Carpet to Coats: Reducing Waste & Helping Humanity Tom Norris, Al Renner, Edward Taylor 1

Agenda Abstract: Al Company Profile: Edward Developing TBL Framework: Edward Sustainability Deployment: Tom Outcomes & Impacts: Al Ongoing Sustainability Practices: Edward Challenges & Opportunities: Tom Local & National Impact: Al Audit Instrument:Tom Income Statement: Edward Balance Sheet: Tom 2

Abstract Non-profit organization Nylon coats from recycled carpet 5.9 billion lbs carpet discarded % in landfills; 4% recycled Markets – charities, govt. agencies, retail Addresses TBL – Planet, People, Profit Start Up Cost $ 3 million 80/20 plan for start up capital 3

Company Profile Location Building specifications and cost 6 Business processes Key elements of manufacturing process 4

Developing TBL Framework The three founders of Carpet to Coats strongly believe that the true purpose of business extends beyond just making a profit established five functional priorities: – (1) to receive the carpet recycler’s raw materials – (2) to make durable and functional coats – (3) to distribute the final product to various retailers and non-profit organizations – (4) to increase the number of domestic carpet donators – (5) to solicit contributions from public and private investors who want support our business 5

Sustainability Deployment Each department will be assigned a liaison responsibility for SMS initiatives (includes outsourced services) Ensure a minimal impact to the environment during all processes Improve internal and external social conditions Bring economic growth to our supplier and the surrounding community 6

SMS Environmental 7

SMS Social 8

SMS Economic Implementing the Environmental and Social aspects will also bring Economic benefit such as: – Employee retention and recruiting Reduces training costs & increase productivity. Passionate employees – Reduced costs of shipping – Increased job opportunities 9

SMS Action Plan 10

SMS Action Plan (Cont) 11

SMS Action Plan (Cont) 12

Outcomes & Impacts Operations Personnel Management – Carpet donation on site encourages recycling – Diverting 600,000 lbs of carpet from landfill/year – Package Flow Tech for delivery routes Personnel Management – Lost work time reduced 20% via health & safety – Communicate sustainability commitment to employees – Environmentally friendly admin processes 13

Outcomes & Impacts Supplier – Shaw’s Evergreen Nylon Recycling – Evergreen carpet reclamation program – CARE awards for recycling innovation – Has reclaimed 300 million pounds of post- consumer carpet since 2006 Stakeholders – CARE effort has three interlinked goals – Charity customers improve People aspect of TBL 14

Ongoing Sustainability Practices Integration into business processes Integration into compensation and performance management Employee buy-in 15

Challenges & Opportunities Increased costs upfront & additional costs to maintain sustainability. – Managers examining the workflow for operations Training. – SMS team – Employees must understand our SMS policy, – SMS audit team 16

Challenges & Opportunities Employees must be convinced that it is a worthwhile strategy. – Employees must embrace the culture of sustainability Consumer’s preference – Some customers may wonder if the coat is free of undesired material. – consumers tend to view sustainable products high in ethicality, but may think the product lacks the performance of normal produced goods 17

Challenges & Opportunities Ahead of any possible environmental legislation passed here or internationally. – Reduced disruptions to business Partnership with Shaw's Evergreen Nylon Recycling will give a strong foundation to implement our own sustainability program. – Their example and experience will certainly give us some key insights for implementing sustainability in the manufacturing industry. 18

Challenges & Opportunities Our community used carpet recovery site – Surrounding businesses can donate their used carpet at our location instead of the landfill. – Financially beneficial for them as they can possibly avoid landfill fees. Marketing ability. – Our SMS could enable us to increase sales to federal, state, and/or city services that have a green purchasing initiative. – Retailers that have green conscience customers. 19

Local & National Impact Sustainability - Labor & Human Rights – HR policies provide labor rights per United Nations – Clean safe working conditions – Competitive wages & benefits/incentives Sustainability – Environmental Principles – 1 st priority is environmental aspect of TBL – Intergenerational equity via reducing carpet waste stream – Managing economic growth to be green 20

Audit Instrument 21

Audit Instrument (Cont.) 22

Audit Instrument (Cont.) 23

Audit Instrument (Cont.) 24

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Questions? 29