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Two Steps Forward

Interface @ 50: A conversation with CEO Laurel Hurd

At the half-century mark, the sustainability icon doesn’t seem to be resting on its, um, laurels.

Interface CEO Laurel Hurd against a backdrop of the company's carpet tiles

Interface CEO Laurel Hurd against a backdrop of the company's carpet tiles. GreenBiz Group photocollage

This week marks the 50th anniversary of the birth of Interface, the storied Atlanta-based flooring company and a pioneer in what it takes to transition a manufacturing company to become a sustainable, even restorative, business. That anniversary in itself is noteworthy: The average lifespan of companies listed in the S&P 500 is well under 20 years, according to Innosight, down from 30 to 35 years in the 1970s and around 60 years in the 1950s.

That longevity is also noteworthy because of the company’s sustainability journey, launched nearly 30 years ago by its iconoclastic founder and chairman, Ray Anderson. Not many companies can trace their sustainability commitments that far back, let alone still be seen as a leader.

This week’s milestone led me to check in with Laurel M. Hurd, Interface’s CEO, who, at age 52, is only slightly older than the company she leads. She joined Interface a year ago after more than two decades at the consumer goods company Newell Brands, purveyor of dozens of well-known brands, including Elmer’s, Rubbermaid, Coleman and Sharpie.

The story of Anderson and Interface is well-known to most sustainability veterans. For those newer to the field, the gist is this: In 1973, Anderson, just shy of his 40th birthday and after nearly a decade and a half in the carpet business, founded Interface to produce the first free-lay carpet tiles in America. His timing was exquisite: Computers were just entering the workplace, with all the cabling and ventilation systems they demanded. Modular carpet tiles enabled companies to more easily reconfigure office flooring to accommodate all that underfoot infrastructure. Interface took off.

What we're trying to do is truly be restorative. That's a massive, massive ambition for a global manufacturing company.

About 20 years later, Anderson experienced what he later described as a "spear in the chest" moment: After reading Paul Hawken’s book, "The Ecology of Commerce," and after fielding repeated customer and employee queries about Interface’s environmental programs, Anderson came to realize that his was an unsustainable company, based largely on his carpeting’s two principal ingredients: petroleum-based nylon, used for the carpet fibers, and polyvinyl chloride, another petroleum derivative, for its backing. He famously declared himself a "sinner" and "plunderer of the earth" and his company "a thief from future generations." ("In the future, people like me will go to jail," he once declared.)

Staying the course

That epiphany launched Anderson and Interface on a journey to become the world’s most sustainable company. Long before anyone had uttered the words "circular economy," Anderson had a vision to take used carpeting and turn it back into new carpeting. In 1994, at age 60, this Southern industrialist became the poster child for CEOs who "got" sustainability and were actively integrating it into company operations and product strategy. In 1997, Interface launched Mission Zero, which included a pledge to end the use and production of virgin materials. Anderson gave scores of speeches a year touting his vision.

When Anderson died in 2011 at age 77, many of us wondered whether and how his vision would endure. Would Interface stay the course or revert, as so many companies do under leadership changes, to a different or more conventional strategy?

More than a decade — and several CEOs — later, the company has stayed the course, and even upped the ante. In November, for example, Interface announced it had become a Carbon Neutral Enterprise, meeting the PAS 2060 benchmark created by the British Standards Institution. In its announcement, Interface said it had "transformed its factories, products and supply chain — including using innovative new carbon-storing raw materials — to dramatically reduce its carbon emissions." It allowed that "verified emissions credits are necessary to balance emissions that Interface has not yet been able to reduce. Ultimately, the company intends to balance its carbon impact without them."

By 2040, the company aims to be carbon negative.

In considering whether to take the helm at Interface — today, a $1.3 billion (fiscal year 2022 revenue) enterprise with manufacturing plants on four continents — Laurel Hurd saw a company with a strong legacy, a bold vision and a great deal of untapped potential.

"What we're trying to do is truly be restorative," she told me. "That's a massive, massive ambition for a global manufacturing company."

The company is on its way. According to the company’s 2021 ESG report, its most recent, between 1996 and 2021, Interface reduced greenhouse gas emissions by 96 percent per unit of output, cut water use by 86 percent and sent 85 percent less waste to landfill. Just over three-fourths of the energy used at its global manufacturing sites came from renewables. Fifty percent of its raw material feedstocks are bio-based or recycled.

Life after Ray

But beyond those data points, I was curious how Hurd viewed the path forward: Has the proverbial low-hanging fruit been mostly harvested? What are the opportunities ahead? And how much is Anderson’s vision still a part of the company and its culture, even a dozen years after his passing?

When Hurd arrived at Interface last year, she was quick to discover that the company’s sustainability commitments were key to its innovation pipeline and supply-chain relationships. "I didn't know what I'd find when I came here," she said. "And it's so integrated in the fabric of everything that we do. Sitting through a meeting where we're talking about our science-based targets — where are we today by product category, by plant location, by supplier, and what are our plans to get to where we need to? That only works if our innovation roadmap, our supplier partnerships and our product development are all aligned to get there. It's holistic, and it's true to the core of the company."

The beauty of Ray was that he was about how we needed to win in the market.

One of the relatively few negative critiques of Anderson, who was generally held in high regard by both his business peers and environmentalists, was that his seemingly singular focus on sustainability was at times a distraction for the company, particularly during market downturns, of which there were several during Anderson’s tenure. The company’s stock price tanked during those dips, notably in 2003 and 2009, as recessionary forces led Interface’s customers to trim their real estate expenditures. Even today, amid the post-pandemic realignment of office space, Interface’s stock (Nasdaq: TILE) is near its 10-year low. (The website Seeking Alpha recently dubbed it "extremely cheap at current prices.")

Anderson, of course, disagreed adamantly with the notion that sustainability was a distraction from the pursuit of profits and productivity, arguing that Interface’s sustainability efforts actually saved the company during tough times. "We wouldn’t be here if we hadn’t taken this direction," he told me in 2004.

I asked Hurd, who never met Anderson, how this aligned with her own experience at the company.

"The beauty of Ray was that he was about how we needed to win in the market, and how we needed to push forward in a whole new way from a sustainability perspective," she said. "And those two things go arm and arm."

It matters more than ever today, she added. "The beauty right now is that we have an advantage because carbon has never mattered more to our customers. Ray was talking about it before anyone else. So, the business impact of what he was doing was maybe less relevant to the audience, where now, my gosh, we're partnering with like-minded customers and supply partners, and everyone wants to learn from us. But they also want to support our products and our brand because we are so far ahead. So, in that way, it's almost easier for us now than it was for Ray, because it's such a core part of our business. And it's part of how we win in the market."

And Anderson still looms large, she said. "He's the hero that continues to live on in the company every day. And I feel a personal responsibility to do him proud. I mean, he was such a pioneer and put his company on the line in a time when nobody was doing it. If you were in our building here, you'd see videos of him, you'd see images of him; he's everywhere here. He is the lifeblood, and it's our job to continue to do him proud."

I asked Hurd what Anderson might think were he to visit Interface today. "I think he'd be damn proud," she responded. "But I think he would say ‘Guys, you're just getting started.’ He'd be incredibly proud of the company that he built and yet wouldn't be at all satisfied."

Thanks for reading. You can find my past articles here. Also, I invite you to follow me on Twitter and LinkedIn, subscribe to my Monday morning newsletter, GreenBuzz, from which this was reprinted, and listen to GreenBiz 350, my weekly podcast, co-hosted with Heather Clancy.

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