A business model revolution that is increasing the bottom line.

In 2009, Ray Anderson gave a talk at TED about a revelation that he had around his business, Interface Inc. Interface is the largest manufacturer of modular carpets and does just south of $1 billion in annual revenue. His business was incredibly carbon intensive and in 1995, after reading The Ecology of Commerce by Paul Hawken, he set out on a path that would turn out to be the blue print and foundation to a new way of doing business. He saw that sustainability was the key to business success and, indeed, to maintaining balance in our entire economic system.

He defines sustainability as “taking nothing from the earth that is not rapidly and naturally renewable, and doing no harm to the  biosphere.”

Under his leadership, Interface plans to reduce and then eliminate petroleum from its manufacturing processes. His company is pioneering closed-loop technologies for the future. He believes that we are at the dawn of a new industrial revolution, and the latest news on declining oil production in 75 per cent of the world’s largest oil fields tends to lean the odds in favor of Anderson’s prediction being highly probable. His brave new direction also revealed something else that was a significant surprise.

Sustainable companies can and will outperform companies that are not pursuing sustainability.

Interface is in one of the most carbon intensive industries and one that is completely dependent on oil, however Anderson’s Interface seems to be doing what was considered impossible. His momentum is shifting an entire paradigm and Interface is on track to being completely sustainable by 2020.

First Anderson focused his company on waste reduction. It seems to be a simple and logical area to place corporate focus, yet many companies seem to miss the point that waste is money lost, and waste reduction would lead to gains in the near to mid-term. Ten years after he started his vision of waste reduction, the company saved a staggering $300 million, which was used to finance research into more sustainable challenges. Interface looks everywhere for reduction in energy, raw materials and emissions.

This has led to an environment that is open to new vetted innovation coming in from outside, and has also led to new ways of doing business. An example of this is Interface’s carpet leasing model. Yes, I said carpet leasing model. The carpets are leased to the customer over the lifetime of the carpet and maintained by Interface. At the end of that life cycle, Interface reclaims and recycles the carpets back into their spin pool, thus taking responsibility for the complete lifecycle of what they produce. Interface also changed the raw material inputs to more sustainable components. What is also key is that Anderson has never taken his mind off of profit or being competitive and his company has outperformed their competitors. He describes himself as “a husband, a father and an industrialist.” He says that he is a recovering plunderer. In his book Mid Course Correction, Anderson says “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. It will allow the externalization of any cost that an unwary, uncaring, or gullible public will permit to be externalized–caveat emptor in a perverse kind of way. My God! Am I a thief, too?” He goes on to say, “I was running a company that was plundering the earth, and I thought, ‘Damn, some day people like me will be put in jail!’”

This realization led to one of the most revolutionary acts in North American business and has ushered in the sustainable business case which was important for sustainability taking the main stage.

In our last article, we explained the importance of the first clean 15% as it related to new ways of doing business.

“According to the Diffusion of Innovation Theory, a theory of the how, why and at what rate new ideas and technology spread through cultures, it takes approximately a 15 per cent adoption of an innovation to reach critical mass and start a shift towards the total uptake of the new innovation or model. Innovation diffusion, however, is not just about technology. It is about technology placed in the right areas with the right opinion leaders.”

It seems that Anderson is one of the first clean 15% that is moving to shift paradigms in ways that will change the global business landscape. His position as the chairman of Interface makes him an influential thought leader in the world of big business and he has started a trend that is fueled by peaking oil production, climate change and plain common sense. Waste equals wasted money.

Here is a quick snap shot at a few other  Global 1000 companies and their sustaiability efforts:

According to Corporate Knights’ Global 100 list, General Electric was tops with their Ecoimagination line. Ecoimagination is helping to find, fund and develop innovative technologies that are designed to benefit the environment. They have issued a global challenge that will invest $200 million into the best smart grid technologies around the world. Working on everything from advanced membranes to greener data centres, GE has taken bold steps toward the development of new technologies that will lead to greater sustainability.

Newsweek’s top spot for their green ranking was Hewlett-Packard. According to Newsweek, HP has a “strong” programs to reduce GHG emissions. The first major IT company to report GHG emissions associated with its supply chain, HP has made an effort to remove toxic substances from its products, but Greenpeace has also targeted HP for failing to do better.

The Dow Jones Sustainability Indexes proclaimed the most sustainable car company in the world  was BMW, who in March 2010 signed a five year strategic agreement for sustainable innovations with Dassault Systems.

P&G, the largest consumer products company in the world established five strategies for sustainability and set goals that they aim to hit by 2012. They outlined an ambitious goal of developing at least $50 billion in cumulative sales of sustainable innovative products, to deliver an additional 20 per cent reduction in CO2 emissions, energy consumption, water consumption and disposal waste from P&G plants, leading to a total reduction over the last decade of 50 per cent.
Canada’s banking giant RBC also made the Corporate Knights’ Global 100 and was one of 15 companies in the financial services sector globally and one of only seven banks to be included on the Global 100. They were also included on the Dow Jones Sustainability World Index.

10 years ago, Sustainability and clean technology were reserved for the fringe, however, today all smart companies are seeing that sustainability will matter to customers, it will matter to mid-term and long term shareholder value, and it will matter to the bottom line.

Clean 15 One-on-One Meeting

On November 9th and 10th  Canadian Business Journal in association with Fogler Rubinoff LLP, Yet2.com, and OCETA are launching the Clean 15 One on One Meeting. The Clean 15 One-on-One Meeting is an exclusive, deal-intensive event. As the name implies, this event involves individual meetings that take place between technology companies and key decision makers representing the demand side of Global 1000 companies, countries, entire regions and SMEs.

Participants will take part in up to 12 focused, strategic and personalized meetings. All technologies and key demand-side representatives will be strategically paired up to maximize deals that will bring new innovation to market faster.

From the event location at the business focused downtown offices of Fogler Rubinoff LLP, to its unique model of strategically matching participants in advance, it is the anti conference that is designed to uniquely increase value for all those that attend. Participants will have private and semi private offices and conference rooms to discuss adopting, partnering and licensing new technologies. Clean tech companies, sustainable manufacturing firms and companies that have technology needs will all be represented.

The event already has strong interest from Venture Capital firms from Silicon Valley, Japan, representatives from the Saudi Arabia, arms length government organizations and trade commissions as well as Global 1000 companies that have very strong incentives to engage clean technology companies. To register clean technology companies should visit http://www.clean15.com/oneonone. Companies that have clean technology needs should also register at http://www.clean15.com/oneonone.

The earlier the registration, the higher the probability of finding suitable matches. If you are a clean technology company that needs to make smart strategic relationships or an entity that wants to leverage global innovation to rapidly increase your sustainability, we invite you to the Clean 15 One on One.

For more information please visit http://www.clean15.com