The Elephant in the Room Has a Big Carbon Footprint

Interface CEO Ray Anderson attended the CleanTech Investor Summit last week in Palm Springs, California. That's a good sign for innovative young companies like Climate Earth -- his presence is a signal that investors must participate in creating markets for green products. 

Anderson is a legend for rethinking business as usual. He made flooring manufacturer Interface an industry leader by investing in green technologies and using sustainability as a key performance indicator.

His vision continues to drive profitability and market leadership for the company. At the GreenBuild conference and trade show in November, Interface's booth featured an enormous pachyderm hanging from the ceiling above pillars of fossil fuel -- the proverbial elephant in the room. It wasn't just clever marketing.

According to an Interface representative at the show, the company has extracted so much fossil fuel from its supply chain that it was buffered from fluctuations in oil prices last year.

While competitors had to raise prices, Interface proudly told customers about their efficiency and had no cost increases to pass along. Talk about a competitive advantage.

The Associated Press reported Tuesday that oil prices rose to a 15-month high in January as a result of cold and snowy conditions. Now, prices are being impacted as much by China's bank lending practices as domestic supply and demand.

Weather and foreign economic policies are only two of an infinite number of factors that affect oil availability and price. This unpredictability presents a threat to profits, especially for companies dependent upon low-margin products and carbon-intensive materials.

CEOs looking for new ways to cut costs should focus on reducing their company's supply chain dependence on oil. The first step is to understand their current fossil fuel exposure.