Sustainable development, high profits, and good economics are mutually supportive of each other, the CEO of a leading manufacturing company told the Senate's Environment and Agriculture Budget Division, Wed., Feb. 24. Sen. Steven Morse (DFL-Dakota) chaired the hearing.
"We are myopically focused on financial capital, yet we ignore human and natural capital," Ray Anderson, of Interface Inc., said. The Atlanta based company is the world's largest producer of commercial floor coverings.
Anderson said that in 1994 he was asked to give a speech about his company's environmental practices. "I sweated over what I would say. When it came to an environmental vision I couldn't think of anything beyond complying with the law," he said. It was then that Anderson read "The Ecology of Commerce" by Paul Hawken, a book he said that forever changed his life. He said reading Hawken's book, a stark look at how business practices are destroying the Earth's resources, was "like a spear in the chest." He said the book convinced him his company had to act upon what he believes is "the crisis of our times."
Interface manufactures over 40 percent of the world's commercial carpet tiles, employs over 7,500 people, and has 33 manufacturing sites in seven countries. "By any conventional measure you would have to say Interface is successful, but not by every measure. We were terribly unsuccessful in one important area. We never gave one thought to what we were taking from the Earth," Anderson said.
He said the current environmental condition of the planet is disastrous. "We have polluted rivers, polluted and over-fished oceans, lakes dead from acid rain. We have forests that are dying, polluted crop fields, wetlands disappearing, aquifers depleted and farm lands that are toxicated. The ozone is stressed and in decline," he said, "There have been some improvements. You can now see across the street in Pittsburgh, and the Cuyahoga River no longer catches on fire."
Sustainable industrial development, Anderson said, means not only taking as little as possible from the planet, but putting back more than what is taken. He said that in order to begin to achieve this goal, Interface began working on a seven-step process. The first step was achieving zero waste by developing an internal reduction effort on eliminating product costs that don't add customer value. Next was eliminating emissions that have negative or toxic effects on the environment, and developing renewable energy sources by focusing on sustainable sources such as solar power instead of nonrenewable sources such as carbon based fuels. The plan also included "closing the loop" meaning redesigning products and processes for recycling, and using technology to increase the flow of information while reducing the distance people had to travel. Anderson said the final steps were creating a community that understands the value of natural systems and the human impact on them or "doing well by doing good," and focusing on delivery of value rather than on the delivery of material.
He said the company's use of the processes has led to improvements. In 1994 for every dollar of revenue earned, Interface consumed 1.59 lbs of natural resources, while in 1998 a dollar of revenue was equal to .94 lbs of natural resources used. He said Interface continues to explore environmental programs such as leasing carpet to its customers so the company better controls recycling. The company is also currently looking to develop a fabric that is more recyclable than the nylon used in most carpets, Anderson said.
Morse asked Anderson what role government could play in sustainable development. "Government has two roles, that of the carrot and that of the stick," Anderson said. He said that by ending government subsidies to businesses, incentives would be created to encourage businesses to seek ways to maximize their profits in other ways. Interface has increased its profits from securing business, despite submitting higher bids, with companies in support of sustainable development practices. "Government also has to continue its regulatory efforts to businesses that just don't get it. Creating a floor below which businesses are not allowed to operate," he said.
Anderson said while government has a key role in the process to better the environment, the business community is at the forefront of what must be accomplished. "The business industry must lead in pioneering the next industrial revolution. The first one is just not working," he said, "We have to learn to see the economy as a wholly earned subsidiary of the environment."