Cut The Fluff Series 3

Resource efficiency the new watchword of sustainability

By Ramon Arratia June 2012 www.interfaceflorcutthefluff.com www.interfaceflor.eu/gobeyond

Resource efficiency the new watchword of sustainability

Resource efficiency the new watchword of sustainability

Theres a growing global consensus that were at a crossroads on the environment. Not only do we face the increasingly urgent challenge of climate change, but we are also witnessing unprecedented demands on energy and fuel, water and material resource scarcity, huge population and life expectancy growth, concerns about food security, and a growing consumerism in the East that is putting an added strain on the global store of raw materials. urgently required at a scale and greater pace than current initiatives, policies or strategies are likely to achieve. They also argue that businesses, rather than governments, need to play the major role in making this happen. And this is not just a question of a few businesses taking the lead. To achieve this urgent transition, every company must deliver resourceefficient growth. The management consultancy McKinsey sees things in a similar light. Its recent study, Resource Revolution: meeting the worlds energy, materials, food, and water needs, argues that resource productivity improvements could satisfy nearly 30% of demand by 2030. However, it warns that only 20% of the potential is readily achievable and 40% will be hard to capture. However, KPMG - in its own report, Expect the unexpected: building business value in a changing world - is optimistic that increasing resource efficiency makes good business sense. One rather negative incentive is that as developing countries industrialise rapidly and global demand for material resources increases dramatically, businesses are more likely to face trade restrictions that clamp down on the use of raw materials. If companies can use resources more efficiently then they may be able to prevent this eventuality.

Resource productivity improvements could satisfy nearly 30% of demand by 2030.

Recent rises in global GDP and inroads into tackling poverty have largely been achieved by increasing economic growth. But the resourcedependent models that have allowed this to happen can no longer be sustained. In the past, increases in productivity have often come through more efficient use of labour, but the opportunity for further gains here is limited. To continue to make progress we need to squeeze more out of the resources at our disposal. Resource efficiency will become the new watchword of sustainability. Accenture and the World Economic Forum recently produced a report looking at how to make consumption more sustainable by decoupling growth from environmental impact. They suggested that $2 trillion worth of economic output could be at risk by 2030 if major global economies fail to respond to shortages in the supply of just one resource - iron (and, more importantly, the steel that comes from it).

Regulatory frameworks around the world must change to reward manufacturers of products that are more resource efficient.
More positively, greater resource efficiency also creates a business opportunity; it improves productivity, reduces costs and enhances competitiveness. If companies are less dependent on the availability of certain raw materials, they are less vulnerable to supply fluctuations and hikes in prices. This in turn means they can offer customers a more reliable supply of their products.

This demonstrates the scale of the challenge we are up against. Accenture and the WEF conclude that the need for rapid action to shift towards a resource-efficient economy is high - and that despite some successes to date, change is now

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Resource efficiency the new watchword of sustainability The challenge of resource efficiency is beginning to exercise the minds of governments as well as business analysts. In September 2011 the European Commission produced a white paper on a resource-efficient Europe, which argues that it is perfectly possible to produce more value with fewer inputs, and sets out a vision for the structural and technological changes needed to make this happen by 2050. At Interface we have already begun to take on this challenge. our innovative TacTiles system means carpet tiles can be fixed in position without using liquid glue, almost banishing the environmental footprint of the adhesive used in traditional carpet tiles. random design tiles generate just 1-2% waste during installation, compared with 3-4% of a normal a normal carpet tile and up to 12% for broadloom carpet. ultrasonic cutting equipment is doubling productivity, reducing excess trimmings and improving efficiency. This idea was borrowed from the aeronautical industry.

LCA gives your designers a clear objective to guide the design of your products, focusing on reducing key impacts rather than creating feel-good green gimmicks.
Resource efficiency fits well with our Mission Zero goal of delivering zero negative impacts on the environment by 2020 while maintaining and even improving profitability. Since 1996 we have made concerted and successful efforts to reduce our use of resources, not least because using less material reduces production costs. Today, for instance, our waste costs per unit of product are 41% lower than they were in 1995.

As KPMG has predicted, at Interface we have discovered that new markets can be found from an innovation-led focus on resource efficiency. Weve found, for example, that, our Microtuft flat carpet tiles appeal to certain regions that have not traditionally been interested in carpets, such as Spain, Italy or the Nordic countries. In some of these countries Microtuft now accounts for more than 40% of our sales. But despite clear business benefits, we have mainly been treading this path because we believe it is the right thing to do. If other companies are to embrace this radical agenda - in their tens of thousands as Accenture and WEF suggest then as a society we need to create incentives for them to explore and take up resource efficiency. That means current regulatory frameworks around the world must change to reward manufacturers of products that are more resource efficient.

We have introduced several successful measures on radical resource efficiency:

we have created Microtuft, a new range of carpet tile with around 50% less yarn than conventional carpet. Yet this has not sacrificed performance, as the biggest contributor to both carbon footprint and the depletion of petrochemical resources is the nylon yarn in carpet. from all our raw materials purchased globally, 44% are recycled or bio-based, saving a significant amount of virgin resources. we introduced a 100% recycled nylon in 2011, even though we had been told in the 1990s that this would be impossible. More than 140 colour shades in our product range now use this 100% recycled material.

If EPDs were the norm, then it would be easy for everyone to know which products have more or less impact in terms of resource efficiency.
The best place to start is from the central point of Environmental Product Declarations (EPDs). An EPD reveals the ingredients of a product, its methods of production, and the full environmental impact of each stage of its life cycle, measured

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Resource efficiency the new watchword of sustainability From 2010, if the average CO2 emissions of a manufacturers fleet exceeded its limit in any one year, the company had to pay an excess emissions premium for each car registered. With such significant financial implications, the impact of this approach was almost immediate. Within In France, the authorities are looking just one year of the regulation coming into force, for example, the UK car industry had at introducing a requirement that achieved a reduction in tailpipe emissions all environmental claims related to of more than 5%, compared with just products must be based on an EPD. 2.2% in the eight years up to 2006. EPDs are becoming more prevalent in Europe: they are already widely used in the construction sector, for example. And at Interface we have committed to produce EPDs for all our carpet tiles. If EPDs were the norm, then it would be easy for everyone to know which products have more or less impact in terms of resource efficiency. That would be good news for procurers, who are struggling to establish which of the products they need to buy is better for the environment. It would also be good for consumers who want to buy more ethically. And good for companies to benchmark against. If EPDs are universally adopted, we will also have a clear and simple basis for assigning tax benefits to products that have greater resource efficiency. For example, the best products could qualify for lower product taxes (such as VAT) over a period of time. Additionally, EPDs could eliminate greenwash. In France, the authorities are looking at introducing a requirement that all environmental claims related to products must be based on an EPD. This would be a neat way of making EPDs the norm without dictating that they should be mandatory. A similar transformation could be achieved in other sectors by applying a focus on resource efficiency through EPDs at European level, linking performance to financial penalties or rewards. If common magic metrics can be agreed by product category and measured through EPDs, then the European Union can set minimum standards, rewards and penalties as well as industry targets - based on those metrics at EU level. As an increasing number of companies focus on EPDs, they are quickly discovering where they can increase their resource efficiency. So if the EU wants to help business move in this direction, then it must harness the power of EPDs as soon as possible. in several impact categories such as impact on climate change (kg CO2 eq), water use (litres) or acidification (kg SO2 eq), to name but a few. The right measures will highlight any reductions in resource use.

A visionary landfill ban by 2020 would spark into life a new industry producing post-consumer raw materials, as opposed to just focusing on waste management.
Another way of increasing resource efficiency would be to ban landfill. A visionary landfill ban by 2020 would spark into life a new industry producing post-consumer raw materials, as opposed to just focusing on waste management. Bans could be implemented immediately on the landfilling of certain items where best available recycling technology is already available, and this would scale up existing technologies. At Interface we are lobbying for a European ban on the landfill of carpet even as we continually improve our technology to recycle carpet tiles.

One of the best ways to appreciate the potential transformative power of EPDs in this area is to look at the progress made by the European car industry since a 2009 EU regulation introduced EPDs as the basis for requirements on tailpipe emissions. The regulation required car manufacturers to decrease average tailpipe emissions across their portfolio to 130gCO2/km by 2015 and 95gCO2/ km by 2020. This forced each manufacturer to create an EPD for each of its cars based on gCO2/km.

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Resource efficiency the new watchword of sustainability

About Interface, Inc.

Established in 1973, Interface, Inc. (NASDAQ: IFSIA) is the worldwide leader in design, production and sales of environmentally responsible modular carpet, manufactured for the commercial and institutional markets under the Interface brand, and for consumer markets as FLOR. The company is also a leading designer and manufacturer of commercial broadloom and modular carpet under the Bentley Prince Street brand. Interface was one of the first companies to publicly commit to sustainability in the mid-nineties, and the company has been widely recognized for its achievements in this area since then. Its products have also achieved numerous awards specifically for design and innovation, the most recent being The Athenaeum Good Design Award for World Textiles.

About the author

Ramon Arratia is the Sustainability Director Interface EMEAI. His focus is on continuing to develop the companys sustainability strategy towards Mission Zero as well as reviewing products, services and business processes to ensure that they are as sustainable as possible. Ramon plays a leading role in Interfaces Lets be clear campaign, an anti-greenwash drive calling for full transparency in how companies declare the environmental impact of their products. He has also been instrumental in Interface commitment to have all products covered by Environment Product Declarations (EPDs) by 2012. Ramon is also leading Interfaces war on waste campaign, an initiative which calls for action to change European Waste Legislation within the flooring and construction industry.

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