Pushing the Limits Interview with Ray Anderson

"I want to ask the skeptics to make their case...What is the business case for destroying the life support systems of the Earth?...I want to hear it. How can you possibly defend a system that says it is cheaper to destroy the Earth than to take care of it?  What kind of system is that?"

After founding Interface in 1973 both revolutionizing the carpet and floor covering industry and growing the company into one of the world's largest interior furnishings companies, Ray Anderson took on a new challenge. In the wake of reading Paul Hawkens' book, The Ecology of Commerce, which discusses our systematic destruction of the planet and envisions a new approach for our corporations and our society, Ray received what he calls “a spear to the chest.” Since that time, Ray has been dedicated to transforming Interface into a sustainable company and providing leadership in a global effort by pioneering the processes of sustainable development. Finally, Ray and Interface have attained a host of prestigious roles and won many awards including co- chairing the President’s Council on Sustainable Development in 1997, and in 2001, the George and Cynthia Mitchell International Prize for Sustainable Development, the first corporate CEO to be so honoured.

JG:
What is a sustainable economy or a sustainable capitalist economy?

RA:
Capitalism is in trouble as long as it focuses only on financial capital without regard to natural capital. I don’t see longevity in any system that continually chews up nature to create products that end up as waste in a landfill or an incinerator. Until we substitute cyclical processes for linear processes and renewable sources of energy and materials for extractive non-renewable resources, we are on a downhill track. We live in a finite world, a finite biosphere. We cannot impinge on that infinitely.
   
In my book, Mid-Course Correction, I laid out the theories and schematics that apply to our company as we make that transformation from a typical company of the 20th century to the sustainable company of the 21st century. Until we learn to sever the links--the umbilical cord to Earth--for materials and energy, and [stop] dumping effluents into the biosphere, we are on that downhill track. The model is there. It means new technologies that largely don’t exist today, but we know what they must be. They must be cyclical and renewable and waste free, and benign. They must be focused on the productivity of all resources, not just labour productivity.

JG:
How can we have economic growth without increasing material consumption? 

RA:
It is a matter of necessity. Survival will drive us to insist on products and services that are produced sustainably. It is dependant on the marketplace and an aroused citizenry. Consumers must realize that consumption in itself is not the route to happiness. Happiness is to be found somewhere else and ever-growing affluence is not necessarily happiness. So that involves a change of attitude, but [the survival] instinct will drive this change.

JG:
What area we can apply this instinct to?

RA:
Energy is the most obvious I think. Moving to renewable sources of energy and substituting photons from the sun for barrels of oil. That’s the dematerialization of energy. The recycling of raw materials can result in the dematerialization of materials, in terms of virgin materials. We are seeing it in our own company. The carbon intensity of Interface is now down by one-third over the ten years that we have been pursuing this goal of sustainability. Of course, we still have two-thirds of the way to go, but we know what the goal is and we believe it is achievable.

JG:
You have said that if per capita car use in China were the same as the US, they would consume all of the world’s total gas production. Can China maintain its current means and rate of growth?
 
RA:
I don’t think China can do what China wants to do with existing technologies. And China has to leapfrog the west, particularly in energy and material usage. I think that is true about gasoline. So China has to find another way to move people and products that is different from how Americans do it.
   
Americans have to find another way, too. We are all in this together. I don’t think that we have to sacrifice prosperity. I just think we have to find another way. The technologies are the critical link. And that is the reinvention of the industrial system one invention at a time. Just the way that it grew out of one invention at a time, it has to be transformed one invention at a time.

JG:
Do we need to redefine prosperity and quality of life?

RA:
I would say that GDP is a very poor indicator of prosperity. When a child’s hospital expenses show up in the GDP, cleaning up the Exxon Valdez shows up in the GDP, there is something wrong with the GDP as an indicator of real prosperity.

JG:
What is the role of redistribution of wealth in a sustainable economy?

RA:
There is a real crying need to lift two-thirds of humanity out of abject poverty. Is that redistribution of wealth? I suppose it is. We surely have to find a way to create jobs for one billion people who are looking for work and cannot find it today. What kind of a system is it, that marginalizes two thirds of humanity and has half of the world’s population subsisting on $2 a day? There is clearly something very wrong with the system.

JG:
Warren Buffet has said that corporations need to pay more taxes. Do you agree?

RA:
I’d rather tax pollution than income. I’d rather tax waste than property. I’d rather see the tax system completely overhauled. Shift taxes to bad things and let up a little bit on the good things. We ought not to discourage the things we want to encourage and encourage the things we want to discourage. Perverse tax policies and perverse subsidies are a huge part of the problem.

JG:
How can a small or medium size enterprise who wishes to become sustainable, possibly pursue this goal when there is not a level playing field?

RA:
We undertook it on our own without one single change in any regulation or law. No one has had to level the playing field for us to get started. And it has been good business every step of the way.

JG:
What was your company’s market share when you began to undertake this process shift? 

RA:
Forty per cent of the world market in some product areas, and that has not changed. Maybe it has increased a bit, in fact, during recessionary times. When you have a receptive marketplace, you can do these things because your customers are asking for it and they are supporting your effort. Get your approach right: focus on cost reductions first, and then reinvest those savings in new technologies and the other facets of the mountain. Then you can really move that mountain [of sustainability] and reduce your footprint. And that creates even further credibility within your marketplace. In our instance, because we were focused on sustainability, our product development people went through a total shift in mindset and we are getting products today out of the product development effort that we would have never gotten without this focus on sustainability. So our products are better, our marketplace acceptance has been phenomenal, and the savings: our costs are down, not up. So it has been win-win-win! And there’s no end in sight as we move on towards the top of this mountain.

JG:
What do you think of Government regulation?

RA:
I think government regulation has been very important in bringing us to where we are today. And it has to continue to bring up the rear as corporations move voluntarily towards sustainability because it is the smart thing to do; it is the right thing to do. The regulatory process has to continue to prod the laggards and I think that it is an ongoing process to raise the bar. But it is a floor. It is not a ceiling. It has to be the floor. The regulatory process will always define the floor.

JG:
How will the capital markets react?

RA:
Financial analysts were skeptical at first, when what we were doing began to dawn on them. For a long time we only told them about the QUEST savings, the waste reduction. Who could argue with that? But as we revealed more and more of the strategy, skepticism grew until they came to NeoCon, the contract furnishings market held in Chicago every June. Every product we introduced at that market had some aspect of sustainability clearly incorporated into the product. The analysts came, and they listened to what we were saying, and they went away basically without comment. And two days later, having gone all through the marketplace, they came back to our showroom and said, "By God, we get it. You guys have started something." Everywhere they went, there was talk of sustainability, and that was like a watershed event for the financial community. They really could see our strategic and competitive advantage that we had developed almost in stealth.

I don’t think that we have to rely on socially responsible investors to make this transformation happen in the financial community. I believe that when a company like ours gets it right on all fronts, (the environmental front, the social equity front, etc), then the financial result will speak for all that. And the real bottom line is one bottom line. There is a better way to get to that financial bottom line. That’s the point. There is a better way to a bigger, wider profit.

JG:
If you could know the question to any question, which question would it be?

RA:
The single biggest question there is. Yeah, I would ask if there is a God that cares.

JG:
What is the biggest risk that could derail the sustainability movement?

RA:
There are skeptics everywhere, obviously. I want to ask the skeptics to make their case. What is the case for double-glazing the planet?  Give me the business case. And while you are talking about the cost of preventing global warming, please address the cost of not preventing it. Yeah, I’d like to hear what is the business case for destroying habitat for countless species? What is the business case for relegating a billion people to unemployment?  What is the business case for destroying the life support systems of the Earth? What is the business case?  I want to hear it.
   
How can you possibly defend a system that says it is cheaper to destroy the Earth than to take care of it? 

What kind of system is that?

Jordy Gold is a sustainability expert and columnist for Corporate Knights. You will find his work online at www.jordygold.com