Whither Sustainability?

Sustainability

Sustainability, as that term applies to manufacturing, owes its origin to Limits to Growth, [1] which was published in 1972. Limits to Growth describes a systems 3P Graphicanalysis of trends in the earth’s population, industrialization, pollution, food production and resource depletion, with projections into the future. In essence, Limits to Growth emphasized that humanity’s increasing demands for economic development are overwhelming the natural world, and that industry is the primary agent for doing so. So begins the quest for sustainable economic growth and for the technology and practices that enables economic development without destroying the natural world upon which all of us rely.

Mission Zero

In 1994, some customers were asking Interface Corporation, a manufacturer of carpet tiles, about Interface’s vision regarding the environment. Ray Anderson, founder and CEO of Interface Corporation, recognized that the usual response – that Interface was in full compliance with all applicable environmental laws – just wasn’t good enough. His response was to redirect his billion dollar company toward a goal of zero environmental impact.

“I wanted Interface, a company so oil intensive that you could think of it as an extension of the petrochemical industry, to be the first enterprise in history to be truly sustainable – to shut down its smokestacks, close off its effluent pipes, to do no harm to the environment, and to take nothing from the earth not easily renewed by the earth.” [2]

Moreover, Ray Anderson proposed to accomplish this by the year 2020, and to make a profit while doing so. Consequently, Interface established a system of yearly milestone objectives toward Anderson’s vision. Today, 20 – odd years later, Interface remains roughly on course.

Climate Take Back

However, the recent global financial crisis severely impacted the construction industry, Interface’s primary market. In 2011, Ray Anderson passed away. As a result of hard economic times and the loss of their visionary leader and founder, Interface lost some of their some of its edge. The direction continued, but the audaciousness faded.

Now, Interface is renewing its initiative by redefining what Sustainability means in industry. Interface’s new mission — Climate Take Back – builds on and goes beyond Mission Zero’s “do no harm” initiatives: Climate Take Back is proactive. Climate Take Back includes four bold commitments:

>> To bring carbon home and reverse climate change – That is, to remove carbon compounds already present in the atmosphere.

>> To create supply chains that benefit all life – That is, to insist on proactivity from entire supply chains.

>> To make factories that are like forests – That is, to create manufacturing processes and entire factories that mimic nature.

>> To transform dispersed materials into products and goodness – That is, to recover and reuse widely dispersed refuse materials on a global scale.

On 6 June 2016, Joel Makower of GreenBiz published an insightful article on Interface’s new initiatives. It is well worth reading for anyone interested in both manufacturing and sustainability, and well worth careful study for those who want to make a difference.

Here is the link:

https://www.greenbiz.com/article/inside-interfaces-bold-new-mission-achieve-climate-take-back

For Smaller Manufacturers

Interface has long been a champion of, and roll model for, Sustainability in manufacturing. The switch from “do no harm” to “make the world a better place” significantly raises the bar. Beyond that, Interface’s actions and corresponding results dramatically demonstrate the power of visionary leadership.

Chuck - Red RocksThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

(Chuck@JeraSustainableDevelopment.com)

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] Donella (“Dana”) Meadows, et al, Limits to Growth, Signet Books (1972)

[2] To learn more about Ray Anderson and Interface, Ray’s book is a good read:

Ray C. Anderson, Confessions of a Radical Industrialist, St. Martins Press (2009)

Environmentalism and Sustainable Development – Take 2

This post is a revision and upcycle of Environmentalism and Sustainable Development from April 2014. It brings context and a much needed degree of clarity to the often convoluted discussion of Sustainability as applied to business.  – C.H.


Some Operational Definitions

>> EnvironmentalismThe active recognition that the natural world sustains all life on this planet, that the capacity of the natural world is limited, and that the natural world needs active protection from human abuse and degradation.

>> Sustainable DevelopmentEconomic activity that meets the needs of humanity today without sacrificing the needs of future generations.

>> SustainabilityA business philosophy through which firms pursue long-term viability and growth while actively respecting the needs of the natural world and of humanity.

The Big Picture

Here’s the big picture view of Sustainable Development: Consider the entire planet, all of humanity, and the entirety of world industry, [1] where “industry” includes manufacturing, mining, agriculture, forestry and any other activity the produces commercial “stuff” (goods, not services). Humanity currently consists of about 7 billion of us, expected to grow to around 9.5 billion by 2050. Many are very poor. Almost all want to become richer and consume more, which is happening. Something like 2.5 billion people are expected to rise above subsistence poverty over the same period. So, the global demand for commercial “stuff” continues to increase. Rapidly.

3P GraphicHowever, the earth isn’t getting any bigger. The sum total of natural resources isn’t growing either. Nor is the space available for waste disposal. The natural world is under duress, and increasing demand for “stuff” is going to increase that pressure. So, the ecological “bottom line” improves when detrimental impact on the natural world decreases, while the social “bottom line” improves when the welfare of humanity improves.

The latest report from the UN’s International Panel on Climate Change cites some of the dangers the natural world — and humanity with it — may face in the near future. However, should the poorer fraction of humanity continue to be denied improved access to economic benefits others enjoy, social and political upheavals may well cause as much, if not more misery than natural disasters.

It is for industry to resolve these two: to create value, in the form of the “stuff” that an increasing, and increasingly prosperous, population demands; while preserving or, better yet, enhancing the natural environment upon which humanity relies today and will continue to rely in the future. All the while, in doing so, earning sufficient profits to keep the improvement process going.

Why is this for industry to resolve? As entrepreneur and environmentalist Paul Hawken put it: “… not only is business and industry the principal instrument of global destruction, it is the only institution large enough, wealthy enough, and pervasive and powerful enough to lead humankind out of the mess we are making.” [2]

The Way Forward

What does all of this mean for actually operating a manufacturing business? It means that times have changed. Today, all manufacturers face a competitive environment driven by a confluence of potent change drivers which substantially increase the scope of issues to which managers must attend. Surviving, let alone thriving, in today’s competitive environment requires a fresh line of strategic thought that is aligned to present realities. Fortunately, such a line of strategic thought — Sustainability — does exist. More fortunately still, it works!

Ray Anderson writes about his company’s experience: [3]

“Here’s the thing: Sustainability has given my company a competitive edge in more ways than one. It has proven to be the most powerful marketplace differentiator I have known in my long career. Our costs are down, our profits are up, and are products are the best they have ever been. It has rewarded us with more positive visibility and goodwill among our customers than the slickest, most expensive advertising or marketing campaign could possibly have generated. And a strong environmental ethic has no equal for attracting and motivating good people, galvanizing them around a shared higher purpose, and giving them a powerful reason to join and stay.”

So, Environmentalism — actions to protect the natural world — is a necessary condition for assuring humanity’s future. Humanity, however, also demands continued economic development. For humanity to be sustainable — to persist indefinitely — economic development cannot continue to be at the expense of the natural world. Paul Hawken is right: the resolution depends on industry. However, “industry” is a collective term. The decision to pursue Sustainability lies with each individual unit of production. Remarkably, manufacturers that choose to pursue Sustainability find significant competitive advantages. The natural world wins — humanity wins — sustainable manufacturers win.


Chuck - FranceJera Sustainable Development exists as a resource for those that choose to pursue Sustainability.

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … C.H.

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on weekly.


[1] For more on this, see Double Take on the Triple Bottom Line, this blog: http://blog.jerasustainabledevelopment.com/2012/10/03/double-take-on-the-triple-bottom-line/

[2] From Ray Anderson, Confessions of a Radical Industrialist, St Martin’s Press (2009), page 14, citing Paul Hawken, The Ecology of Nature, Harper Business (1993, revised 2010).

[3] Ray Anderson, op cit, page 5.

 

Goal Setting for a Sustainable Future

Last week’s post, On Goals and Objectives, [i] suggested that a manufacturer’s financial goal reflect financial sustainability by emphasizing an adequate return on capital employed, taken across the business cycle. A business that is not sustainable in a financial sense ceases to exist, so it can’t be sustainable in any other sense either.

However, to be sustainable in a financial sense requires more than a stated goal, regardless of how well formulated that goal may be. For a firm to be sustainable in a financial sense – or any other sense – requires a sustainable environment in which it can operate. “Environment”, as used here, doesn’t just refer to the natural world. Rather, “environment” also includes a multiplicity of human aspects, such as the increasingly globalized economy, political factors such as regulation and taxation, educational resources and much, much more.

Triple Bottom Line – Jera Style

Sustainability guru John Elkington’s concept of a Triple Bottom Line provides the most frequently used framework for discussing Sustainability. Elkington’s core idea is that firms should foster return on environmental assets employed and return on social / cultural assets employed on an equal basis with fostering return on financial assets.

3P Diagram with captionThe graphic to the right presents the Triple Bottom Line somewhat differently. In this view, industry (manufacturing, along with agriculture and mining – businesses that produce tangible goods) is in symbiotic relationship with the natural world and with humanity. Industry draws resources from nature and uses nature as a sink for wastes. Industry draws talent, creativity and physical efforts from humanity, while humanity relies on industry for the “stuff” of sustenance and affluence, and for the ability to pay for it. Industry is in the middle, charged with interfacing and reconciling the other two. [ii]

It is clear that the natural world is under great pressure due to an increasing human population and from an increasing per capita affluence, both facilitated through industry. Manufacturing CEO Ray Anderson provides a remarkable insight (or, more properly, an epiphany):

“ According to Hawken, not only was business and industry the principle instrument of global destruction, it was also the only institution large enough, wealthy enough and pervasive and powerful enough to lead humankind out of the mess we were making.” [iii]

Mess indeed. But symbiosis works both ways. As a report from consulting firm McKinsey & Company’s global Sustainability & Resource Productivity practice [iv] points out, leading humanity out of the mess offers an extraordinary business opportunity. According to McKinsey, that opportunity includes  “by the mid – 2020s, there could be a dozen or more US$100+ billion global markets scaling up around the combination of resource productivity and clean tech.” Of course, each of those new global markets will have value chains stretching upstream and down, meaning opportunities for many, many businesses.

Back to Goals

On first thought, the Triple Bottom Line idea seems to suggest that at least three primary business goals are needed – one concerning the financial sustainability of the firm, a second regarding the firm’s relationship with the natural world, and a third pertaining to the firm’s interactions with humanity.

However, the symbiotic relationships among the components of the Triple Bottom Line suggest that it is practicable to formulate a single goal that embraces all three aspects of Sustainability.  A single clear, coherent goal, deployed throughout the organization through well aligned objectives can provide the focus needed to keep a complex system, which a manufacturing business is, operating effectively.

In 1995, Ray Anderson established such a goal for his billion dollar global carpet manufacturing firm. That goal was to prosper as a company while eliminating all waste discharges to landfill, eliminating pollution to air or water and taking nothing from the earth that the earth cannot renew rapidly and naturally – and to do so by 2020.

What happened? — Anderson put it this way:

“Here’s the thing: Sustainability has given my company a competitive edge in more ways than one. It has proven to be the most powerful market differentiator I have known in my long career. Our costs are down, our profits are up, and our products are the best they’ve ever been. It has rewarded us with more positive visibility and goodwill among our customers than the slickest, most expensive advertising campaign could possibly have generated. And a strong environmental ethic has no equal for attracting good people, galvanizing them around a shared higher purpose, and giving them powerful reason to join and to stay.” [v]

For Manufacturers of all Sizes

We have all learned that Quality is not a cost – consistent product quality reduces costs while retaining or even increasing revenues. Quality is not optional in today’s world. We have all learned that Safety is not a cost – remaining accident free reduces costs and frees human beings from painful injuries. Safety is not optional in today’s world. We all need to learn that Sustainability is not a cost – Sustainability is a better way to do business. A business that isn’t Sustainable simply doesn’t have a future.

Chuck - Red Rocks3Thoughtful comments and experience reports are always appreciated.

 

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

 

P.S: Contact me when your organization is serious about prospering in the 21st century … CH

 

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[i] On Goals and Objectives, this blog, http://jerasustainabledevelopment.com/2015/03/28/on-goals-and-objectives-2/

[ii] For more on the Triple Bottom Line, see Double Take on the Triple Bottom Line, this blog, http://jerasustainabledevelopment.com/2012/10/04/double-take-on-the-triple-bottom-line/

[iii] Ray Anderson, Confessions of a Radical Industrialist, St. Martin’s Press (2009), page 14. Anderson refers to Paul Hawken, The Ecology of Commerce, originally published in 1993, revised edition in 2010. Note: These two books, both written by entrepreneurial business CEOs, should be required reading for anyone interested in sustainable business.

[iv] Jeremy Oppenheim, How to make Green Growth the new normal, McKinsey & Company, Sustainability & Resource Productivity Practice (May 2013). Available at: http://mckinseyonsociety.com/make-green-growth-new-normal/

[v] Ray Anderson, Confessions of a Radical Industrialist, op cit, page 5

 

Environmentalism and Sustainable Development

17 April 2014

>> EnvironmentalismThe recognition that the natural world sustains all life on this planet, that the capacity of the natural world is limited, and that the natural world needs active protection from human abuse and degradation.


>> Sustainable DevelopmentEconomic activity that meets the needs of humanity today without sacrificing the needs of future generations.


The Big Picture


Here’s the big picture view of Sustainable Development: Consider the entire planet, all of humanity, and the entirety of world industry, [1] where “industry” includes manufacturing, mining, agriculture, forestry and any other activity the produces commercial “stuff” (goods, not services). Humanity currently consists of about 7 billion of us, expected to grow to around 9.5 billion by 2050. Many are very poor. Almost all want to become richer and consume more, which is happening. Something like 2.5 billion people are expected to rise above subsistence poverty over the same period. So, the global demand for commercial “stuff” continues to increase. Rapidly.

3P GraphicHowever, the earth isn’t getting any bigger. The sum total of natural resources isn’t growing either. Nor is the space available for waste disposal. The natural world is under duress, and increasing demand for “stuff” is going to increase that pressure. So, the ecological “bottom line” improves when detrimental impact on the natural world decreases, while the social “bottom line” improves when the welfare of humanity improves.


The latest report from the UN’s International Panel on Climate Change cites some of the dangers the natural world — and humanity with it — may face in the near future. However, should the poorer fraction of humanity continue to be denied improved access to economic benefits others enjoy, social and political upheavals may well cause as much, if not more misery than natural disasters. 


It is for industry to resolve these two: to create value, in the form of the “stuff” that an increasing, and increasingly prosperous, population demands; while preserving or, better yet, enhancing the natural environment upon which humanity relies today and will continue to rely in the future. All the while, in doing so, earning sufficient profits to keep the improvement process going.


Why is this for industry to resolve? As entrepreneur and environmentalist Paul Hawken put it: “… not only is business and industry the principal instrument of global destruction, it is the only institution large enough, wealthy enough, and pervasive and powerful enough to lead humankind out of the mess we are making.” [2]


The Way Forward


What does all of this mean for actually operating a manufacturing business? It means that times have changed. Today, all manufacturers face a competitive environment driven by a confluence of potent change drivers which substantially increase the scope of issues to which managers must attend. Surviving, let alone thriving, in today’s competitive environment requires a fresh line of strategic thought that is aligned to present realities. Fortunately, such a line of strategic thought — Sustainability — does exist. More fortunately still, it works!


Ray Anderson writes about his company’s experience: [3]


“Here’s the thing: Sustainability has given my company a competitive edge in more ways than one. It has proven to be the most powerful marketplace differentiator I have known in my long career. Our costs are down, our profits are up, and are products are the best they have ever been. It has rewarded us with more positive visibility and goodwill among our customers than the slickest, most expensive advertising or marketing campaign could possibly have generated. And a strong environmental ethic has no equal for attracting and motivating good people, galvanizing them around a shared higher purpose, and giving them a powerful reason to join and stay.”


So, Environmentalism — actions to protect the natural world — is a necessary condition for assuring humanity’s future. Humanity, however, also demands continued economic development. For humanity to be sustainable — to persist indefinitely — economic development cannot continue to be at the expense of the natural world. Paul Hawken is right: the resolution depends on industry. However, “industry” is a collective term. The decision to pursue Sustainability lies with each individual manufacturer. Remarkably, manufacturers that choose to pursue Sustainability find significant competitive advantages. The natural world wins — humanity wins — sustainable manufacturers win.
Jera Sustainable Development exists as a resource for those that choose to pursue Sustainability.


Chuck - France 2012-3Thoughtful comments and experience reports are always appreciated.


…  Chuck Harrington
(Chuck@JeraSustainableDevelopment.com) 


P.S
: Contact me when your organization is serious about pursuing Sustainability … CH


This blog and associated website (
www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.


[1] For more on this, see Double Take on the Triple Bottom Line, this blog:

http://blog.jerasustainabledevelopment.com/2012/10/03/double-take-on-the-triple-bottom-line.aspx

 

[2] From Ray Anderson, Confessions of a Radical Industrialist, St Martin’s Press (2009), page 14, citing Paul Hawken, The Ecology of Nature, Harper Business (1993, revised 2010).

 

[3] Ray Anderson, op cit, page 5. Anderson’ company is Interface Corporation, a billion dollar global carpet manufacturer.