Imagine a reality where the environment and big business are dueling siblings, sustainability the proverbial stepchild to pollution’s firstborn. Both exist despite the other, but the businesses that dare to defy the old order by adopting better practices have done so against stacked odds. Behind every one of those companies is a team of players leading the charge for reform, influencing corporate behavior and challenging our notions of how a multi-billion dollar company should operate.
It usually starts with a seedling of an idea, a nugget of thought that gets teased out through trial and error. Such was the case at Interface, a modular carpet tile company headquartered in Atlanta, Georgia, where sustainability has been its mission since 1994. The impetus for change came not from any higher-up but from a discontented client in California that refused to do business with the company until it altered its practices to be more environmentally-friendly.
When word got to their founder and CEO Ray Anderson, he accepted the challenge and created a task force to access how the company could become more sustainable. Anderson read Paul Hawkens’ The Ecology of Commerce and “shamelessly quoted” the book at a company summit, says vice president of sustainability at Interface, Erin Meezan.
“What really resonated with him about that book was not the sort of negative situation in which the earth systems find themselves,” said Meezan. Hawkens’ argument was that “there are institutions that are large enough, innovative enough and powerful enough to address this, and those are businesses.’”
With the appointment of an “eco dream team” consisting of the sales force and a group of trusted advisers, Interface set out to achieve its Mission Zero goal by 2020 and cemented its commitment to zero waste, zero emissions and renewable energy. Company members thought the proposition sounded expensive and impossible to implement, a pipe dream with little in the way of working models to support it.
A Call for Change
The global nature of business and varying regulations make widespread change difficult to achieve. California, for example, has some of the most aggressive legislature in the country targeting climate change. Companies are bound by a certain code of conduct despite conflicts happening across the aisle. Those regulations don’t exist in the country at large or in offshore locations where the majority of mass manufacturing takes place, meaning operations vary drastically across state and country lines. For comparison, Interface’s outfits in Georgia have no access to renewable energy outside of Atlanta due to lack of government incentive. Designing sustainable practices around disjointed operations is a tricky proposition, but not impossible.
The World Wildlife Fund (WWF) debuted its Climate Savers Program in partnership with The Center for Energy and Climate Solutions in 1999, alongside then Senator John Kerry and climate editor at Think Progress, Joseph Romm. What started as an appeal to members of Congress changed tack once program leaders determined that industry reform was the more strategic move. The program attempted to do for climate change what the Global Forest Trade Network (GFTN) did for rainforests by protecting its investments in conservation areas throughout the Amazon, Congo and the Arctic.
“[The board] identified that climate is the biggest threat to our mission and that the only way we’re going to make progress on climate change is if we work with industry. And the only way we’re going to make progress with industry is if we really get technical about how to cut their carbon footprint,” says Matthew Banks, who has run the program since 2002.
As the climate and business manager at WWF, Banks helps draw up contracts with its partners and sets public emissions targets to encourage accountability. He thinks that California’s carbon target is commendable but doesn’t compare to countries like Sweden that have multiples policies in place governing everything from carbon tax to auto and home emissions.
One of the organization’s most high profile partnerships is with Coca-Cola, whose bottling portfolio and investments in renewable energy have netted over a billion in savings according to a 2014 sustainability report – up to $5 billion if you include vending efficiency and customer savings.
While the Climate Savers program has proven successful – even receiving a boost in business from the 2008 disbandment of a similar program run by the Environmental Protection Agency called Climate Leaders – a few companies either left voluntarily or were asked to leave. Banks says that WWF “is not in the business or naming and shaming,” but describes one situation in which a company was lobbying anti-climate change legislation.
The question remains whether businesses are undergoing these arrangements to boost their public image. The world still remembers the aftermath of the infamous BP oil spill on the Gulf of Mexico following its highly advertised Beyond Petroleum campaign. While “greenwashing” is an issue in the business world, Banks contends that companies involved with WWF have not done a great job of advertising their successes. Its partners have been reluctant to boast publicly, and especially hesitant to talk to the press, a trend Banks finds perplexing.
“Companies don’t want to be greenwashing the way BP did years ago … so there’s a lot of hesitation to go too far forward.” Some of the reasons are more political in nature, says Banks. “I think that based on how the political winds are blowing in this country, sometimes it’s useful and other times it’s not something that they want to put their foot forward on.”
Maybe these companies don’t want to find themselves in the position of having to defend their reputation if things go awry, as BP did in 2010. Or perhaps their hesitation has to do with the fact that corporate attitudes around the environment have not evolved all that much, that best practices arrived at through proven metrics still engender suspicion. It’s likely their reasons have as much to do with self-preservation as with not wanting to rock the boat too soon.
Getting to the Bottom Line
Long before organizations like Interface and its peers began pushing back against the idea of business at any cost, the concept of environmental accountability held little merit. Climate change was not recognized as the serious threat it is today and negative impacts like pollution were viewed as externalities, or the inevitable cost of doing business. Taking this message in stride, sustainability leaders understood that corporate attitudes around pollution would only began to shift when the case could be made that “sustainability makes business sense.”
Then senator John Kerry was one of the first to take this message to the media, expounding on the ways in which efficiency, waste reduction and investing in renewable forms of energy contributed to higher returns on investment and drove competition. That’s the concept behind WWF’s 3% Solution project. The project’s authors call it “the answer that businesses and sustainability stakeholders have been searching for.” The multi-point strategy breaks down in economic terms the incentives for businesses to cut their emissions by three percent and see their profit margins grow.
The report proposes measures to avert the 1.2 gigatonnes of CO2 that will have developed by the year 2050, rendering the earth’s temperature two degrees Celsius warmer. Such an increase in global temperature would set in motion a chain of global warming events including rising sea levels, coastal flooding and all manner of water related end-of-days scenarios. But the real supposition seems to be that if you can’t force the arm of corporations through either policy or threat of natural disaster, then it helps to speak in terms of the bottom line.
“A lot of the projects and levers that we talk about in the three percent solution would be enabled with some government incentives and a lot of those aren’t there. There are some, but not for the suite of different things we’ve described in the report” says Banks. In this case, the numbers must speak for themselves.
“Most companies are spending right around one percent of their [capital expenditure] to reduce emissions, that’s the average if you look at the data in the carbon disclosure project,” says Banks. “If we kick that up to three or four percent we can exceed the goal we’re talking about in this report.” That’s an average of three percent down to reduce emissions by three percent.
Conservatively, those numbers translate into savings of roughly $780 billion across eleven sectors (excluding power generation) in a decade and $190 billion in just one year. It’s WWF’s hope that the success of companies like Coca-Cola will help their message reach a critical mass.
Riding the Tails of Success
The best-case scenario arises when policy- and profit-driven incentives come together. Meezan recalls Interface’s campaign to reclaim used carpet nylon and backings that would otherwise find themselves in a landfill. “We’ve been advocates of working with state’s local governments on ordinances that would require diversion” she says.
Planting trees as carbon offsets is yet another way the organization has tried to stay carbon neutral. Meezan notes that “the vast majority of the materials coming into our system we don’t make and we don’t control so how can we drive progress around getting those to be recycled or bio based or back into the technical loop?”
She found a more effective approach was to use the promise of business as the dangling carrot guiding the carriage. Interface orchestrated a competition between yarn suppliers to produce yarn made from the best performing recycled nylon with the prize being the lion’s share of their business. They also discovered that the nylon used in their carpets was the same material used in commercial fishing nets. The first move spurred innovation and encouraged their suppliers to design a recycled product where none existed before. The second inspired their internal team to create Net-Works, a recycling program that redirects used nets to yarn suppliers and introduces them to the Interface supply chain.
The influence of one business’s behavior on another is the lever that keeps the wheels of innovation churning. Cheri Chastain works as the sustainability manager for Sierra Nevada and has witnessed the trickle down effect of big business operations on its smaller scale counterparts. She says that many of the milestones around sustainability and efficiency would not have been possible without the efforts of a bottling behemoth like Anheuser-Busch.
Chastain maintains that mass innovation was critical to the success of the sustainability movement. The cost benefit of installing equipment for CO2 recovery becomes unavoidable the larger an operation grows. Such economy of scale has enabled smaller breweries to take advantage of technology they wouldn’t have had access to otherwise. “[Large breweries] generate more material so they can find better recycling and better ways to market the outlets for them…there’s a lot of important research and technology that’s come out of those big brewers that has been really trickling down into the rest of the industry,” says Chastain.
Sierra Nevada’s timeline tell the story of its founder, Ken Grossman, a man with a taste for home brewed beer and an all-in attitude towards creating the world’s first micro brews. In many ways environmental sustainability was incorporated into the company’s core values from the beginning. As the operation grew to include state of the art brewing facilities, restaurants, a small cattle farm and the largest array of private solar panels in the nation, the company’s practices evolved along with it.
From water recovery, to packaging to the micro-turbine technology and solar panels that power their operation, the company has streamlined its procedures to the point of being almost entirely closed loop. One of their first improvements came in how they handled grain leftover from the brewing process. “These discards that we have from the brewery are not waste products, they’re resources. And if they can’t be a resource for us then they can be a resource for somebody else” says Chastain. Composting in particular goes a long way towards maintaining the grain rich ecosystem of their operation. In 2014, the company’s zero waste program resulted in 99.8 percent of solid waste being diverted from landfill.
Chastain sees the value of taking small steps to achieve great change. “Everybody wants to sort of focus on the big sexy stuff like solar panels or microturbines, which are cool…but composting is the easiest thing that people can do to reduce their environmental impact.” She admits that despite their success story, the company has not been great at sharing the news. And yet there’s no doubt that companies like Sierra Nevada have paved the way for their followers and will continue to shape the conversation around sustainability.
The Public Faces of Change
Business partnerships play a vital role in developing useful strategies for combating carbon emissions at the source. At the COP15 conference in Copenhagen, Denmark, Banks recalls that the CEO of Coca-Cola, Muhtar Kent, took out a full-page ad featuring the quote, “It’s time do more than mind our own business.”
Adopting better practices requires the cooperation of many and the understanding that no universal antidote or magic pill exists. Industry at large is not a monolith and it cannot function at full efficiency when the left hand doesn’t know what the right hand is doing. Matt Banks knows that lesson as well as anyone. The contracts and targets developed with WWF through its Climate Savers Program and 3% Solution depend on the type of infrastructure available and the margins for improvement. What worked for Microsoft with their internal carbon fee, or Johnson & Johnson with their capital relief fund may prove ineffective for a company with a different model of business.
Aside from the logistical challenges of designing a blueprint for companies across sectors, factions have developed between titans of industry: technology on the one hand and traditional manufacturing on the other. Banks calls on industry leaders on both sides to bridge that divide. It would certainly help to have a recognizable figure at the helm to galvanize the workforce from the top down “like an Elon Musk on one side and then Jeff Immelt on the other” says Banks.
Meezan explains that what was revolutionary twenty years ago won’t cut it going forward. “We realize in the last couple of years that even though 2020 was our goal post to be less bad, we’ve got to shift the organization now to doing more good” she says. Interface has taken that next step through their partnerships with local village communities at their offshore factories and through efforts to frame the conversation around contributing to the greater social good. Yet their efforts have just scratched the surface of the work that is left to be done.
After taking part in a film project to document Interface’s sustainable journey, Erin Meezan came away shocked at the level of candor and emotion on display by employees: “When I asked people about the mission and why it was important to them, no one really said ‘because I really get a chance of helping the company save money.’ They talk about their job having a deeper sense of worth because it isn’t just about contributing to the company making money, its something bigger.” Despite Mitt Romney and his ilk’s best efforts to convince the public that “corporations are people,” the many individuals that make up a company’s workforce support sustainability for reasons beyond profit.
Not all companies are at the level of Interface or Sierra Nevada, and playing catch up will require a commitment of time that is in increasingly short supply. Keeping global warming and the rise of ocean levels at bay is a time sensitive matter, one grounded in a desire to do more than “better.” As the bulk of businesses try to do less bad and a select few do better, the truly progressive have their sights set much higher.