TED2009
Ray Anderson: The business logic of sustainability
Filmed:
Readability: 5.1
1,098,554 views
At his carpet company, Ray Anderson has increased sales and doubled profits while turning the traditional "take / make / waste" industrial system on its head. In a gentle, understated way, he shares a powerful vision for sustainable commerce.
Ray Anderson - Sustainable-business pioneer
Ray Anderson founded the company that makes covetable Flor carpeting. But behind the fresh design is a decades-deep commitment to sustainable ways of doing business -- culminating in the Mission Zero plan. Full bio
Ray Anderson founded the company that makes covetable Flor carpeting. But behind the fresh design is a decades-deep commitment to sustainable ways of doing business -- culminating in the Mission Zero plan. Full bio
Double-click the English transcript below to play the video.
00:18
Believe me or not, I come offering a solution
0
0
4000
00:22
to a very important part of this larger problem,
1
4000
4000
00:26
with the requisite focus on climate.
2
8000
2000
00:28
And the solution I offer
3
10000
2000
00:30
is to the biggest culprit
4
12000
2000
00:32
in this massive mistreatment of the earth
5
14000
4000
00:36
by humankind,
6
18000
2000
00:38
and the resulting decline of the biosphere.
7
20000
3000
00:41
That culprit is business and industry,
8
23000
3000
00:44
which happens to be where I have spent the last 52 years
9
26000
3000
00:47
since my graduation from Georgia Tech in 1956.
10
29000
4000
00:51
As an industrial engineer,
11
33000
2000
00:53
cum aspiring and then successful entrepreneur.
12
35000
4000
00:57
After founding my company, Interface, from scratch
13
39000
3000
01:00
in 1973, 36 years ago,
14
42000
3000
01:03
to produce carpet tiles in America
15
45000
2000
01:05
for the business and institution markets,
16
47000
3000
01:08
and shepherding it through start-up and survival
17
50000
3000
01:11
to prosperity and global dominance in its field,
18
53000
3000
01:14
I read Paul Hawken's book,
19
56000
2000
01:16
"The Ecology of Commerce,"
20
58000
2000
01:18
the summer of 1994.
21
60000
3000
01:21
In his book, Paul charges business and industry
22
63000
3000
01:24
as, one, the major culprit
23
66000
3000
01:27
in causing the decline of the biosphere,
24
69000
2000
01:29
and, two, the only institution that is large enough,
25
71000
3000
01:32
and pervasive enough, and powerful enough,
26
74000
2000
01:34
to really lead humankind out of this mess.
27
76000
4000
01:38
And by the way he convicted me
28
80000
3000
01:41
as a plunderer of the earth.
29
83000
2000
01:43
And I then challenged the people of Interface, my company,
30
85000
3000
01:46
to lead our company and the entire industrial world to sustainability,
31
88000
4000
01:50
which we defined as eventually operating
32
92000
2000
01:52
our petroleum-intensive company in such a way
33
94000
3000
01:55
as to take from the earth
34
97000
2000
01:57
only what can be renewed by the earth, naturally and rapidly --
35
99000
4000
02:01
not another fresh drop of oil --
36
103000
2000
02:03
and to do no harm to the biosphere.
37
105000
4000
02:07
Take nothing: do no harm.
38
109000
2000
02:09
I simply said, "If Hawken is right
39
111000
2000
02:11
and business and industry must lead,
40
113000
2000
02:13
who will lead business and industry?
41
115000
2000
02:15
Unless somebody leads, nobody will."
42
117000
3000
02:18
It's axiomatic. Why not us?
43
120000
3000
02:21
And thanks to the people of Interface,
44
123000
2000
02:23
I have become a recovering plunderer.
45
125000
3000
02:26
(Laughter)
46
128000
1000
02:27
(Applause)
47
129000
5000
02:32
I once told a Fortune Magazine writer
48
134000
4000
02:36
that someday people like me would go to jail.
49
138000
3000
02:39
And that became the headline of a Fortune article.
50
141000
2000
02:41
They went on to describe me as America's greenest CEO.
51
143000
4000
02:45
From plunderer to recovering plunderer,
52
147000
3000
02:48
to America's greenest CEO in five years --
53
150000
3000
02:51
that, frankly, was a pretty sad commentary
54
153000
2000
02:53
on American CEOs in 1999.
55
155000
5000
02:58
Asked later in the Canadian documentary, "The Corporation,"
56
160000
3000
03:01
what I meant by the "go to jail" remark,
57
163000
3000
03:04
I offered that theft is a crime.
58
166000
4000
03:08
And theft of our children's future would someday be a crime.
59
170000
5000
03:13
But I realized, for that to be true --
60
175000
2000
03:15
for theft of our children's future to be a crime --
61
177000
3000
03:18
there must be a clear, demonstrable alternative
62
180000
3000
03:21
to the take-make-waste industrial system
63
183000
3000
03:24
that so dominates our civilization,
64
186000
3000
03:27
and is the major culprit, stealing our children's future,
65
189000
3000
03:30
by digging up the earth
66
192000
2000
03:32
and converting it to products that quickly become waste
67
194000
4000
03:36
in a landfill or an incinerator --
68
198000
2000
03:38
in short, digging up the earth and converting it to pollution.
69
200000
5000
03:43
According to Paul and Anne Ehrlich
70
205000
2000
03:45
and a well-known environmental impact equation,
71
207000
3000
03:48
impact -- a bad thing --
72
210000
2000
03:50
is the product of population, affluence and technology.
73
212000
4000
03:54
That is, impact is generated by people,
74
216000
4000
03:58
what they consume in their affluence,
75
220000
2000
04:00
and how it is produced.
76
222000
3000
04:03
And though the equation is largely subjective,
77
225000
2000
04:05
you can perhaps quantify people, and perhaps quantify affluence,
78
227000
4000
04:09
but technology is abusive in too many ways to quantify.
79
231000
4000
04:13
So the equation is conceptual.
80
235000
2000
04:15
Still it works to help us understand the problem.
81
237000
3000
04:18
So we set out at Interface, in 1994,
82
240000
5000
04:23
to create an example:
83
245000
2000
04:25
to transform the way we made carpet,
84
247000
2000
04:27
a petroleum-intensive product for materials as well as energy,
85
249000
4000
04:31
and to transform our technologies
86
253000
2000
04:33
so they diminished environmental impact,
87
255000
3000
04:36
rather than multiplied it.
88
258000
3000
04:39
Paul and Anne Ehrlich's environmental impact equation:
89
261000
3000
04:42
I is equal to P times A times T:
90
264000
3000
04:45
population, affluence and technology.
91
267000
3000
04:48
I wanted Interface to rewrite that equation so that it read
92
270000
6000
04:54
I equals P times A divided by T.
93
276000
3000
04:57
Now, the mathematically-minded will see immediately
94
279000
3000
05:00
that T in the numerator increases impact -- a bad thing --
95
282000
3000
05:03
but T in the denominator decreases impact.
96
285000
4000
05:07
So I ask, "What would move T, technology,
97
289000
4000
05:11
from the numerator -- call it T1 --
98
293000
2000
05:13
where it increases impact,
99
295000
2000
05:15
to the denominator -- call it T2 --
100
297000
3000
05:18
where it reduces impact?
101
300000
3000
05:21
I thought about the characteristics
102
303000
4000
05:25
of first industrial revolution,
103
307000
2000
05:27
T1, as we practiced it at Interface,
104
309000
3000
05:30
and it had the following characteristics.
105
312000
4000
05:34
Extractive: taking raw materials from the earth.
106
316000
4000
05:38
Linear: take, make, waste.
107
320000
3000
05:41
Powered by fossil fuel-derived energy.
108
323000
2000
05:43
Wasteful: abusive and focused on labor productivity.
109
325000
4000
05:47
More carpet per man-hour.
110
329000
3000
05:50
Thinking it through, I realized that all those attributes
111
332000
3000
05:53
must be changed to move T to the denominator.
112
335000
5000
05:58
In the new industrial revolution extractive must be replaced by renewable;
113
340000
5000
06:03
linear by cyclical;
114
345000
2000
06:05
fossil fuel energy by renewable energy, sunlight;
115
347000
4000
06:09
wasteful by waste-free;
116
351000
2000
06:11
and abusive by benign;
117
353000
2000
06:13
and labor productivity by resource productivity.
118
355000
4000
06:17
And I reasoned that if we could make those transformative changes,
119
359000
4000
06:21
and get rid of T1 altogether,
120
363000
2000
06:23
we could reduce our impact to zero,
121
365000
3000
06:26
including our impact on the climate.
122
368000
3000
06:29
And that became the Interface plan in 1995,
123
371000
3000
06:32
and has been the plan ever since.
124
374000
3000
06:35
We have measured our progress very rigorously.
125
377000
4000
06:39
So I can tell you how far we have come in the ensuing 12 years.
126
381000
4000
06:43
Net greenhouse gas emissions
127
385000
2000
06:45
down 82 percent in absolute tonnage.
128
387000
4000
06:49
(Applause)
129
391000
4000
06:53
Over the same span of time
130
395000
2000
06:55
sales have increased by two-thirds and profits have doubled.
131
397000
3000
06:58
So an 82 percent absolute reduction
132
400000
3000
07:01
translates into a 90 percent reduction
133
403000
2000
07:03
in greenhouse gas intensity relative to sales.
134
405000
4000
07:07
This is the magnitude
135
409000
2000
07:09
of the reduction the entire global technosphere
136
411000
3000
07:12
must realize by 2050
137
414000
3000
07:15
to avoid catastrophic climate disruption --
138
417000
3000
07:18
so the scientists are telling us.
139
420000
3000
07:21
Fossil fuel usage is down 60 percent per unit of production,
140
423000
4000
07:25
due to efficiencies in renewables.
141
427000
2000
07:27
The cheapest, most secure barrel of oil there is
142
429000
3000
07:30
is the one not used through efficiencies.
143
432000
3000
07:33
Water usage is down 75 percent
144
435000
3000
07:36
in our worldwide carpet tile business.
145
438000
2000
07:38
Down 40 percent in our broadloom carpet business,
146
440000
3000
07:41
which we acquired in 1993
147
443000
2000
07:43
right here in California, City of Industry,
148
445000
2000
07:45
where water is so precious.
149
447000
3000
07:48
Renewable or recyclable materials are 25 percent of the total, and growing rapidly.
150
450000
4000
07:52
Renewable energy is 27 percent of our total,
151
454000
3000
07:55
going for 100 percent.
152
457000
2000
07:57
We have diverted 148 million pounds --
153
459000
3000
08:00
that's 74,000 tons --
154
462000
2000
08:02
of used carpet from landfills,
155
464000
3000
08:05
closing the loop on material flows
156
467000
2000
08:07
through reverse logistics
157
469000
2000
08:09
and post-consumer recycling technologies
158
471000
3000
08:12
that did not exist when we started 14 years ago.
159
474000
4000
08:16
Those new cyclical technologies
160
478000
2000
08:18
have contributed mightily to the fact that we have produced and sold
161
480000
3000
08:21
85 million square yards of climate-neutral carpet
162
483000
4000
08:25
since 2004,
163
487000
2000
08:27
meaning no net contribution to global climate disruption
164
489000
4000
08:31
in producing the carpet throughout the supply chain,
165
493000
2000
08:33
from mine and well head clear to end-of-life reclamation --
166
495000
5000
08:38
independent third-party certified.
167
500000
2000
08:40
We call it Cool Carpet.
168
502000
3000
08:43
And it has been a powerful marketplace differentiator,
169
505000
3000
08:46
increasing sales and profits.
170
508000
2000
08:48
Three years ago we launched carpet tile for the home,
171
510000
4000
08:52
under the brand Flor,
172
514000
2000
08:54
misspelled F-L-O-R.
173
516000
3000
08:57
You can point and click today at Flor.com
174
519000
2000
08:59
and have Cool Carpet delivered to your front door in five days.
175
521000
4000
09:03
It is practical, and pretty too.
176
525000
3000
09:06
(Laughter)
177
528000
1000
09:07
(Applause)
178
529000
6000
09:13
We reckon that we are a bit over halfway
179
535000
2000
09:15
to our goal: zero impact, zero footprint.
180
537000
5000
09:20
We've set 2020 as our target year for zero,
181
542000
3000
09:23
for reaching the top, the summit of Mount Sustainability.
182
545000
5000
09:28
We call this Mission Zero.
183
550000
2000
09:30
And this is perhaps the most important facet:
184
552000
3000
09:33
we have found Mission Zero to be incredibly good for business.
185
555000
4000
09:37
A better business model,
186
559000
3000
09:40
a better way to bigger profits.
187
562000
2000
09:42
Here is the business case for sustainability.
188
564000
3000
09:45
From real life experience, costs are down, not up,
189
567000
4000
09:49
reflecting some 400 million dollars
190
571000
2000
09:51
of avoided costs in pursuit of zero waste --
191
573000
4000
09:55
the first face of Mount Sustainability.
192
577000
3000
09:58
This has paid all the costs for the transformation of Interface.
193
580000
4000
10:02
And this dispels a myth too,
194
584000
2000
10:04
this false choice between the environment and the economy.
195
586000
4000
10:08
Our products are the best they've ever been,
196
590000
2000
10:10
inspired by design for sustainability,
197
592000
2000
10:12
an unexpected wellspring of innovation.
198
594000
4000
10:16
Our people are galvanized around this shared higher purpose.
199
598000
3000
10:19
You cannot beat it for attracting the best people
200
601000
2000
10:21
and bringing them together.
201
603000
3000
10:24
And the goodwill of the marketplace is astonishing.
202
606000
3000
10:27
No amount of advertising, no clever marketing campaign,
203
609000
4000
10:31
at any price, could have produced or created
204
613000
3000
10:34
this much goodwill.
205
616000
3000
10:37
Costs, products, people, marketplaces --
206
619000
2000
10:39
what else is there?
207
621000
2000
10:41
It is a better business model.
208
623000
2000
10:43
And here is our 14-year record of sales and profits.
209
625000
5000
10:48
There is a dip there, from 2001 to 2003:
210
630000
3000
10:51
a dip when our sales, over a three-year period,
211
633000
2000
10:53
were down 17 percent.
212
635000
2000
10:55
But the marketplace was down 36 percent.
213
637000
3000
10:58
We literally gained market share.
214
640000
2000
11:00
We might not have survived that recession
215
642000
3000
11:03
but for the advantages of sustainability.
216
645000
3000
11:06
If every business were pursuing Interface plans,
217
648000
4000
11:10
would that solve all our problems?
218
652000
2000
11:12
I don't think so.
219
654000
2000
11:14
I remain troubled by the revised Ehrlich equation,
220
656000
3000
11:17
I equals P times A divided by T2.
221
659000
4000
11:21
That A is a capital A,
222
663000
2000
11:23
suggesting that affluence is an end in itself.
223
665000
5000
11:28
But what if we reframed Ehrlich further?
224
670000
4000
11:32
And what if we made A a lowercase 'a,'
225
674000
3000
11:35
suggesting that it is a means to an end,
226
677000
2000
11:37
and that end is happiness --
227
679000
3000
11:40
more happiness with less stuff.
228
682000
3000
11:43
You know that would reframe civilization itself --
229
685000
3000
11:46
(Applause) --
230
688000
8000
11:54
and our whole system of economics,
231
696000
3000
11:57
if not for our species, then perhaps for the one that succeeds us:
232
699000
6000
12:03
the sustainable species, living on a finite earth,
233
705000
3000
12:06
ethically, happily and ecologically
234
708000
3000
12:09
in balance with nature
235
711000
2000
12:11
and all her natural systems for a thousand generations,
236
713000
3000
12:14
or 10,000 generations --
237
716000
2000
12:16
that is to say, into the indefinite future.
238
718000
3000
12:19
But does the earth have to wait for our extinction as a species?
239
721000
5000
12:24
Well maybe so. But I don't think so.
240
726000
3000
12:27
At Interface we really intend to bring this prototypical
241
729000
3000
12:30
sustainable, zero-footprint industrial company
242
732000
3000
12:33
fully into existence by 2020.
243
735000
3000
12:36
We can see our way now,
244
738000
2000
12:38
clear to the top of that mountain.
245
740000
2000
12:40
And now the challenge is in execution.
246
742000
3000
12:43
And as my good friend and adviser Amory Lovins says,
247
745000
3000
12:46
"If something exists, it must be possible."
248
748000
4000
12:50
(Laughter)
249
752000
3000
12:53
If we can actually do it, it must be possible.
250
755000
3000
12:56
If we, a petro-intensive company can do it, anybody can.
251
758000
4000
13:00
And if anybody can, it follows that everybody can.
252
762000
4000
13:04
Hawken fulfilled business and industry,
253
766000
3000
13:07
leading humankind away from the abyss
254
769000
4000
13:11
because, with continued unchecked decline of the biosphere,
255
773000
5000
13:16
a very dear person is at risk here --
256
778000
3000
13:19
frankly, an unacceptable risk.
257
781000
2000
13:21
Who is that person?
258
783000
2000
13:23
Not you. Not I.
259
785000
2000
13:25
But let me introduce you to the one who is most at risk here.
260
787000
3000
13:28
And I myself met this person in the early days of this mountain climb.
261
790000
4000
13:32
On a Tuesday morning in March of 1996,
262
794000
4000
13:36
I was talking to people, as I did at every opportunity back then,
263
798000
3000
13:39
bringing them along and often not knowing whether I was connecting.
264
801000
4000
13:43
But about five days later back in Atlanta,
265
805000
3000
13:46
I received an email from Glenn Thomas,
266
808000
3000
13:49
one of my people in the California meeting.
267
811000
2000
13:51
He was sending me an original poem
268
813000
2000
13:53
that he had composed after our Tuesday morning together.
269
815000
3000
13:56
And when I read it it was one of the most uplifting moments of my life.
270
818000
4000
14:00
Because it told me, by God, one person got it.
271
822000
4000
14:04
Here is what Glenn wrote. And here is that person, most at risk.
272
826000
4000
14:08
Please meet "Tomorrow's Child."
273
830000
4000
14:12
"Without a name, an unseen face, and knowing not your time or place,
274
834000
4000
14:16
Tomorrow's child, though yet unborn,
275
838000
3000
14:19
I met you first last Tuesday morn.
276
841000
3000
14:22
A wise friend introduced us two.
277
844000
2000
14:24
And through his sobering point of view
278
846000
2000
14:26
I saw a day that you would see, a day for you but not for me.
279
848000
5000
14:31
Knowing you has changed my thinking.
280
853000
2000
14:33
For I never had an inkling
281
855000
2000
14:35
that perhaps the things I do might someday,
282
857000
3000
14:38
somehow threaten you.
283
860000
3000
14:41
Tomorrow's child, my daughter, son,
284
863000
2000
14:43
I'm afraid I've just begun to think of you and of your good,
285
865000
2000
14:45
though always having known I should.
286
867000
4000
14:49
Begin, I will.
287
871000
2000
14:51
The way the cost of what I squander, what is lost,
288
873000
3000
14:54
if ever I forget that you
289
876000
2000
14:56
will someday come and live here too."
290
878000
4000
15:00
Well, every day of my life since,
291
882000
2000
15:02
"Tomorrow's Child" has spoken to me
292
884000
2000
15:04
with one simple but profound message,
293
886000
2000
15:06
which I presume to share with you.
294
888000
2000
15:08
We are, each and every one,
295
890000
2000
15:10
a part of the web of life.
296
892000
3000
15:13
The continuum of humanity, sure, but in a larger sense, the web of life itself.
297
895000
4000
15:17
And we have a choice to make
298
899000
2000
15:19
during our brief, brief visit
299
901000
2000
15:21
to this beautiful blue and green living planet:
300
903000
4000
15:25
to hurt it or to help it.
301
907000
3000
15:28
For you, it's your call.
302
910000
3000
15:31
Thank you.
303
913000
2000
15:33
(Applause)
304
915000
15000
ABOUT THE SPEAKER
Ray Anderson - Sustainable-business pioneerRay Anderson founded the company that makes covetable Flor carpeting. But behind the fresh design is a decades-deep commitment to sustainable ways of doing business -- culminating in the Mission Zero plan.
Why you should listen
Ray Anderson founded Interface, the company that makes those adorable Flor carpet tiles (as well as lots of less whizzy but equally useful flooring and fabric). He was a serious carpet guy, focused on building his company and making great products. Then he read Paul Hawken's book The Ecology of Commerce. Something clicked: with his company's global reach and manufacturing footprint, he was in a position to do something very real, very important, in building a sustainable world.
Anderson focused the company's attention on sustainable decisionmaking, taking a hard look at suppliers, manufacturing processes, and the beginning-to-end life cycle of all its products. (For example: If you can't find a place to recycle a worn or damaged Flor tile, Interface invites you to send it back to them and they'll do it for you.) They call this drive Mission Zero: "our promise to eliminate any negative impact our company may have on the environment by the year 2020."
Anderson, who died in August 2011, estimated that since 2001 he'd given more than 1,000 speeches making the business case for sustainability. He often ended his talks with the poem "Tomorrow's Child," written by an Interface employee, Glenn Thomas.
Ray Anderson | Speaker | TED.com