Business can no longer operate from the perspective of short-term financial gain only. The world has become too complex, and social and environmental concerns now make financial profits at the expense of everything not only short sighted but dangerous. And we need only see the leadership debacles of an Enron, Worldcom and the recent Wall Street fiascos to see what selfish financial gain reaps on everyone. There is increasing support for the notion of a business triple bottom line: financial profits, social responsibility and sustainability.
Tim Sanders, in his book, Saving The World at Work, says "the responsibility revolution has arrived. It demands that companies make a difference to society," and the ones that don't participate risk becoming obsolete.
The Gallup Organization recently interviewed Ray Anderson, founder and chairman of Interface, Inc. and author of Confessions of a Radical Industrialist: Profits, People, Purpose--Doing Business by Respecting the Earth. Interface, the largest commercial carpet tile company in North America was originally, like most traditional carpet manufacturing companies, a high-input, heavy polluting industry that was damaging the environment. One of Anderson's employees one day gave him a book by Paul Hawken, The Ecology of Commerce, which caused Anderson to have an epiphany after reading it.
At the age of 60, Anderson decided to completely change Interface from its environmentally damaging practices and move to sustainability. Anderson said, "I wanted Interface, a company so oil-intensive you could think of it as an extension of the petrochemical industry, to be he first enterprise in history to become truly sustainable--to shut down its smokestacks, close off its effluent pipes, to do no harm to the environment and to take nothing from the earth not easily renewed by the earth."
Between 1996 and 2008, Interface cut its net greenhouse gas emissions by 71%, far beyond the Kyoto Protocol's standard. At the same time Interface's revenue from sales increased by 66%, expanding its profit margins substantially. Interface also reduced greenhouse gas intensity by 82%, wastewater stream pollution by 72%, landfill-bound waste by 78%, and total energy usage by 44%. Interface reached the apex of the Globescan's Survey of Sustainability Experts while at the same time saving the company $405 million. Since 2003, Interface has sold 83 million square yards of carpet with zero net global warming effect.
In the Gallup interview with Anderson, he said, "zero footprint seemed to me to be absolutely the right thing to do, and it quickly became smart business." Yet, Anderson says Interface is not yet sustainable. He makes a distinction between zero footprint and sustainability, saying sustainability is the top of the mountain that he is climbing. He believes in it passionately and plans to be there by 2020.
Anderson says the substantial costs to move toward sustainability are paid for by waste elimination, and using recycled materials. He says that environmental consciousness has become a competitive advantage for his company over others, which has translated into greater profits.
But what about the recession, hasn't that put a damper into efforts for sustainability? Anderson says no. "This is not about spending money. This is about competing on cost, product, people, marketplace and goodwill in the worst of times as well as the best. Today, we're winning the market share in the depths of this recession because of the commitment we've made."
Ray Anderson made a commitment to turn around one of worst environmentally damaging industries toward sustainability and make a profit while doing so. If that isn't a lesson for the other captains of industry, I don't know what is.
