BusinessGreen Leaders Award 2011: InterfaceFLOR lays template for greener business

By the admission of its own senior managers, commercial carpet tile manufacturer InterfaceFLOR does not operate in the most exciting of industries. But thanks to nearly two decades of committed leadership, technical innovation and bold investment, that has not stopped InterfaceFLOR emerging as one of world's most heralded sustainable organisations.

The winner of the inaugural BusinessGreen Leaders Award Company of the Year has established itself as a trailblazer for sustainable businesses everywhere, demonstrating how a conventional listed company in a mature industry can convert itself into a beacon of green innovation and commercial success.

The story of how the US firm has reached this point is familiar to many followers of the green business sector, but it is well worth recounting, particularly when the man doing the recounting is Lindsey Parnell, CEO and president of InterfaceFLOR in Europe, the Middle East, Africa and India.

"It all stems from one guy – Ray Anderson," recalls Parnell. "He founded the company in the early 70s and was CEO in the mid-90s, when he was told by the sales team that some customers were asking about our sustainability strategy. So a presentation was put together and Ray's view was that it was just compliance and not particularly inspiring. He is a great reader so he started reading on the topic and ended that exercise in 1994 with the conclusion that the environment was at risk and a lot of that was caused by industry and companies such as his own that were based on petrochemicals and energy. He decided at that point to take on a leadership mantle."

Of course there are plenty of top business execs who claim to have had Damascene environmental conversions, and a fair few who actually have. But what has made InterfaceFLOR so significant is the combination of the earliness of Anderson's decision to put sustainability at the heart of his company's operations and the genuine success he has achieved in doing so.

According to Parnell, it is the company's position as an early adopter of sustainability principles that provides one of its most important commercial advantages. "We have 16 years of actual activity," he boasts. "We have stretching targets for 2020, but we also have a strong track record. We do not have to only talk about what we are planning to do. We can talk about what we have done."

This track record also demonstrates the extent to which the company has benefited from its commitment to curbing its environmental impacts. InterfaceFLOR's detailed environmental metrics date back to the mid-90s, allowing Parnell to detail how the company has reduced waste to landfill by 80 per cent since 1996, curbed water use by the same amount, reduced energy use per unit of production by 43 per cent, and cut greenhouse gases 44 per cent, partly by generating 30 per cent of its energy from renewable.

Inevitably, this array of savings has translated into financial gains. "We could see that the millions of dollars were stacking up," recalls Parnell. "Between 1995 and 2010 we have saved $433m – that is a huge amount for a company with revenues of around $1bn. There is no way we have invested $433m in this, but that is what it has saved."

However, money saved is just half of the equation for InterfaceFLOR's sustainability strategy. The company's emergence as a green powerhouse has had a major impact on recruitment and resulted in what Parnell regards with audible pride as a highly skilled, highly engaged and highly committed workforce.

"I understand this is not the most glamorous business, but people come here as it is green," he says, adding that the commitment to sustainability has now become self-perpetuating. "The subject is ingrained in the business, in the way in which we design for sustainability and talk to raw materials suppliers. We could not stop this thing now if we wanted to. I would not want to stop it, but if I did I would lose 80 per cent of the people who work for us."

Moreover, requiring this workforce to meet demanding environmental targets and operate within sustainable design guidelines has delivered a degree of innovation that the outside observer would not necessarily expect from a carpet tile manufacturer.

"We end up designing a lot of our own processes and equipment," explains Parnell. "We design processes that use less energy and have our designers looking at how to use less materials all the time. It saves a lot of money and spurs innovation as design teams get sent back to think again if they are not making sustainability improvements."

For example, InterfaceFLOR's most popular product line, it's so-called Random tiles, draw on biomimicry principles to develop tiles that are each fractionally different. "We would never have dreamed that one up without these sustainability goals," admits Parnell, adding that as a result of the tiles' different shapes, the waste produced during installation falls from around 10 per cent to less than one per cent.

Similarly, the company this month launched a new range known as Biosfera, which it claims is the "first carpet tile collection in the industry to include 100 per cent recycled yarn". Made from 30 per cent post-consumer yarn, including material from InterfaceFLOR's own tiles, and 70 per cent pre-consumer material sources, the new tiles are manufactured using materials that the company has extracted from old tiles using its own recycling processes. "We were the first to work with a supplier to reclaim nylon yarn and recycle," says Parnell. "And now we are moving towards closed loop processes."

This goal of delivering completely closed loop processes is part of the company's hugely ambitious Mission Zero sustainability strategy, which aims to turn InterfaceFLOR into a zero-impact organisation. As such, management has signed up to a raft of public targets, including commitments to eliminate waste and harmful emissions by 2020, maximise the use of renewable energy, recycle waste materials and develop more resource-efficient transport methods.

But for all its innovation and targets, arguably InterfaceFLOR's greatest contribution to the green business sector is in demonstrating the art of the possible.

This is not some clean tech start-up operating in an inherently green sector, nor a multinational with a long-term vision and capital to burn. As Parnell is keen to point out, InterfaceFLOR is a mid-size listed firm that has had to marry its demanding sustainability goals with equally demanding shareholders.

"In the first few years [Anderson] faced a lot of criticism," he recalls. "Wall Street accused him of wasting shareholder value and there was a view that he was a tree-hugging nutcase. We are publicly listed and Wall Street offers us no slack on this. We have to spend capital under the same rules and expectations as anyone else. If an idea has a 20-year payback, then it is not going to happen."

But it is the combination of Anderson's leadership skills and the conventional business demands the company faces that have made the InterfaceFLOR story so compelling. Parnell admits the firm takes a slightly longer term view than some companies when making investment decisions and is more willing to assume energy and raw material prices will rise, but he is insistent that all of InterfaceFLOR's green initiatives have to comply with one basic imperative: "It has to be profitable; it has to drive towards profits, otherwise it does not last. You can't do it just because it's right to, because it is a moral imperative. You have to keep the business healthy."