One CEO’s Trip From Dismissive to Convinced

1973:

Ray Anderson founds Interface as a joint venture with Carpets International Plc, a British company, to enter the emerging carpet tile market, emptying his personal savings accounts and drawing investments from friends. The company has one plant and 15 employees. As the father of two daughters, he says, “This was my third child.”

1978:

Stressing close relationships with customers as the driver of growth, company sales reach $11 million.

1983:

Interface reaches $80 million in revenues, completes initial public offering.

1987:

Revenues continue to grow from both existing operations and acquisitions, reaching $267 million.

1991:

During recession, Interface revenues fall nearly 7% to $582 million; company initiates cost cutting.

1993:

Sales rise to $766 million. In the first half of year, Interface completes three major acquisitions.

August 1994:

Anderson receives a handwritten note from Jim Hartzfeld, an associate in the company’s research division, saying that customers are asking what Interface is doing for the environment. “How should we answer?” Hartzfeld asks. The customers were architects and interior designers — people who wanted to “do the right thing,” says Anderson. “They may not have known what they meant by the question, but given the history and persona of the company, we couldn’t ignore the question. I said, ‘Let’s see what we are doing, let’s get some answers.’”

August 1994:

Anderson gives go-ahead for creation of environmental task force made up of employees from around the company and reluctantly agrees to give meeting’s kickoff speech on his environmental vision. “I didn’t have an environmental vision,” Anderson concedes. “I could not get beyond, ‘We obey the law,’ which wasn’t a vision.”

Casting about for what to say, Anderson receives a copy of a recently published book by Paul Hawken, the environmentalist and entrepreneur, titled The Ecology of Commerce, from the company’s regional sales manager. He describes reading it as a “spear-in-the-chest moment. I was 60 years old, and there was probably a subconscious sense of legacy working away in my brain,” he says. “What would this child of mine grow up to be? I took Hawken’s book seriously, especially his central point — that living systems are in decline and that the biggest culprit was the industrial system.” Anderson adds: “The problem is the way we make stuff, digging up the Earth, turning it into products that quickly become waste in the landfill or incinerator. It’s the fundamental mind-set that says, ‘Use it, take it, it’s all yours.’”

Anderson accepts Hawken’s critique and also his view that business is the only institution wealthy and powerful enough to turn things around. “I challenged that little task force to lead the company to sustainability and beyond, to make Interface a restorative company — to put back more than we take from the Earth, and to do good for the Earth, not just to do no harm.” This is a tall order for any company, not to mention one whose products and production methods are petroleum-intensive. How did the task force respond? Many expected Anderson would lose interest once he recognized the magnitude of what he was proposing. But he didn’t. “They thought I’d gone around the bend,” he says. “I was suggesting an absolutely new paradigm.” It involved “looking at the world through a wider-angle lens” and “analyzing our operations in what I call ‘God’s currency’ — the nonfinancial costs and benefits that accrue to the living world.”

January 1995:

Interface invites major suppliers to a “green the supply chain” meeting to talk about its goals. “I said to them, ‘It’s up to you, but those who come with us will get the business, and those who don’t won’t,’” says Anderson. “I’m told people left that meeting and rushed to call the home office saying, ‘They’re serious.’”

August 1995:

Anderson is invited to give keynote speech at the U.S. Green Building Council annual conference in Big Sky, Montana. “I counted the audience — there were 135 people.”

1995:

Company launches major effort to develop meaningful metrics in every area of business and sets goal to eliminate all harmful releases from smokestacks, effluent pipes or solid waste by 2020. Individual teams are charged with promoting change. During the first year, Anderson speaks to associates inside the company at every opportunity. “I’d talk about our environmental stewardship responsibility,” he says. But what did that mean in terms of overall changes in the company? As Anderson notes, “Nobody had written the book. There was no how-to book in existence — we were writing it as we went.

“One day I was making a speech,” Anderson recalls, “and I took a felt-tip pen and drew a mountain. I said, ‘That’s Mount Sustainability, and the point at the top symbolizes zero footprint.’ Then I drew a stick figure, and I said, ‘That’s us, we’re going to the top of the mountain.’” As Anderson explains, “We realized that, if you’re going to climb the mountain we called Mount Sustainability, you’ve got to figure out the mountain.”

As a company whose manufactured products depended heavily on petroleum, Interface commits to addressing three overarching issues: what the company takes from the Earth; what it makes with the energy and material it uses; and what it wastes along the way from oil wellhead to landfill.

1995:

Interface chooses waste elimination as the first big target. “We defined waste as a cost that doesn’t add value to our customers,” says Anderson. The idea was to take a portion of the savings and use it to fund other sustainability efforts within the company.

Even as the company forges ahead, there are major structural hurdles. “You realize there are huge technical challenges. The waste elimination effort — that’s pretty straightforward — the sort of thing we ought to be doing anyway.” But tackling other areas like emissions and energy consumption was a different story. “We had no idea what was coming into our factory, but what comes in will go out, either in the product or in waste or emission or effluents. And that’s a huge spectrum of stuff that needs to be understood and dealt with.”

The company’s Toxic Chemical Elimination Team sets ambitious goal of eliminating the need for filters by redesigning products and processes. “Filters only concentrate the pollution,” says Anderson, “and then what do you do? Throw the filters away? There is no ‘away.’” At the time, Anderson notes, no one knew how to recycle nylon or PVC. “No one was doing this anywhere in the world.” To head up the expanding technical requirements of the business, Anderson hires Mike Bertolucci, a Ph.D. chemist who had been a senior R&D manager at General Electric Co.’s plastics division.

1996:

Interface begins a series of energy-focused experiments to reduce its dependence on petroleum and carbon-based fuel, including a 127-kilowatt-peak photovoltaic solar array project in southern California. The company’s accountants argue against the $1.2 million investment, saying the payback period was too slow. But Anderson decides to go ahead. This allows Interface to introduce a popular new product line called Solar-made. As it turned out, Anderson says, “The payback was a slam-dunk.” And he learns a broader lesson: “There are unmistakable competitive benefits that come from not waiting. … When paradigms shift, early movers win.”

1996:

To offset the impacts of business travel, Interface introduces a program called Trees for Travel. Between 1996 and 2008, Interface plants more than 98,000 trees to reduce the impact of 191 million air miles.

1996:

Interface holds first meeting of what it calls its “Eco Dream Team,” made up of outsiders steeped in environmental issues. Among the early advisers are Paul Hawken, Amory Lovins, John Picard, William McDonough, David Brower, Karl-Henrik Robèrt and Bill Browning.

1996:

Anderson meets with a corporate customer in Los Angeles to explore the idea of leasing carpet as an alternative to selling it. Interface would provide and maintain the carpet while also maintaining and recycling it over the life cycle. The lease concept was — and still is — ahead of its time (for accounting, tax and budgeting reasons), notes Anderson. “But it opened a lot of doors that led to conventional sales, with a commitment on our part to take the carpet back at the end of its life.” For him, it represents an early example of how commerce can be redesigned.

November 1996:

Interface publishes what it believes to be one of the first corporate Sustainability Reports describing the company’s “road map to sustainability.” In it, the company lays out the Seven Fronts of Sustainability (later renamed the Seven Faces of Mount Sustainability). The report features a three-page centerfold documenting what happens as raw materials are converted to products and waste. By now, the company is involved in about 400 separate sustainability initiatives. Anderson observes, “It’s important to realize that nobody planned the Industrial Revolution. It evolved as opportunities to substitute fossil fuels and machinery for human and animal power multiplied.”

April 1997:

Company holds global sales meeting at the Grand Wailea Hotel in Maui, Hawaii, over objections of its own Eco Dream Team members. “They said, ‘That’s the worst message you can possibly send,’” recalls Anderson. However, one member suggests using the meeting to educate salespeople about the company’s commitment to sustainability. Anderson invites his board and more than 100 suppliers to attend.

1997:

Interface named by Fortune as one of the “100 Best Companies to Work For.” “We asked the Fortune people how we got chosen, and they said it was two things: our commitment to the environment and our commitment to training,” Anderson says. “Well, the fact was that all of our training was about the environment.”

Through its sustainability program, Anderson says the company “unconsciously injected a sense of purpose, higher purpose into our work force, and it had a galvanizing effect. We have people who never dreamed of going into the carpet industry, but they say, ‘We’re not here to make carpet, we’re here to make history.’”

The company’s environmental leadership generates business payoffs as well. When a Japanese manufacturer of modular homes bought 60,000 square meters of carpet for its headquarters, Anderson says, “We woke up to the fact that the goodwill of the marketplace is an incredibly important byproduct.” In fact, he adds, “Today, if you asked me about the business case for sustainability, I’d put goodwill at the top of the list.”

Early on, Anderson identifies another byproduct: the influence Interface could have on other companies. Although the company itself operates in a relatively small market, “we realized that if we could begin to move in a credible, demonstrable way toward sustainability, we might just influence other companies — even competitors — to move in that direction. From the very beginning, that was part of our vision.”

1997:

Pockets of internal skepticism remain. One nonbeliever is David Oakey, the principal product designer. Recalls Anderson: “When he first heard me talking about sustainability, he asked, ‘How many sheep were we planning to have, and where were they going to graze?’” But Oakey begins to see opportunities for product innovation. As an experiment, he redesigns a standard nylon carpet tile with one ounce (or 4%) less material — and sees no loss in quality. Studying the effect of using less material across the entire annual output, colleagues calculate that the energy not expended in the production of additional nylon (the so-called negawatts) was equivalent to what the company’s two Georgia production facilities would consume in six months. (At the time, E.I. du Pont deNemours and Co. said no customer had ever asked about the energy embodied in its products.) This experiment is the first step in an ongoing process to reduce energy inputs in products and throughout the entire supply chain.

1997:

Interface introduces carpet recycling program to divert old carpet made of nylon, PVC plastisol, polyester and latex from landfills. Although technologies for recycling are not fully developed, Anderson wants Interface to “live off of current energy income” rather than exploiting new energy reserves. Recycling efforts increase steadily in subsequent years.

1997:

President Bill Clinton appoints Anderson cochair of President’s Council on Sustainable Development.

1998:

Anderson publishes book titled Mid-Course Correction describing Interface’s efforts toward achieving sustainability. The book examines the seven faces of Mount Sustainability — everything from eliminating waste and using renewable energy to redesigning commerce to maximizing resource efficiency.

1998:

In the first three and a half years of its sustainability program, Interface cuts waste from its operations by 40%, saving $67 million. In tandem with waste reduction, there is an emerging interest in “biomimicry” — designing products inspired by patterns and processes found in nature.

2000:

Total savings from Interface’s zero-waste initiative since 1994 is $185.4 million. In the company’s 2000 annual report (titled “A Better Way to Bigger Profit”), the company states that sustainability is “an underlying corporate value, ensuring that every business decision is weighed against its potential impact on the economic, natural and social systems we touch.”

2000:

Inspired by biomimicry, company introduces a new line of carpet tiles that installs nondirectionally — reducing waste and allowing for easier installation. Flexible dye lots permit individual tiles to be removed and replaced at any time without disrupting the design.

2000–2003:

The industrial carpet industry shrinks by more than 30% in the wake of a series of shocks: Y2K (which diverted spending to IT); the dot-com collapse; and 9/11. Interface’s sales fall 17% to $924 million, forcing a 30% staff reduction.

January 2001:

Interface brings 125 managers to a three-day Atlanta meeting to plan response to business decline. “I sent out a long list of questions we were going to consider — everything I could think of,” says Anderson. “And I wanted everyone to come prepared.” At the conclusion, managers reaffirm commitment to sustainability. “People bought in one mind at a time — nobody dictated anything,” Anderson says. “They saw it wasn’t just the right thing to do but smart as hell. To a person, they said, ‘Sustainability is in the DNA of our company, and there’s no way we’re turning back.’”

2002:

Interface creates team to screen suppliers’ products and processes under a program Anderson calls “trust but verify.” As part of effort, company also begins examining its suppliers’ suppliers.

2003:

Interface begins using renewable gas produced by local landfill to provide power for one of its Georgia plants, resulting in savings over natural gas.

2004:

Following sale of the company’s contract deal network, total revenues decline to $881.7 million.

2004:

Interface receives Environmental Protection Agency’s Climate Protection Award for its environmental programs.

March 2005:

A group of managers from Wal-Mart Stores Inc. (led by Mike Duke, the current CEO) visits Interface’s LaGrange, Georgia, manufacturing facility to learn firsthand about the company’s experience with sustainability. After a second meeting with Wal-Mart managers, Anderson and Jim Hartzfeld are invited to speak to the retailer’s managers in Bentonville, Arkansas.

2006:

Responding to inquiries from business leaders, Interface establishes consulting business headed by Hartzfeld to help companies accelerate their own learning curves regarding sustainability.

2006:

Interface launches Fast-Forward 2020, an expanded training program for associates in Europe. For their final project, employees are required to study one aspect of the company’s sustainability strategy and develop detailed suggestions for how to accelerate progress.

2006:

Thanks to process improvements, the total number of BTUs required to produce a square yard of Interface carpet has declined by 44% from a decade earlier. Meanwhile, the company sends 64% less waste to landfill than it sent in 1996.

Interface employs a new technology developed in Italy for taking apart the components of used carpet in a clean, closed-loop process for remanufacture. Interface has diverted more than 102 million pounds of carpet from landfill since 1995.

2007:

Company calculates that its waste elimination efforts have allowed it to avoid costs totaling $372 million since 1995.

Through a new patent-pending technology called Cool Blue, company is able to recycle the most common types of nylon carpet and carpet backings into new nonvirgin PVC carpet tile backing. More than 25% of the raw materials used in carpet production are recycled or bio-based.

Interface becomes active buyer of used carpet for recycling. Increasingly, Anderson says, customers can’t imagine sending their carpet to a landfill. “As we get the old carpets back, we can salvage the nylon and work with our yarn supplier to put that nylon back into the new product. We’ve become a supplier to our supplier — that’s an interesting loop!”

2008:

Interface has a total of 10 facilities and operates in 110 countries, employing 3,500 people. Eight of the facilities operate with 100% renewable electricity. Company earns $117 million on worldwide revenues of $1.1 billion.

2008:

Anderson points to increased corporate spending on sustainability (specifically, GE’s $1.4 billion investment in R&D for clean technology) as broad evidence that actions by Interface and other innovators are having an effect on other companies. “When Jeff Immelt [GE’s CEO] makes that kind of investment,” Anderson says, “you know there’s not an ounce of altruism in it.”

2008:

Eighty-nine percent of Interface’s global electricity and 28% of its total energy comes from renewable sources. During the past decade, the company has shut down 33% of its smokestacks and 71% of its wastewater pipes from continuing operations. Compared with 1996, its greenhouse gas emissions are down 71% (82% relative to sales). The company diverted 43 million pounds of carpet and carpet scrap from the landfill, bringing the cumulative totals for this program to 175 million pounds since 1995.

2009:

“Our people are truly empowered,” Anderson says. “Particularly our technical people are charged with finding, inventing, scouring the world for the better way — whatever it takes to move the needle. The innovations come from them — it’s a self-generating process.”