Getting around the world of environmental sustainability in businesses is no small topic. Many large and small organizations are guilty of significantly polluting the environment and engaging in practices that are simply not sustainable. However, there are an increasing number of businesses that are committed to reducing their damaging impact and even working towards having a positive influence on environmental sustainability, people and society. And there are some good reasons to do so. A recent article in the Flemish newspaper de Tijd stipulates the positive impact of sustainable entrepreneurship. If we take a look at the Fortune 100 Best Companies To Work For we can see that these had a 22% increase of income in the last years of the financial crisis (Fortune 100). In the light of the UN SDG’s, sustainable business-models can create more than 380 million jobs in 2030 (Business & Sustainable Development Commission). Further research shows that 7 out of 10 people finds it important the corporations take action in orde to make a positive contribution to society, environment and people (GfK). More than 60 new market opportunities are the result of the SDG. The total value of the market opportunities are estimated on 12 000 billion dollar (World Economic Form).
However, to understand and value the great efforts more and more businesses in and around Antwerp do. We started from the beginning by reading a book by Ray C. Anderson, a frontrunner in the sustainable movement for enterprises.
Because Anderson made us think. Instead of discussing and interviewing several regional company’s large and small. We first wanted to give you an insight in the book, an insight in his Anderson world by sharing our literature review with you. And we hope we can help him to achieve the purpose of writing it: be amazed, let yourself get triggered, (over)think.
MID-COURSE CORRECTION: TOWARD A SUSTAINABLE ENTERPRISE: THE INTERFACE MODEL (Ray C. Anderson):
The world heating, pollution, etc. It has been a topic of discussion and interest for many years. Countless studies show how our earth is affected by our society. Still people slide them of the table for various reasons: some don’t believe them, feel those studies are manipulated, others say it’s not that worrying and some feel their efforts wouldn’t change a thing.
Ray C. Anderson approaches this topic differently. He doesn’t list various facts to end with a conclusion, it isn’t an attempt at scientific rigor. No, his approach comes from his life experiences and discussions, it’s a personal perspective. Ray C. Anderson speaks about sustainable enterprises.
Ray C. Anderson was the founder and CEO of Interface Inc., a world leading carpet manufacturer. In 1994, after he read The Ecology of Commerce written by Paul Hawken Ray Anderson was left behind with a new perspective. After realizing how much damage he and his company did to the earth. Therefore he founded a new taskforce inside Interface. Their goal was to generate and implement a new vision, a vision of a cyclical, closed loop enterprise. Reduce, reuse, reclaim, recycle, redesign. He wanted the company to stop producing waste, stop taking from the earth and ultimately start to give back. Cyclical, it’s nature’s way.
In his book Anderson describes himself and all other company’s in their present form and their CEO’s as “a plunderer of the earth”. But not by our civilization’s definition; by our civilization’s definition, he -and all of them- is a captain of industry. In the eyes of many people, they are the modern day hero, entrepreneurs who founded a company that provides jobs.
Yes they all pay fair market prices for every kilo of material they buy. But does the market’s price cover the cost? The market, in its pricing of exchange value without regard to cost or use value, is, at the very least opportunistic and permissive, if not dishonest. Oil is the best possible example. It took the earth centuries to produce a limited amount of the black gold. And still it is so cheap that we can afford to use and spill it everywhere. The price is not a representation of it’s natural value.
This cannot go on indefinitely, can it? No, Anderson believes in a in a next truly revolutionary industrial revolution. This time, to get it right, we must be certain it attains sustainability.
Do well economically by doing good for the planet is one of the central ideas from Anderson’s model. How is this possible? He believes in three key ways: first by earning business through customers goodwill – be genuine, be honest. Second, through achieving resource efficiency that lowers costs. And the third way is by setting an example that other businesses cannot ignore, so that other companies feel compelled to follow the example.
Technology is an important component of Anderson’s plan. He likes to refer to the environmental impact equation developed by Paul and Anne Ehrlich; I = P x A x T (where I is the environmental impact, P is the population, A is affluence, and T is technology). In this equation however technology is part of the problem, an increase in T results in a worse environmental impact. But to Anderson that is the technology of the first industrial revolution, call it T1.
He rewrote the environmental equation into I = (P x A) / T2.
T2; the technologies of the next industrial revolution. Where technology focuses on renewable, rather than extractive; cyclical (cradle-to-cradle), rather than linear; solar-or hydrogen-driven, rather than fossil fuel-driven; focused on resource productivity, rather than labor productivity.
These technologies and others are combined in the model for the prototype company. The technology of the new industrial revolution will focus on five big things: solar energy, closed loop recycling, zero waste, harmless emissions, and resource-efficient transportation. All of these supported by and supporting the cyclical, cradle-to-cradle economy and communication between businesses and communities. A company achieving success in all these areas would be truly sustainable; environmentally, socially and economically.
The question now became: who / what will drive technology (T) from the numerator to the denominator? Anderson’s answer is frankly simple: by getting the prices right. That means tax shifts, new instruments such as tradable emission credits, to make pollution cost the polluter, a carbon tax. It means eliminating the perverse incentives and getting the incentives right for innovation, correcting and redressing the market fundamental dishonesty. But what in turn will drive the creation of tax shifts and other politically derived financial instruments? When the marketplace, the people, show their appreciation for these ethical values and vote with their pocketbooks for the early adopters, the people will be leading; the “good guys” will be winning in the marketplace and in the polling booth; the rest of the political and business leaders will have to follow. “Show me a parade and I’ll gladly get in front of it.” So will business and industry respond to the demands of this new marketplace, and Earth will gain a reprieve.
At Interface Anderson started to integrate these technologies early on. They called there effort QUEST – Quality Utilizing Employees’ Suggestions and Teamwork. What they did was reviewing every proces happening inside and outside Interface to produce carpet. From transporterrors to the de-materialization of the carpet. Within that principle Anderson launched a reinvented commercial system, where carpet didn’t need to be bought or sold at all. The Evergreen lease. This is a perpetual carpet lease in which Interface produces carpet made with recycled materials. Leasing carpet and being responsible for it cradle-to-cradle, is the future and the better way according to Anderson. Because the company keeps responsibility they will make sure the carpet lasts longer, is highly recyclable, … it’s seen as a raw material to use again and again.
Another program Anderson introduced is called EcoSense. It’s focused on those other four major technologies of the future. Also known as the search for God’s currency. Because it’s a big step to zero waste, zero pollution,… They invented a scale of what is less damaging, they tried to measure the true cost or value. And by using this scale try to get closer to their goal.
His book was only published in 1998, when Interface’s transformations where already put in place. Although only for about three years, the efforts where already visible. The amount of material extracted from the earth was significally less while the revenues increased. On that basis, we can conclude the program is effective. Or can we?
In his book, Anderson measures sustainability – of Interface – in pounds of resources per dollar sales. The problem by using this equation is the financial factor, ‘per dollar sales’. This means their work seems more sustainable when the product prices increase. Anderson even admitted that they started to charge more for what they sell. By doing this the reader and more important, the writer and the people at Interface have or had a distorted view of reality. Their efforts where certainly paying off, even without the rose-tinted picture of the chosen equation.
What Anderson wanted to do with his book is make people think. Not specifically entrepreneurs, it’s for every reader. The book focusses even more on the emotions then the economical or technical factores. He doesn’t describe any technical part of how they handled with certain interventions. Because he doesn’t want to, he doesn’t want to prove anything, he doesn’t want to be scientific. The reader is warned in the beginning of the book -and this review-, the book is written from a personal perspective. It’s mainly his synthesis of the works of others, how their insights, convictions and inspired thinking shaped Anderson’s attitude towards earth & ecology.
The chapter ‘The prototypical Company of the 21st Century’ does describe schematically how he looks at the future for enterprises and how it can be build up. For the average reader this isn’t the most appealing part of the book. If so i recommend to fast forward to the next chapters, especially ‘To Love All the Children’. There Anderson is telling a story of what happend when he shared his experiences followed by a workshop to a divers group of people. It includes a poem what concludes the chapter, and in fact even the whole book. (see below).
Taking everything into account Anderson provides a meaningful picture of what companies should strive for as they look to the future and what changes will be needed in order to preserve our natural resources, planet and its people. Government policy and investment in research and new technologies are discussed as point of high importance.
Anderson’s story, ideas, vision and determination are truly inspiring. The reader is left with no doubts about his intentions to do everything that he can to make interface sustainable and in the mean time send a message. He sought to set an example for others years before sustainability began to receive the level of attention that it has now. His action and vision should be commended and his book recommended.
By Thomas Delanote (email@example.com)