Air Date: Week of November 27, 1998
Steve Curwood speaks with Ray Anderson, author of a book called "Mid-Course Correction: Toward a Sustainable Enterprise". It’s about his personal and professional march toward the next industrial revolution; one towards sustainable, even restorative business practices . Mr. Anderson is Co-Chair of the President’s Council on Sustainable Development, and the founder and CEO of Interface, Incorporated, which had over a billion dollars in sales last year of carpets, flooring, and fabrics for commercial interiors. Mr. Anderson says industry must make several major shifts, exploring new frontiers such as solar energy, zero waste, and harmless emissions.
CURWOOD: A company called Interface is the world's largest producer of carpets and fabrics for commercial interiors. In 1994, over 20 years after founding Interface, CEO Ray Anderson embarked on what he's called an eco- odyssey. It has been a journey to make Interface the first truly sustainable industrial company in the world. And, he says, sustainable is not quite enough. He also hopes that his company will be restorative, by giving back more than it takes from the Earth. Ray Anderson has just written a book called Mid-Course Correction: Toward a Sustainable Enterprise. It's about his personal and corporate journey toward the next industrial revolution. For this revolution to be truly revolutionary, Mr. Anderson says that industry will have to make several major shifts, like shifts to solar energy, zero waste, and harmless emissions. Ray Anderson joins me now in the studio. Glad you could come by today.
ANDERSON: Oh, thank you, Steve. Delighted to be here.
CURWOOD: I'd like to read a few lines out of your book okay?
CURWOOD: You say, "By our civilization's definition, I am a captain of industry. I am a kind of modern-day hero, an entrepreneur." But you say, "By my own definition I am a plunderer of the Earth and a thief." Could you explain those statements?
ANDERSON: When I first asked my technical people to analyze what we and our suppliers together had taken from the Earth to produce our sales in 1994, I learned that we had taken 1.224 billion pounds of earth, stored natural capital. And we're tiny, we're just tiny in the grand scheme of things. And I realized what a hellacious contribution our little company was making. And I convicted myself at that moment as a plunderer of the Earth.
CURWOOD: This is a crime against nature, huh?
ANDERSON: A crime against nature.
CURWOOD: What prompted you to do this inventory in 1994?
ANDERSON: Well, I had been asked to make a speech that I didn't really want to make. Our customers were asking our salespeople, "What's your company doing for the environment?" Our salespeople didn't have good answers, and they asked the manufacturing people who asked the research and development people, and none of us had good answers. And our R&D people decided to convene a task force and bring people together from all of our businesses around the world to assess the company's worldwide environmental position. And they asked me to give that group a kickoff speech, to give them an environmental vision. And I didn't have one. So I was sweating with what to say to that group, when I read Paul Hawken's book The Ecology of Commerce. And it was a convicting experience. I've described it as a spear in the chest. And from that reading flowed not only that speech, which stunned that little group of people and set us all on a course that has -- I've described it as a pebble in a pond, that's grown into a tsunami -- that led to analyzing what we were taking from the Earth.
CURWOOD: What was Paul Hawken's message? What did you hear from Paul Hawken?
ANDERSON: Well, that every life support system that comprised the biosphere is in decline. That's the first message. Second message is that business and industry is the biggest culprit in this. And the third message is that only business and industry is large enough, pervasive enough, wealthy enough to lead our civilization away from the abyss toward which we are hurtling.
CURWOOD: What would you say are the top goals of Interface?
ANDERSON: Well, we have an immediate purpose, which is of course to make a profit, to stay in business. But we have, beyond that immediate proximate purpose, an ultimate purpose. And that ultimate purpose might well be to invent the next industrial revolution. We want to move away from product dependence, more toward service. So we've created something called The Evergreen Program. Under an evergreen leafse, our customers don't have to buy the carpet. We retain ownership of the product. And we retain that liability for the product at the end of its useful life, intending to convert that liability to an asset by closing the loop and giving those products life after life.
CURWOOD: Well, perhaps some businesspeople listening to us, investors, would say, "Mr. Anderson has some nice, you know, sort of pie-in-the-sky ideas, but how do you pay for it?"
ANDERSON: We began this whole effort by concentrating on waste and driving waste out of our business. In the process, the 3-3/4 years we've been at it, we've saved $77 million. I mean real money, hard dollars, and that's paying, really, for the rest of this revolution that we're engineering. The share price has moved up as earnings have moved up, so our shareholders have fared well in all of this.
CURWOOD: How is Interface responding to the threat of climate change?
ANDERSON: Well, we recognize it to be real. So, we've undertaken to reduce emissions, to reduce the use of fossil fuels. In fact, in our waste elimination effort, we've declared all fossil fuel-derived energy to be waste. Consequently, we focused on energy efficiency to reduce that usage to its minimum. And then we've begun to invest in photovoltaics as a renewable source of energy, a very modest investment to this point. But we are about to produce the world's first solar-made carpet. And when I ask audiences with interior designers and architects, "Would you specify solar-made carpet?," every hand in the room goes up. So I know that this will sell. And nobody will really care that the electricity costs a little bit more.
CURWOOD: So, what is a solar carpet? Is it something that you make with machines powered only by solar electricity?
ANDERSON: Yeah, we're harnessing that fusion reactor, that marvelous fusion reactor that's just 8 minutes away at the speed of light. Harnessing that current solar income.
CURWOOD: But you say it'll cost you more to do this than if you were to just buy it from the local power company.
ANDERSON: In the beginning it will. But in time, as the usage of photovoltaics increases, the cost will continue to come down. They've come down orders of magnitude from the inception of solar voltaics years and year ago. One of these days they will be competitive with fossil fuels. That day will come sooner if our Congress could just adopt an enlightened tax policy and begin to get the prices right on that barrel of oil. When the price of a barrel of oil reflects its true cost, I mean, for example, the cost of military power projected into the Middle East to protect the oil at its source, it's not reflected in the price of a barrel of oil any more than cancer is reflected in the price of a pack of cigarettes. The market is good at establishing price but seems to have no notion of cost. So the market needs to be constantly redressed to keep it honest. That honest marketplace will facilitate this whole move toward sustainability.
CURWOOD: In America there is this tendency for companies to want to get bigger and bigger and bigger. Do you have any desire or interest in doing that yourself?
ANDERSON: We've grown by acquisition over the years. And we intend to continue to grow. And I think that even in a no growth world it's possible for the resource-efficient company to grow. It will grow at the expense of the resource-inefficient competitor. I mean, that's Nature's way, is it not?
CURWOOD: In this process of converting to a more sustainable company, what was the moment where you had the biggest doubts? When did you wonder if you were maybe nuts?
ANDERSON: After that kick-off speech. I talked for a year to our people every chance I got. And there was a lot of skepticism. Was this the program of the week, the program of the month? Was Ray convinced about this? Was this for real? Had he gone 'round the bend? And I said well, yeah, you know I've gone 'round the bend to see what's there. Come on, this is what's 'round on the other side. And gradually people began to come aboard, one by one. And then after about a year, we began to gain traction.
CURWOOD: So how far have you been able to go toward your big goals of, what, you want zero waste, you want closed-loop production?
ANDERSON: Well, we've taken a macro view of that and gone back to that original calculation. And we've seen that number decline in 3 years, from 1.55 pounds of stuff, natural capital, per dollar of revenue, to 1.20 pounds of stuff per dollar of revenue. That's a 22-1/2% improvement in resource efficiency. So if you begin with the presumption that we were 100% unsustainable in 1994, which is a base year for us in this whole effort, we would say that we're now 22-1/2% of the way. That's just the foothills, though, of the mountain. And the real part of the mountain looms ahead. But when you get all faces of that mountain climbed, we'll be at that summit, from which the view, I think, will be wonderful. That's the view I want to live to see.
CURWOOD: I want to thank you for taking this time with us today.
ANDERSON: Oh, I've enjoyed the conversation. Thank you.
CURWOOD: Ray Anderson's recent book is called Mid-Course Correction. He's co-chair of the President's Council on Sustainable Development and founder and CEO of Interface, Inc., which had over a billion dollars in sales last year.
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