“For those who think business exists to make a profit, I suggest they think again. Business makes a profit to exist. Surely it must exist for some higher, nobler purpose than that.” So said Interface founder Ray Anderson in his gentle Southern-inflected tone as he asserted, unabashedly, that his company would lead the global movement toward corporate sustainability more than 20 years ago. Today, Interface, the world’s largest manufacturer of modular carpet tiles, is widely considered to be the company that sets the bar for the industrial ecology movement. Considered a radical at the time, Anderson’s move to make environmental accounting central to Interface’s business proposition has paved the way for many, many other corporations to do the same.
Anderson, who passed away in 2011, is well known as a sustainability pioneer. Perhaps lesser known is the surprising way in which he began his sustainability journey. It started with his own admission in 1994 that, as a highly successful entrepreneur in his sixties, he had never once thought about the environmental impact of his business. That quickly changed after reading Paul Hawken’s seminal book, The Ecology of Commerce, after which he hired a team of expert advisors to grade Interface’s environmental performance. Their report card painted a grim picture—conventional carpet manufacturing processes at the time were highly polluting—but rather than try to hide this information, he made it public and announced that Interface would be making a dramatic shift in long-term strategy to climb what he termed the “mountain” of sustainability.
Such profound transparency has been at the heart of Interface’s sustainability mission ever since, though the meaning of the term continues to evolve in keeping with the times. These days, Interface employs transparency strategies—in ingredients, manufacturing processes, environmental impacts, health risks, and embodied carbon—as a means to push the building and construction industry toward a radical new paradigm where it becomes an agent of positive change, rather than an obstacle that consumers and regulators are forced to push toward common societal goals.
Enter the EPD
Kirsten Ritchie, principal and director of sustainable design at global design firm Gensler, has some spreadsheets that would make any sustainability officer swoon. Trained as an engineer, she’s spent nearly three decades studying green building products and has an eagle eye for those that live up to her standards and those that are merely garbed in marketing hype. She has helped Gensler develop its own internal metrics for choosing among the many companies and products claiming to reduce environmental impacts, and can whip up custom matrices for clients to weigh out which procurement choices best match their particular sustainability goals.
“In many cases we have clients saying, ‘Hey, can you help us figure out which of these products that we’re looking to buy are the best in a particular category?’” she says. “Often, they’re looking to see where an environmental benefit would actually justify a price differential.”
Ritchie has been working with Interface on two large projects of late—a series of major renovations at San Francisco International Airport and new construction for a large and growing tech company (“Unfortunately I can’t give you their name,” Ritchie says)—where the clients have asked Gensler to provide a detailed cost-benefit analysis of the environmental and economic impacts of an array of building products. Lacking expert advice, many companies still rely on unverified manufacturer claims regarding environmental impacts, what Ritchie calls the proxy effect: “Making the assumption, for example, that any product that has good recycled content is a good proxy for having less environmental impact overall.”
It sounds elementary, but procurement practices are still emerging from such primitive approaches to decision-making. Life cycle assessments (LCAs) were the first attempts to be more scientific about the process, but because they entail quasi-subjective decisions on the part of the practitioner who undertakes them, they leave a fair bit of room for interpretation. Ritchie says one of the reasons that Interface products so often receive high marks in her spreadsheet matrices is because they use LCAs less as a way to assert sustainability claims in the marketplace and more as tool for internal decision-making.
“Interface was one of the first in the building products industry to undertake really good lifecycle assessments, and what we were really very appreciative of was that they actually use them as a design tool and a production tool,” she explains, noting that Interface has used them for a myriad of reasons, from recognizing the footprint of the energy that’s used for the ovens for curing materials and finding ways to source cleaner energy, or simply working to improve the efficiency of their ovens. “They’ve been able to show over time how their products are improving from true measurable impact perspectives. Unfortunately a lot of manufacturers are doing LCAs because designers and contractors are asking for it to attain LEED certification. That was not really the hope. The hope is that they would be following the example of Interface and using it to inform their designs, to improve their production methods, and to improve overall performance.”
In 2006, the transparency movement got a boost with the publication of the ISO 140425 standard for environmental labeling, which for the first time codified how companies should disclose claims regarding environmental impact. The key component of ISO 140425, says Anna Nicholson, a life-cycle assessment practitioner with UL Environment, are the PCRs—product category rules. “The goal was to create a consistent set of rules when you’re doing your LCA,” Nicholson says. “Product category rules stipulate what the methodologies and calculation procedures are for each product type so there is a valid basis of comparison between products.”
The validity of LCAs has been greatly improved since the advent of ISO 14025 and its PCRs, which in turn has paved the way for environmental product declarations (EPDs) to take root as the new industry standard for comparing environmental impacts among products. By nature, EPDs do not contain a value judgment about the sustainability merits (or lack of) of a given product; they simply state the facts in a format that allows for apples-to-apples comparisons. “EPDs are not a rating,” explains Nicholson. “It’s just saying we are all going to normalize our results in the same way.”
Carpet tiles provide a quick and easy illustration of why EPDs are so important. Carpet tile A might only last 5 years based on its fiber composition, while tenant turnover in the building it’s in averages 20 years. If carpet tile B has a 25-year life span, but has twice the carbon footprint of carpet tile A, is it still the more sustainable choice for that particular application because it results in a lower carbon footprint overall? That sort of information can be found in an LCA, but it might take a lot of digging and even extra calculations for the designer charged with making the decision of what product to choose. EPDs, which are based on the data in LCAs, make such correlations easier to see.
Some companies have taken issue with the way that LCAs and EPDs expose what they consider to be proprietary information. But Interface has chosen to look at that not as a problem, but as a facet of their larger transparency strategy—an approach that continues to show fiscal benefits. “Emissions really embody wasted profit in the form of things that you throw away or that go up the smokestack,” says Nicholson. “I’ve worked with manufacturers that are so concerned that they don’t even want to disclose what percentage of impacts come from raw materials versus manufacturing. They feel like that is showing too much of their hand—versus the folks at Interface who lay it all out on the table.”
EPDs are still a work in progress, and Interface, because it is so deeply involved in the thinking behind them, is helping to advance the discussion. UL Environment, who has completed 500 EPDs to date—more than all of their competitors combined—has a partnership with The United States Green Building Council to begin to define the next generation of EPDs to make them more streamlined and user-friendly. Nicholson says Interface is one of the only companies that has been asked to help pilot the initial changes that are being considered for the second generation of enhanced EPDs, adding that “they really are at the forefront of being sustainability leaders.”
Using Transparency to Leverage the Supply Chain
Erin Meezan, vice president of sustainability at Interface, was one of thousands of corporate executives in attendance at the COP21 climate change summit in Paris last December. Walking around the exhibition hall in a sea of like-minded individuals, Meezan says she felt more hopeful than ever that the ethics of environmental stewardship had become a rising tide in consumer awareness, government policy, and corporate conscience. “In Paris, it was really interesting for the first time to see organizations like Architecture 2030, the USGBC, and The World Green Building Council all in one place talking about the problem of embodied carbon in the built environment—specifically the embodied carbon in building products—and having a larger conversation advocating for solutions.”
Efforts to reduce carbon emissions resulting from car-centric development patterns and inefficient, poorly insulated buildings has become ingrained in public policy, as well as in the business strategy of most corporations in the construction, architecture, and engineering industries. In many ways these are the low-hanging fruit in the race to reverse the effects of global warming. On the product side of the industry, reducing emissions from the smokestacks of the factories that produce the materials that go into every building is also an area where considerable progress is being made. But dialing down the embodied carbon that Meezan is referring to— which takes into account all the materials and processes of the supply chain behind a given product, as well those involved in its distribution, use, and eventual disposal—is a much more complex and lofty goal to aspire to. Yet it’s one that Interface has been hunting in the shadows for years, which is why Meezan was so pleased to see so much attention given to the subject in December
“I could literally see how this global conversation around carbon and the built environment at COP21 was starting to be connected and find its way as a solution to the climate challenge,” Meezan says.
Perhaps the biggest reason it’s so hard for manufacturers to reduce the carbon footprint of their supply chain is that they don’t know exactly what goes on in their supply chain. As the first company to commit to publishing EPDs for all of their products, Interface has a leg up in that department. Of course having intimate knowledge of the environmental impacts of your supply chain does not necessarily mean those impacts will be diminished. But as the saying goes, knowing is half the battle, and Interface’s approach to transparency has certainly proved that true. Meezan says the EPD process has catalyzed very transformative conversations with their suppliers.
“We can say to our supply chain, ‘We want you to reduce the carbon in the raw materials that we get,’ like the yarn we use in products,” she explains. “Because we’ve done this deep dive to understand what is in a finished carpet tile, and we share all that data openly with our suppliers, we can say, ‘Here’s the best way you can improve your product. Did you know that you could use renewable energy at your factory? And by the way, look at how changes like that could impact not only your company and footprint, but the entire supply chain.’ It’s been interesting how much we’ve been able to leverage this with suppliers. Oftentimes we are bringing them information on their stuff that they don’t know.”
Interface has rallied around EPDs as a communication tool with their supply chains, as well as with the value chain connected to each product. In the past, Meezan says that the company was at times flummoxed by customers or environmental organizations that called out specific ingredients or manufacturing processes that they were concerned with—which weren’t always those that their own analyses had found to be of greatest impact. LCAs—“100-plus page academic documents,” says Meezan—which Interface has been using for close to 20 years, weren’t always helpful in clarifying the company’s sustainability strategy to stakeholders.
“We spent a lot of time talking to customers about really little issues that weren’t necessarily the biggest environmental impacts of the product. For example, both Interface and the customer initially thought that the backing polymer in its products had significant impact, when in fact the majority of the impact is in the yarn,” Meezan says. “EPDs were a really fantastic step forward for us because they provide what we think of as really relevant data in a much shorter, more understandable format, which can be compared apples-to-apples across the industry. Plus it was third-party verified, so you didn’t feel like it was just someone telling a story.”
Even the 10 to 15 page EPD is a lot for a non-expert to digest, which is why Interface worked with UL to come up with 1 to 2 page summaries of each EPD, that they refer to as “product transparency summaries.” However, Meezan says it’s a fine line between simplifying information in order to communicate, and oversimplifying it to the point of being meaningless marketing babble. It may not be the easy road, but as Ray Anderson always insisted, being an industry leader means making choices in support of long-term goals, even if they make you a little uncomfortable in the short term.
“Transparency is about being honest with ourselves first, and then doing the work to figure it out” says Meezan. “I think a lot of companies think about transparency as a strategy to deal with stakeholders—particularly problematic stakeholders or people they don’t want to deeply engage with. They feel like, ‘Okay we’re going to do this disclosure, now go away.’ For us, it’s just as powerful a tool for internal decision-making. It helps us set internal goals, and then disclosing them publicly reinforces the need to actually meet those goals.”
Winning with Your Cards on the Table
There is something refreshing about talking to the folks at Interface. It’s rare that corporate executives will admit to any shortcomings about their company, unless of course they’ve been publicly exposed for something and have no choice. But Ray Anderson instilled a culture of proactive authenticity and openness about the inner workings of Interface, a gamble that has now proven its worth many times over.
“A lot of people thought we were crazy when we became one of the first companies to come out and reveal the environmental footprint of our operations,” says Mikhail Davis, who has been with Interface since 2011 as the director of restorative enterprise, and first met Ray Anderson as a then-recent college graduate in the late ‘90s when he was an assistant to David Brower, first executive director of the Sierra Club and one of the outside experts on Interface’s legendary sustainability “Dream Team.” “We said this is how much energy we’re using; this is how much water we are using; this is how much pollution we are generating; these are our carbon emissions,” he says. “We put this all out in a report in 1997 when that was crazy town. Of course now it’s completely mainstream, and all the big companies do sustainability reporting.”
In 1997, not too many of Interface’s customers were asking about the company’s environmental impact, but by being the first to disclose it—even more so because they disclosed it without being asked to—they won the hearts and minds of many customers and consumer groups, and have reaped fiscal rewards accordingly. There now seems to be a similar tipping point occurring in the marketplace with product level disclosures. “When we put out our first EPD in 2009, there was no demand for that either,” Davis says. “But when LEED V4 came out in 2012 and suddenly EPDs were a thing, we already had them for all of our products. We were already able to show improvement in our EPDs when other people had only just published their first EPDs.”
There are other direct economic incentives linked to transparency initiatives. By not just responding retroactively to consumer demand and political mandates for safer and more environmentally friendly materials, Interface stays ahead of the regulatory curve, which has become more and more restrictive over time. It also puts the company in a great position as the movement to put a price on carbon gains political traction. “A lot of companies are going to have a hill to climb if we ever get a price on carbon,” says Davis, “because they haven’t been managing carbon as a business issue. But we are going to be in a great position—we are one of the most decarbonized companies in the world.”
By tying their brand to sustainability at the navel, Interface has grown the market for environmentally sound products—a positive feedback loop that keeps on giving. But as leaders in the field, they face intense scrutiny; as trailblazers, they’re the ones that have to find the way. This is why the company relies on a squadron of experts that specialize in the nitty gritty science of quantifying sustainability claims. Early environmental reporting methods varied considerably and tended to emphasize areas where a company had strengths and deemphasize their weaknesses. Of course that approach doesn’t hold water anymore, but the science of environmental and health impact reporting continues to evolve.
Transparency has emerged as the great equalizer in this effort, says Davis, who likes to draw a comparison with the game Go Fish. If everyone put their cards on the table, the psychology of the game changes immediately. It’s no longer about trying give the impression of having the best hand (no matter how abysmal it is), and the real game of making concrete operational changes can begin. “It changes the conversation,” says Davis. “We’ve made a point of trying to claim leadership in this space, and you expect your leaders to be continuously improving. If we were to put out an EPD and say here is our footprint now, and then we put one out two years later and say our footprint has actually gotten bigger, that doesn’t really wash.”
Similarly, disclosing the data that goes into an EPD makes it harder to hide out behind dubious “greenwashed” claims. For example, “recyclable” doesn’t mean much if there isn’t a facility nearby where a product can be recycled and there is no mechanism in place to ensure contractors take it there. Interface publishes a sustainability blog in Europe called Cut the Fluff, which is exactly what EPDs are designed to do. “Once LEED became mainstream, it’s like there was this plateau where everyone was green enough,” Davis says. “Everyone knew they had to have a green claim, and they had one. But when you start to quantify things and put sustainability more in the realm of data, people can scrutinize you and ask what more can you do.”
The goal now, says Davis, is to get the building products industry to the point where health and environmental disclosures are akin to the nutritional facts labels on food products—standardized across all products types and easy enough to understand so that everyone, including everyday consumers, has at least a basic idea what those numbers mean. EPDs are still evolving, and HPDs are emerging as another piece of the puzzle, one that Interface is actively working to refine. “But in the meantime we can establish a relationship with consumers that isn’t just based on the assumption that industry is going to try to get away with anything they can,” says Davis. The building products industry as a whole may not be there quite yet, but that has been the modus operandi at Interface for the last 20 years.