1 8-c. Sustainability & Natural Resource Management? A Case Study in Private Sector Solutions Larry D. Sanders (SPRING 2006) Dept. of Ag Economics Oklahoma State University

2 INTRODUCTION u Purpose: –to become aware of one example of private sector innovation to attain sustainability u Learning Objectives. To understand/become aware: 1.government intervention is not the only solution. 2. how the private sector can be profit oriented and move toward goals of sustainability that consider social benefits and costs.

3 Examples of “No Government” or “Government and Private Sector Partnerships” u Non-traditional Farming/Ranching u Land Trusts u Utility and Energy sectors u Research and Development of new technologies that are more environmentally friendly and/or more conserving of nonrenewable resources u Private industry (Interface case to follow)

4 Can Private Sector Profit Motive Coexist with Environmental Goals? u Traditional argument: –Choose profits and survival or environmental protection and business failure –Choose to be competitive or lose competitive edge –Choose economic development or environmental protection –Government must intervene to stop private greed from destroying/exploiting the environment u Soft path model: –Profits and environmental protection can coexist –Some companies may be both competitive and protect the environment –Some companies can self-regulate and achieve comprehensive sustainability that considers economics, environment and community

5 Case Study: Interface Inc u Atlanta-based commercial flooring & interiors business u Founded by Ray Anderson in 1973 u Leading a worldwide effort for sustainable development u Built the company into the world’s largest commercial flooring business u Inspired by “The Ecology of Commerce”, by Paul Hawken (1994) u A petro-intensive company striving to “never have to take another drop of oil from the earth” u Bred a culture of “ferocious cooperation”

6 Case Study: Interface Inc. Vision “To be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions: People, process, product, place and profits—by 2020—and in doing so we will become restorative through the power of influence.”

7 Case Study: Interface Inc. Mission “... become the first name in commercial and institutional interiors worldwide.... Create an organization wherein all people are accorded... respect and dignity.... honor the places where we do business,.. a corporation that cherishes nature and restores the environment.... lead by example... including profits, leaving the world a better place than when we began....

8 Case Study: Interface Inc. Sustainability Overview u Why important? “... the rate of material throughput is endangering our prosperity, not enhancing it.... we recognize we are part of the problem.... “What’s the solution?... not sure, but we have some ideas.... cure for resource waste that is profitable, creative and practical.... addresses the needs of society and the environment... [decreasing] our costs and... Reduces the burdens placed upon living systems. What we call the next industrial revolution is a momentous shift in how we see the world, how we operate within it, what systems will prevail and which will not....”

9 Case Study: Interface Inc.—”The climb to the top of Mount Sustainability…”—7 Steps 1. Eliminate Waste 2. Benign Emissions—no toxic emissions 3. Renewable Energy—use sustainable energy 4. Closing the Loop—cyclical material flows (retain control) 5. Resource Efficient Transportation—move information, rather than people and products 6. Sensitivity Hookup—create community within and around Interface supportive of sustainability 7. Redesign Commerce—own and external operations

10 Case Study: Interface Inc. --Update u Waste Elimination: $231million savings since 1995 u Energy consumption: down 31% in mfg. fabric & down 35% in mfg. carpet since 1996; over 12% of energy from renewable sources u Greenhouse gas emissions: reduced CO2 emissions by 46% u Water intake: down 78% in carpet process, down 40% in broadloom facilities

11 Case Study: Interface Inc. –Update (continued) u Petro-based raw materials: reduced over 28% u Safety: reduced frequency of injuries by 47% u Social measurements worldwide (2003): social events (250), training/employee (9 hrs avg), charitable contributions ($400 thousand), employee community volunteer hours (12,000), women in mgmt (28%) u Global community (12 plant locations): Thailand, Canada, US, England, Australia, Holland; business offices in over 100 countries

12 Case Study: Interface Inc. --The Natural Step u International non-profit advisory and research organization, science-based u Goal: accelerate global sustainability u Founded: Sweden, 1989 u “Sustainability is fundamentally about maintaining human life on the planet and, thus, addressing human needs is an essential element of creating a sustainable society.”

13 Case Study: Interface Inc. --The Natural Step (continued) u Principles (minimum conditions for sustainability): –Not increasing concentrations of substances extracted from earth’s crust –Not increasing concentrations of substances produced by society –Not increasing degradation by physical means –Meet human needs worldwide

14 Case Study: Interface Inc. --The Natural Step (continued) u Other Case Studies u maries.php maries.php u Bank of America u Home Depot u McDonald’s u Starbucks

15 Case Study: Interface Inc. --Sources u u u Anderson, R.C., Mid-Course Correction Toward a Sustainable Enterprise: The Interface Mocdel, Chelsea Green Publishing. u Benyus, J.M. Biomimicry, Perennial, u Hawken, P. The Ecology of Commerce: A Declaration of Sustainability, Harper Business, August u Hawken, P., A. Lovins, H. Lovins. Natural Capitalism, Little, Brown & Co., Note: Thanks to Leslie Wildesen, Environmental Training & Consulting International, Portland, OR, for introduction to the Ray Anderson story, 2003.

16 L8c: Homework u Find another case study similar to Interface Inc & The Natural Step; introduce the case and summarize the situation and success in a one-page description; be sure to cite sources (13 Apr)—4 points