We waste massive amounts of energy and materials, which means we also waste money and cut profits
Hey buddy, can you spare a planet?
By Jim Harris
May 11, 2010
May 11, 2010
North America contains just five per cent of the world’s population, yet we consume 33 per cent of the world’s resources. If every person on the planet consumed as much as us, we would require at least four more planets to feed the demand. At the heart of our unsustainable North American lifestyle is the waste of materials and energy.
But change is possible. Take Ray Anderson, the founder of Interface Global, a modular carpet company headquartered in Atlanta. His new book, Confessions of a Radical Industrialist, is an excellent read and a model for other business leaders interested in sustainability.
In 1994, Anderson had a road-to-Damascus-type experience when he realized that making carpets is a toxic petroleum-based process which creates immense amounts of pollution. Five billion pounds of carpet are dumped in American landfills annually.
So Anderson committed Interface to becoming a company that creates no pollution and no toxic waste—in other words, one that has no material footprint.
Since 1994, Interface has cut greenhouse gas emissions by a staggering 82 per cent, fossil fuel use by 60 per cent, waste by 66 per cent and water use by 75 per cent. At the same time—and pay attention here, business leaders—the company has increased sales by 66 per cent and doubled earnings.
Going green has been very profitable. Between 1994 and 2008, Interface saved US$405 million through its sustainability efforts, and at the 10-year mark the savings were equal to 28 per cent of the cumulative operating profit to that point.
An insight that comes from reading Anderson’s book is that a company’s carbon emissions or waste stream are really a proxy for wasted profits. When you take out carbon, you take out cost. Radically rethinking industrial processes offers incredible opportunities.
The end of foreign oil
In Natural Capitalism, authors Paul Hawken, Amory Lovins and Hunter Lovins show that for every 100 units of material that goes into industrial production processes there are only three units in use six months later. In other words, 97 per cent of material inputs end up as waste. This is why incrementalism is not enough when discussing sustainability. A 10 per cent improvement in material efficiency across all industrial processes would mean that we’d be using 3.3 per cent of material six months later. No, we need a 10-, 20- or even 30-fold improvement in material and energy intensity.
According to Amory Lovins, there is a great deal of free oil in Detroit: if every North American car got the same fuel efficiency as a Toyota Prius, we’d not have to import any oil in North America. So the inefficiency in the mindset of Detroit car company executives, if corrected, could supply more oil to the U.S. than Saudi Arabia. The economic impact of the U.S. becoming self-sufficient would be profound: when oil hit US$147 a barrel and the U.S. was paying billions of dollars for Middle Eastern oil imports, American financier T. Boone Pickens called the oil payments the largest transfer of wealth in human history.
Back to Interface: working with the municipality of LaGrange, Ga., it began buying methane captured from the local landfill. The city put up the US$3 million capital for the project, while Interface contracted to buy the gas. Anderson estimates that reclaiming all U.S. landfill methane would achieve the Kyoto goals for America and do so at a profit. (Methane is 21 times worse than CO2 as a climate-changing gas).
Key lessons
In the face of all this, it is amazing many people still argue that business and government cannot afford to go green. Being environmentally responsible is, in fact, highly profitable. At the same time, it has to be acknowledged that sustainability is an ongoing effort: at 14 years into its journey, Interface is nowhere near finished.
To get us there, I have two recommendations. First, tie the bonus of every manager to an annual 10 per cent reduction in waste. That will drive action. Second, we should concentrate on reclaiming old product at the end of its life. This will be the source of new materials which will drive our factories and, yes, our consumption.
But change is possible. Take Ray Anderson, the founder of Interface Global, a modular carpet company headquartered in Atlanta. His new book, Confessions of a Radical Industrialist, is an excellent read and a model for other business leaders interested in sustainability.
In 1994, Anderson had a road-to-Damascus-type experience when he realized that making carpets is a toxic petroleum-based process which creates immense amounts of pollution. Five billion pounds of carpet are dumped in American landfills annually.
So Anderson committed Interface to becoming a company that creates no pollution and no toxic waste—in other words, one that has no material footprint.
Since 1994, Interface has cut greenhouse gas emissions by a staggering 82 per cent, fossil fuel use by 60 per cent, waste by 66 per cent and water use by 75 per cent. At the same time—and pay attention here, business leaders—the company has increased sales by 66 per cent and doubled earnings.
Going green has been very profitable. Between 1994 and 2008, Interface saved US$405 million through its sustainability efforts, and at the 10-year mark the savings were equal to 28 per cent of the cumulative operating profit to that point.
An insight that comes from reading Anderson’s book is that a company’s carbon emissions or waste stream are really a proxy for wasted profits. When you take out carbon, you take out cost. Radically rethinking industrial processes offers incredible opportunities.
The end of foreign oil
In Natural Capitalism, authors Paul Hawken, Amory Lovins and Hunter Lovins show that for every 100 units of material that goes into industrial production processes there are only three units in use six months later. In other words, 97 per cent of material inputs end up as waste. This is why incrementalism is not enough when discussing sustainability. A 10 per cent improvement in material efficiency across all industrial processes would mean that we’d be using 3.3 per cent of material six months later. No, we need a 10-, 20- or even 30-fold improvement in material and energy intensity.
According to Amory Lovins, there is a great deal of free oil in Detroit: if every North American car got the same fuel efficiency as a Toyota Prius, we’d not have to import any oil in North America. So the inefficiency in the mindset of Detroit car company executives, if corrected, could supply more oil to the U.S. than Saudi Arabia. The economic impact of the U.S. becoming self-sufficient would be profound: when oil hit US$147 a barrel and the U.S. was paying billions of dollars for Middle Eastern oil imports, American financier T. Boone Pickens called the oil payments the largest transfer of wealth in human history.
Back to Interface: working with the municipality of LaGrange, Ga., it began buying methane captured from the local landfill. The city put up the US$3 million capital for the project, while Interface contracted to buy the gas. Anderson estimates that reclaiming all U.S. landfill methane would achieve the Kyoto goals for America and do so at a profit. (Methane is 21 times worse than CO2 as a climate-changing gas).
Key lessons
In the face of all this, it is amazing many people still argue that business and government cannot afford to go green. Being environmentally responsible is, in fact, highly profitable. At the same time, it has to be acknowledged that sustainability is an ongoing effort: at 14 years into its journey, Interface is nowhere near finished.
To get us there, I have two recommendations. First, tie the bonus of every manager to an annual 10 per cent reduction in waste. That will drive action. Second, we should concentrate on reclaiming old product at the end of its life. This will be the source of new materials which will drive our factories and, yes, our consumption.
Jim Harris is the author of Blindsided, a number one international bestseller published in 80 countries. He speaks at 40 conferences and seminars a year around the world. E-mail him at jimh@jimharris.com.
