supply this stuff to feed the industrial system and in its ability to absorb our waste. It's not."
SEVEN STEPS TO SUSTAINABILITY
Ray Anderson says that Interface thinks of sustainability as having seven "faces", and its approach offers a template for the entire industrial system.
1 Eliminate waste: there's "money to be saved from day one", just by attacking waste.
2 Eliminate emissions: remove substances from products, vehicles and facilities.
3 Use renewable energy: shifting to renewable sources for operating facilities.
4 Close the loop: redesigning processes/products using recovered/bio-based materials.
5 Resource-efficient transportation: moving people and products efficiently.
6 Sensitise stakeholders: creating a culture that integrates sustainability principles.
7 Redesign commerce: creating a new business model that demonstrates and
supports the value of sustainability-based commerce.
Fairfax Business Media
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