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Home / Business / Companies / Manufacturing

How boss saw green light - and lifted profits

By Errol Kiong
NZ Herald·
1 Sep, 2008 04:00 PM3 mins to read

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KEY POINTS:

Ray Anderson, founder and chairman of global carpet manufacturer Interface, describes himself as a "recovering plunderer".

Speaking at the Better by Design CEO Summit in Auckland yesterday, Anderson talked of his crusade to transform his petroleum-dependent Atlanta-based company into a sustainable enterprise that seeks to never take another drop of oil from the earth.

The epiphany occurred when he was 60. The industrial company he founded was just over 21 years old. It had offices in more than 100 countries, manufacturing plants in four continents, and had survived three recessions.

His thoughts, at the time, were on retirement.

But the sales team started reporting customers asking "strange" questions, like: "What is Interface doing for the environment?" Two senior managers advised that the company needed to come up with an environmental policy.

Anderson agreed and set up a task force. But first, his employees wanted him to speak about his environmental vision.

"I had no environmental vision. In my whole life, I had never given a thought to what my company was doing to the earth."

With the address to his team drawing near, a book, Paul Hawken's The Ecology of Commerce, landed on his desk.

"Within 50 pages, I am a convicted plunderer of the earth. It is a spear to the chest."

That was August 31, 1994.

He found a whole new purpose in life. He became, he says, a "recovering plunderer".

Anderson challenged his task force to reassess the way the business was run, and set about climbing Mount Sustainability, something he describes as higher than Everest.

"There was no how-to book, we wrote our own."

Key to change was "rethinking". Plant equipment was redesigned to use less power, yet still maintain output.

Alternative energy sources such as sunlight and biomass were harnessed to "cut the fossil fuel umbilical cord". One of his Californian managers also developed the idea of using photovoltaic cells to utilise the state's sunshine in the making of carpets. The company accountant initially said no, but the manager did not give up, and talked to the sales team about the potential of "solar made carpets".

They also worked with a local authority to pipe methane 14 kilometres from a landfill to their factory. The public-private partnership was a win for everyone, said Anderson. Residents near the landfill no longer had to put up with the stench, the factory became climate neutral, and the city did not need to open a new landfill for another 15 years.

Today Interface is the world's largest commercial modular carpet manufacturer. Anderson said the move 14 years ago had already saved the company $372 million - and they've only captured half the potential savings.

Net greenhouse gas emissions are down 82 per cent on 1996 base line levels, yet sales have increased by two-thirds and profits have doubled. Fossil fuel consumption is also down 60 per cent per unit manufactured.

And Anderson said marketplace goodwill is stronger because of this. He hopes to get the company to "zero impact" by 2020, and estimates that it's halfway there.

When he announced what he intended to do 14 years ago, a competitor told him that it could not be done.

"If we can do it, anyone can."

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