What Does A 21st Century Sustainable Enterprise Look Like?

9 04 2007

In the face of last Friday’s report by the scientific community on global climate change (see last post), it would be nice to know what organizations are in the forefront of change that will radically impact our industries and professions in years to come. Who are they? What motivated them to change? What is their strategy for becoming a “sustainable enterprise or profession?”

Twelve Years & Counting – Interface Carpet’s Progress Toward Becoming a Regenerative Business

In the Social Responsibility section on the horizontal navigation above, we briefly featured Interface, Inc. and its CEO Ray Anderson whose book Mid-Course Correction: Toward a Sustainable Enterprise” is must reading for CEO’s and senior executives who have been looking for a business case for social responsibility. Today’s post will provide a brief overview of his thinking and Interface’s actions over the past 12 years that was influenced from previous works by Paul Hawken founder of Smith and Hawken and author of the “Ecology of Commerce” and Bill McDonough, FAIA an award winning architect, author of Cradle to Cradle” and leader of the movement that spawned cradle to cradle product design and its companion certification program.

At the core of leaders like Interface is the understanding that it will take more than the corporate social responsibility (CSR) programs that proliferate today to make any measurable and sustainable impact with the issues these programs claim to target – health, environment, social, economic issues. CSR of today has been largely driven by using CSR to improve business cost efficiencies, waste management, and community PR.

Ray Anderson and others believe that business needs to rethink its business models (how they create and share value), their products and services, and the processes used to deliver them. Once again, it bears reminding that Ray Anderson is CEO and Founder of a billion dollar, publicly traded company and the world leader in carpet manufacturing for the world’s buildings. So he isn’t doing this because their profit models are broken.

Think Sustainable Business Not Tactical CSR

Interface is rethinking its business model. Instead of selling carpets which were petroleum-based, they are now leasing their carpets to customers and managing the life cycle of the carpet in their customers’ facilities. When carpet needs to be replaced they plan to do so with carpet that is made of organic materials.

This is a huge shift and very difficult to do. But Interface believes the hard science requires that to become a “sustainable business” you must design your business to mitigate or eliminate the “externalities” caused by your business which in turn affects societies in many ways.

Sustainability principles were developed by Dr. Karl-Henrik Robert called the Natural Step. Its first two laws of thermodynamics that Robert calls “system conditions for sustainability” are as follows:

  • Matter & energy cannot be created or destroyed it just changes form e.g. gasoline becomes carbon emissions
  • Matter and energy tend to disperse – what is introduced into the world remains in it finding its way back into our ecosystem

Today’s society and the business innovations that drive its prosperity were never designed to be “sustainable” outside of the business value it returned to stakeholders. Externalities that have resulted from this model were someone else’s problem.

Robert and the scientific community which supports Natural Step explain this must change. Here’s why:

  • Substances extracted from the Earth’s crust must not systematically increase in the ecosphere
  • Man-made substances must not systematically increase either but rather be integrated back into Nature’s cycle in order to maintain a healthy balance
  • Productivity and diversity of Nature must not be systematically diminished to a point where it can not replenish itself to reach this balance
  • Therefore, there must be fair and efficient use of resources to meet society’s needs

So becoming a “sustainable business or profession” requires how we redesign business right this time to support:

  • Value creation to drive wealth in our economy (today’s model)
  • Value creation that supports environmental sustainability (carbon neutral or regenerative)
  • Value creation that supports social sustainability (social interaction and cultural enrichment)

Interface’s Response

The core Interface strategy is to:

  1. Eliminate Waste: Eliminating all forms of waste in every area of business;
  2. Benign Emissions: Eliminating toxic substances from products, vehicles and facilities;
  3. Renewable Energy: Operating facilities with renewable energy sources – solar, wind, landfill gas, biomass, geothermal, tidal and low impact/small scale hydroelectric or non-petroleum-based hydrogen;
  4. Closing the Loop: Redesigning processes and products to close the technical loop using recovered and bio-based materials;
  5. Resource-Efficient Transportation: Transporting people and products efficiently to reduce waste and emissions;
  6. Sensitizing Stakeholders: Creating a culture that integrates sustainability principles and improves people’s lives and livelihoods;
  7. Redesign Commerce: Creating a new business model that demonstrates and supports the value of sustainability-based commerce

You can learn more about the practices leading toward sustainability (PLETSUS) that are coming out of Interface by visiting their sustainability website (link is to the right under Social Responsibility) that documents their learnings and the metrics they are creating. Ray Anderson and Interface also want to share this knowledge with others in the hope of motivating others to begin their own journey of rethinking their businesses.

Where Does This Leave Us As Associations?

Once again, whether you are lucky to operate in an industry or profession that is doing well presently and for those of us struggling to remain of value to our constituencies, we must all begin our own introspection if we are to maintain our circles of influence with our members, nonmembers, and stakeholders.

Examining how a more strategic approach to social responsibility can help your industry or profession consider how to become more “sustainable” as a value creator will be key to one’s long term future. Companies and professions will be affected by similar changes made by innovators who see the same opportunities as Interface. This means associations will be impacted as such actions build momentum.

Perhaps our role as associations as trusted brokers could be to help provide the information needed for business and professions to apply the “technical” means and to identify the “resources” needed to build sustainability. Through open sharing and collaboration associations can also help develop knowledge data banks and communities of practice to help others benefit from the innovations of others whether in or out of your industry or profession.

As this website opensource.association promotes, we can use open business models and content co-creation methods to help evolve this conversation and capture knowledge. In brief, why not consider the following in your association.

Make Connections – Change attitudes of people and organizations to help them understand the business case for becoming a sustainable business or profession

Create Relationships – Introduce “change makers” and their innovations through conversations and relationship building

Partner with Innovators – Seek out those who can lend their competencies, experience and thinking and co-brand initiatives that can leverage their influence; make sure your efforts support global initiatives

Link People to Product -To content you co-create with partners and your Member/Non-Member community and distribute through web, media, publications, training, databases, measurement tools, etc

Empower People to Act – Don’t just sell them something but help them apply what they learn, possibly even help them facilitate the process of re-engineering which might lead to entirely new business models of your own (e.g. AIGroup’s consulting services model from a previous post)

It’s time to think beyond today’s CSR activities and move toward fundamental sustainability strategies that can generate new value and influence for you.

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