Ray Anderson: The business logic of sustainability

Speaker: Ray Anderson

Length: 16:39

Summary

In 1973, Ray read from “The Ecology of Commerce” that business and industry is

  1. the major culprit of the decline of the biosphere, and
  2. the only institution large and powerful enough to fix the problem.

The environmental impact equation is Impact = Population x Affluence x Technology. Ray’s focus as CEO of a carpet manufacturer was on the ‘Technology” side – his goal was to use technology to improve the environment, turning impact into Impact = Population x Affluence / Technology. Since embracing this goal, his greenhouse gas has dropped by 82%, while sales have risen by 2/3rds and profits doubled. His goal is still zero impact – mission zero, which is even better for business, as an important market differentiator.

His achievements so far have shown the following benefits, and mission zero is going to increase profits considerably by the same action

  • Decreased costs: $400million savings and zero waste – this alone has paid for the project, and products have continued to be produced at similar high quality
  • Design for sustainability has attracted high quality candidates and galvanised them around the shared goal for zero impact
  • Goodwill of the market: the drive for zero waste has given them much more sales than pure marketing.

If Ray’s carpet company- a petroleum intensive manufacturer, can achieve these goals and recognise the benefits, then any business can do the same. His idea is to further extend the Environmental Impact equation, decreasing affluence to be less reflective of pure wealth and more what is necessary to stay happy.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s