Interface: Turning an Environmental Problem into a Business Opportunity

Introduction

Since it first opened its doors in 1973, Interface has grown into a billion-dollar corporation and the world’s largest manufacturer of commercial carpet tiles.1 Headquartered in Atlanta, Georgia, it has offices throughout the United States, Canada, Europe, and Asia-Pacific. It has sales in 110 countries and manufacturing facilities on four continents. Interface focuses primarily on business-to-business sales to commercial, institutional, and residential markets.

Mission Zero—the company’s promise to eliminate any negative impact it has on the environment by the year 2020—guides Interface’s business strategy.2

Interface pursues sustainability goals without sacrificing its business objectives. Like Dell (Chapter 23), its ambition is to shift from a linear model to a circular economic model. The linear ‘take–make–dispose’ economic model relies on large quantities of cheap, easily accessible materials and energy.3 By contrast, a circular model, which is restorative and regenerative by design, aims to keep materials at their highest utility and value at all times.4 Through the example of the Net-Works initiative, which connects Interface’s yarn manufacturer with a new source of discarded nylon to re-use, this case study highlights the potential of circular economic models in advancing sustainability and business goals.

Pain Points in the Ecosystem

Nylon yarn production is a key source of environmental impact in carpet manufacturer supply chains. The manufacture of yarn is energy-intensive and uses high-impact, oil-based virgin materials. A life-cycle approach to understanding yarn’s impact shows that the environmental footprint of carpeting arises primarily from the point at which raw materials are extracted and processed. In fact, an estimated 68 per cent of the total impact is created at the raw materials stage.5 Therefore, to reduce its environmental impact and cut its dependency on oil, Interface needed to find diverse ways of sourcing raw materials.

One potential source of material for yarn was discovered to be discarded fishing nets. Fishermen in developing countries often discard their nets on beaches or in the sea, where the nets may remain for centuries. According to the organization World Animal Protection (formerly the World Society for the Protection of Animals), more than 640,000 tonnes of fishing gear, including nylon nets, is dumped into oceans every year, according to a UN Food and Agriculture Organisation study in 2009. This is damaging both to marine life and to communities whose livelihoods are heavily dependent on fishing. Old fishing nets do not break down easily, and these nets can cause what is known as ‘ghost fishing’, when unattended nets trap and kill fish and no one benefits from the catch. They also cause problems for divers and other harbour users. According to the United Nations Environment Programme, lost and abandoned fishing gear makes up 10 per cent of all marine litter.

Rather than allowing these tonnes of fishing gear to remain abandoned in the oceans, Interface saw an opportunity to work with its yarn manufacturer, Aquafil, to repurpose it and use it as the building blocks to make carpets. The collection of discarded nets serves an additional social purpose: it complements and strengthens local governments’ solid waste management programmes.6

Moreover, using recycled content in its products has helped Interface respond to the growing market demand for sustainable materials in the building and interior design industry.

According to the International Energy Agency, buildings are responsible for over one third of the world’s greenhouse gas emissions. Selecting sustainable materials has therefore become an important strategy to help interior designers and architects meet both their clients’ and their own sustainability goals. Indeed, the growth in demand for sustainable materials is such that companies that do not shift to increasingly sustainable business models may soon be pushed out of the market and become uncompetitive. Interface sees its products as an important way to help projects achieve green building certification such as BREEAM, DGNB, HQE, and LEED.

Business and Programme Strategy

As part of its Mission Zero goal, Interface is committed to seeking to use using only recycled or bio-based materials by 2020.

In 2012, Interface joined forces with the Zoological Society of London (ZSL) and Aquafil to create the Net-Works programme, a collaborative effort that addresses the growing problem of discarded fishing nets in some of the world’s poorest coastal regions and contributes to achieving Interface’s targets for recycled materials.7 The programme also aligned with ZSL’s goals of developing a new model of community-based conservation: one that would bring immediate benefits to local people and break the traditional cycle of donor dependency, which entails relying on external donations to fund conservation work.8

Working with local communities in the Philippines and Cameroon, Net-Works incentivizes people to gather and sell discarded fishing nets that litter beaches, pollute the ocean, and threaten marine life. The fishermen who collect the nets are typically living in hardship and are confronted by declining fish stocks. They have few opportunities to break the cycle of poverty and escape environmental degradation.9 The nets are cleaned, bundled, and compressed, ready to be shipped to yarn supplier Aquafil. Aquafil then uses its regeneration technology to turn the nets into 100 per cent recycled nylon yarn, called ECONYL, which can be used in carpet manufacturing and fashion. Interface buys its nylon from Aquafil at the market rate.

Interface has worked closely with ZSL, Aquafil, and communities on the technical details of the Net-Works project. An example of this cooperation is the development of the baling machine, which is used to compress the gathered nets. As Jon Khoo of Interface explains:

It was co-designed by Interface engineers, ZSL’s conservation team, and local fabricators; refined following local community feedback; and then turned into a sharable blueprint by Interface’s design team. It’s now being used to successfully bale nets in two continents and is a tangible example of teamwork in action.10

The nets are sold to Net-Works for around 14 pesos a kilogramme (kg), which provides supplemental income to the fishing communities.11 The programme takes a small fee and sells the nets to Aquafil. For every 2.5 kg of nets collected, a family can purchase one kg of rice—this translates into approximately 4,800 extra meals per village annually on the tables of poor families, whose typical monthly household income totals less than $195.12 By 2018, residents of the Philippines and Cameroon had collected over 208 tonnes of discarded fishing nets. The programme has seen participants earn supplemental income equivalent to over 629,800 additional meals.13

Net-Works operates as a social enterprise, with the proceeds of the net sales covering the administration and running costs. The remainder goes to community banks as savings. Community banks, which are at the heart of the Net-Works model, enable local people to save money and take out small loans to invest in education or in new enterprises. The banks also create ‘environment funds’ through which community members pool a portion of their savings to fund local conservation projects; these offerings enable communities to come together and determine where these funds are allocated.14 Since 2012, more than 97 community banks have been established, which have supported at least 2,200 families in gaining access to finance.15

Performance

The Net-Works programme generates value for Interface, provides a new source of nylon for Aquafil, and creates income for the participating communities. At the same time, it helps reduce the use of non-renewable resources and benefits the marine environment. The project hits a triple bottom line of being good for people, planet, and profit.

In turning these abandoned fishing nets into a valuable resource, Net-Works helps Interface reduce energy use in its supply chain. Aquafil’s nylon regeneration technology and use of fishing nets is more energy-efficient, waste-reducing, and better in relation to CO2 emissions than using virgin materials. By manufacturing yarn from recycled nylon, Interface’s supplier Aquafil generates substantial environmental and financial savings. In 2013, it reported that 12,600 tonnes of waste were eliminated, 70,000 barrels of oil saved, 42,000 tons of CO2 avoided and 865,000 GJoules of energy saved. More broadly, by buying Aquafil’s ECONYL yarn, Interface is using its market power to encourage the production of more sustainable materials and manufacturing processes that reduce energy use, waste, and CO2 emissions. Net-Works contributes to this effort to use more sustainable materials, while also seeking social benefits for fishing communities.

For Interface, the programme brings a number of distinct benefits. Carpets made of recycled nets help to capitalize on the growing demand for green and sustainable interior design in the commercial marketplace. Net-Works also helps to strengthen Interface’s relationships with its business customers by providing a platform for both Interface and its customers to share sustainability goals. In some cases, customers are potential future partners for Net-Works in the finance, manufacturing, or retail industries.

In addition, Net-Works has boosted sales and brand reputation. As an example, Interface has won praise for the initiative from the United States Department of State. Net-Works was also featured in The Economist and at the Sustainable Brands conference. In 2015, Interface was able to connect Net-Works directly to over $23.5 million of sales; this is based on an investment of less than $1 million. In a business-to-business market, Net-Works has been popular with customers. The company’s focus has distinguished Interface from competitors and has allowed buyers to align their purchase decision with their own sustainability goals and vision. According to a survey of Interface’s sales team, 83 per cent said that Net-Works had helped initiate or strengthen their relationships with customers. Jon Khoo commented:

Net-Works has been a great differentiator for us and has been very popular with our customers. There’s a growing realization that social and environmental sustainability are intertwined. As companies look to see where they can contribute to the UN Sustainable Development Goals, we have an example to share of a project that combines tackling poverty and empowering communities, with protecting the ocean and taking climate action.16

As Khoo’s remarks indicate, pursuing sustainability goals has proven successful for building the brand. Based on interviews with participants, Interface has found that Net-Works has inspired local communities to take genuine ownership of their environments. The programme has become a great source of community pride.

Since its establishment in 2012, Net-Works has reached forty communities in the Philippines and Cameroon. Over 208 tonnes of waste nets have been collected for recycling.17 Through the programme, 2,200 families have received access to finance through community banks and 64,000 people have benefited from a healthier environment.18

In addition to tackling the issue of ghost nets, Net-Works provides a platform for ZSL to engage directly with communities. ZSL helps communities implement sustainable fishing practices and protect mangrove and marine habitats. By 2020, Net-Works aims to have preserved 100,000 hectares of our oceans and coastlines through establishing marine protected areas. By nurturing the local natural environment, the communities benefit from a cleaner and healthier marine environment. The initiative also helps generate additional income via community-driven eco-tourism.

From a social perspective, Net-Works empowers local communities and creates a range of social benefits. It helps to establish and support local community banks, providing much-needed access to financial services in a convenient and local way. It brings communities together to manage and protect their marine resources. Finally, it provides opportunities for livelihood diversification. The programme enables fishermen to develop new enterprises, such as seaweed farming. This livelihood diversification will help reduce their reliance on fishing, thereby creating a more secure financial future.

Prognosis

Interface is committed to helping the Net-Works programme scale and to exploring the use of other forms of marine plastic in its products. With 640,000 tonnes of fishing gear dumped annually in the oceans, the company is unlikely to encounter challenges on the supply side.

Through the Net-Works initiative, Interface is able to supply its own supplier Aquafil with discarded fishing nets. Interface and ZSL have had to meet the same requirements as any commercial rival in their work with fishing communities. They work with the communities to collect, sort, clean, and prepare the nets. They also collaborate with local and international authorities on export and waste permits. United by a shared ambition to turn waste into opportunity, Interface, ZSL, and Aquafil created a system of mutual practices that helped further sustainability and business goals.

The project also challenged Interface and ZSL to explore new models as they began working with communities on the ground. They had to find ways to overcome practical and cultural challenges—both geographically and between the worlds of carpet and conservation. As Jon Khoo said:

In many ways, setting up Net-Works has felt like developing a start-up. Building an inclusive business model has been something new for both Interface and ZSL. Together we’ve had to explore and innovate on everything from the laws on waste management, to quality control of the nets, to logistics, to different models of community engagement. It’s been a real learning curve, but with a shared vision, a diverse skillset, and a strong network to reach out to, we’ve found answers to every problem we faced; and we will continue to do so.19

Looking towards the future, Interface and ZSL are seeking implementation and funding partners to expand Net-Works globally and launch in additional countries. The company views the Fair Trade model in the coffee sector, for example, as a potential model for rethinking supply chains and sourcing for industries that use nylons.

___

Notes

1. ‘Home’, Interface, Inc., https://www.interface.com/US/en-US/homepage.

2. ‘Mission Zero,’ Interface, Inc., https://www.interface.com/US/en-US/about/mission?_ga=2.91552409.225405492.1505403690-515724855.1505403690.

3. ‘Circular Economy Overview’, Ellen MacArthur Foundation, https://www.ellenmacarthurfoundation.org/circular-economy/overview/concept.

4. ‘Circular Economy Overview’, Ellen MacArthur Foundation, https://www.ellenmacarthurfoundation.org/circular-economy/overview/concept

5. Arratia (2014).

6. de Guzman (2017).

7. ‘Mission Zero’, Interface, Inc.

8. ‘Home’, Net-Works, http://net-works.com.

9. ‘Mission Zero’, Interface, Inc.

10. Jon Khoo, Innovation Partner, Interface. Personal communication with SBS team.

11. de Guzman (2017).

12. ‘A Filipino family consumed 8.9kg of ordinary rice in a week in 2006’, Philippine Statistics Authority, December 2010, https://psa.gov.ph/content/filipino-family-consumed-89-kg-ordinary-rice-week-2006-results-2006-familyincome-and.

13. ‘Blue Solutions from Africa: Regional Forum on Solutions for Oceans, Coasts, and Human Well-being in Africa,’ Blue Solutions, 14 January 2016, https://bluesolutions.info/images/Blue-Solutions-from-Africa-2016_en.pdf.

14. ‘Empowering Communities by Turning Waste into Opportunity,’ Net-Works, http://net-works.com/about-net-works/.

15. ‘Blue Solutions from Africa: Regional Forum on Solutions for Oceans, Coasts, and Human Well-being in Africa,’ Blue Solutions.

16. Jon Khoo, Innovation Partner, Interface. Personal communication with SBS team.

17. ‘Home’, Net-Works, http://net-works.com.

18. ‘Home’, Net-Works, http://net-works.com.

19. Jon Khoo, Innovation Partner, Interface. Personal communication with SBS team.

Case Study Contributors

• Jon Khoo, Interface Inc.

• Miriam Turner, Zoological Society London

• Justine Esta Ellis, University of Oxford

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