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CEO Touts Sustainability as Path to Higher Profits

But state business group resists water conservation proposals

April 13, 2005 | By Andy Guy
Great Lakes Bulletin News Service

Interface Flooring Systems

By applying sustainable manufacturing practices to its carpet manufacturing processes, Interface saved $231 million in 10 years.

GRAND RAPIDS — When Interface Inc. CEO Ray Anderson pledged ten years ago to transform his company into a “restorative enterprise,” one of the first ways his engineers responded involved a bit of plumbing.

Somewhere in the tangle of pipes at one of the company’s factories they installed an $8.50 brass nozzle that enabled the world’s largest manufacturer of commercial floor coverings to dial back annual water consumption by two million gallons. While the miniscule adjustment pleased environmentalists, it thrilled company accountants. The nozzle now saves the company more than $10,000 a year.

Under the leadership of Mr. Anderson, who will address a progressive group of business leaders at a conference here next month, Interface has become a poster child for “sustainable” manufacturing, which aims to slash expenses, boost profits, and bolster the company image by paying extremely close attention to environmental performance. Interface, for example, has dramatically improved its water use practices. The company has reduced the number of pipes funneling liquid waste from its factories to nearby waterways by 47 percent. It also has slashed water use in its carpet-making process by 78 percent.

Strategies like these have reduced Interface’s energy consumption, chemical use, maintenance and repair costs, discharge fees, and water bills and added big savings to its bottom line.

These accomplishments make Mr. Anderson’s upcoming visit here both fitting and ironic. The visit is fitting because he will address the Sustainable Business Forum, a coalition of Michigan companies who are studying and practicing sustainability, and because he will be in a state where using water in ways that simultaneously promote economic growth and ecological protection is essential to future prosperity.

But the irony is that Mr. Anderson will also be in a state where many business organizations actively oppose legislative proposals that would, for the first time in Michigan’s remarkably water-rich history, mandate conservation for industrial-scale water users. For the past year, the business organizations have persuaded Michigan’s Republican-led state Legislature to ignore Democratic Governor Jennifer Granholm’s Water Legacy Act. And, last month, many of these groups essentially threatened to quit a state-sponsored work group charged with studying water regulations. The groups claim that regulation will hurt business, kill jobs, and worsen the state’s economy. 

Sustainability proponents insist that the opposite is true. They say there’s widespread, strong evidence that sustainability guidelines -- like those the Business and Institutional Furniture Manufacturers Association International, a trade organization based in Grand Rapids, adapted on March 10 -- can increase a company’s profits and make it more competitive. According to Brad Miller, BIFMA’s director of communications and government affairs: “We feel it is important to expose our members, and hopefully other industries, to the long-term value of economic and ecological sustainability.”

Headed in Opposite Directions
But the more traditional business associations continue to view new water regulations with great skepticism. In a letter dated March 1, 19 business associations participating in the Water Policy Work Group called on Steve Chester, director of the Michigan Department of Environmental Quality, to suspend the work group’s meetings and his agency’s efforts to promote modern water policy.

The work group was formed in June 2004 after three years of unsuccessful attempts by several Republican and Democratic legislators to enact water legislation that promotes conservation and ecologically sustainable use. It includes business lobbyists, environmentalists, public officials, and other stakeholders and resource experts. DEQ officials asked the different stakeholders in the work group to negotiate ways to safeguard water resources like wetlands from heavy pumping; promote conservation to ensure adequate supplies for current and future users; and strengthen legal protections against mass water diversions out of the Great Lakes Basin.

In their letter to Mr. Chester, however, the business organizations said that the work group’s efforts are too focused on specific policy details and lack adequate scientific data. The groups claimed that “regulating before establishing an environmental and economic basis is premature. This will result in inappropriate regulation that neither protects the environment nor encourages economic growth.” The letter also said the organizations expected Mr. Chester to cancel the work group’s subsequent meetings.

Signatories included the Michigan Manufacturers Association, the Michigan Chemistry Council, the Michigan Farm Bureau, the Michigan Forest Products Council, and the Michigan Chamber of Commerce, whose local affiliates include both the Grand Rapids and Detroit Regional chambers.

The move clearly frustrated agency officials and environmental groups, who note that the state’s water withdrawal policy lags well behind those of neighboring Great Lakes states, even though Michigan signed treaties and agreements with its basin neighbors promising actions to protect the planet’s largest supply of fresh surface water.

Despite the letter, the Water Policy Work Group’s regular meeting was held as scheduled in March. With several business leaders present, the group reached consensus that its work is both important and useful, according to meeting attendees. The group also agreed to establish subcommittees focused more specifically on topics such as conservation and regulating large withdrawals. But some water policy experts remain unconvinced that the business community is committed to the process.

“Business obviously is not interested in participating in the workgroup that is coming up with new laws to regulate their industries,” said Noah Hall, an attorney with the National Wildlife Federation’s Great Lakes Natural Resource Center in Ann Arbor.

The Power of Sustainability
Large, ill-advised water withdrawals are just one challenge facing the Great Lakes. Other pressing challenges include toxic pollution, invasive species, and the loss of coastal habitat.

The overarching problem, according to some observers, is that the region lacks an ethic of water use and development that is fiscally and ecologically sustainable. What Great Lakes governments need, a growing number of environmental and economic experts agree, is a policy that enables present-day water users to take advantage of the resource today while ensuring it remains in a clean, robust condition for future environmental and economic needs.  

The Sustainability Guidelines recently adapted by BIFMA, which has 240 member companies, are a major step in that direction. Representatives from numerous companies, including Michigan’s own Herman Miller Inc. and Steelcase Inc., developed the guidelines over several years. Basically, the guidelines advise members to:

  • Prepare an environmental policy statement based on economic, ecological, and cultural sustainability.
  • Publicly commit to addressing ecological issues such as energy and water conservation.
  • Comply with and strive to exceed existing government regulations.
  • Establish criteria that stop the release of toxic substances into the environment.
  • Continually review and publicly report the measurable results of their sustainability programs.

Pioneering companies like Interface have followed similar guidelines for nearly a decade and achieved far-reaching fiscal, social, and ecological benefits. The Atlanta-based company has increased its reliance on renewable energy sources, sharply reduced air emissions linked to climate change, and saved more than $231 million by reducing waste in its production process. Interface says that its mission is to become an engine of commerce that, instead of steadily degrading the environment, actively works to restore it through improved environmental performance.

“Sustainability is not a program, department, or marketing initiative; it is a lens through which companies view their business,” said Mark LaCroix, the vice president of contract sales in the company’s Grand Rapids office, who helped author the new BIFMA guidelines. “Sustainability is hard work and will require much innovation, but every company has low-hanging fruit. The important thing is to get started.”

A host of native Michigan companies, including Ford Motor Company, Herman Miller, and General Motors, are also discovering the power of sustainability to reduce costs and improve the conservation of natural resource, particularly water quality and quantity.

Making a Difference
BIFMA’s Mr. Miller did not comment specifically on the contentious water policy debate in Michigan. But he noted the business community’s strategy to stall the issue is uncharacteristic of companies and trade associations that embrace sustainability.   

“The typical business response to the traditional regulatory approach is to get in the bunker and fight off the new law from going into effect,” Mr. Miller said. “The problem with that approach is that you need to have credible alternatives. Going to the meetings and agreeing to participate in developing the remedy is the approach we find more effective.”

This is the approach the DEQ’s water work group is attempting to use.

“Everybody ultimately has the same motive,” Mr. Miller added, “whether it’s to keep a business healthy and going or to keep a community healthy and going. The challenge is getting through all the complex economic, social, and ecological issues to find common ground. Our hope is that the Sustainability Guidelines help our members, and eventually other industries, make a difference.”

Interface CEO Ray Anderson will speak at the Tenth Annual Sustainable Business Conference in Grand Rapids, Mich., on May 11, 2005. This year’s event is entitled “The Future of Commerce: Sustainable Solutions for Business.”    

To view the letter sent by 19 Michigan business associations to the Michigan DEQ last month, click here.

Andy Guy, who writes extensively about sustaining the Great Lakes in the global economy, directs the Michigan Land Use Institute’s Great Lakes Project and reports on Smart Growth from the Institute’s Grand Rapids office. Reach him at aguy@mlui.org.

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