Interface CEO Jay Gould on optimism, talking to boards and truly carbon-negative products
Long-time consumer brands operations and marketing specialist Jay Gould readily admits he has not always been one to innovate through the lens of sustainability.
A "stern lecture" from activist Paul Hawken and immersion in biomimicry with biologist Janine Benyus contributed to the self-described skeptic’s change of heart. Today, as chief executive of Interface, Gould is a persistent, persuasive advocate for the flooring company’s bold mission announced several years ago, Climate Take Back.
There are four pillars to the Interface strategy: live zero in a way that "gives back whatever is taken from the Earth"; bring carbon back home where it can be turned into a resource; "let nature breathe" by creating an operational footprint that gives back to its surroundings (Interface is investing more than $100 million in overhauling its U.S. manufacturing facilities, and has bought into the "factory as a forest" movement); and leading an "industrial re-revolution" that prioritizes materials and products with a negative carbon footprint.
Like many corporate climate activists — although, sadly, too few with a chief executive title on their LinkedIn profile — Gould was in New York during Climate Week in late September, participating in meetings all over the city.
Among other things, he was on hand for an announcement by the Carbon Leadership Forum, which is teaming up with construction and development firm Skanska to create an open source version of the Embodied Carbon in Construction Calculator (EC3). The dashboard, originally developed by Skanska and Microsoft, helps companies track the amount of carbon emissions associated with the materials used during the construction phase of a building’s life. (Learn more about the calculator on this episode of GreenBiz 350.)
I recently spoke with Gould in the company’s New York showroom. Following is an excerpt from that conversation, edited for clarity and length.
Heather Clancy: What did you have to change in your manufacturing process to create the Interface carbon-negative carpet tile backing?
Jay Gould: Virtually everything. We had to find new supply chains, we had to invest in new manufacturing equipment and we have to invest in the education of our employees, especially our salespeople, on how to present it to the market.
Clancy: Is this the entire line?
Gould: No, not in the beginning. It differs slightly around the world what our mix will be. In the United States, by next summer, all of our products that we sell will have carbon-negative backing. But only a handful of products will be carbon-negative in totality, because the top of the carpet, which is made out of nylon, is not fully carbon-negative yet. So, we can only put a limited amount of nylon on the top, which is offset by the carbon-negativity of the backing.
So there is a science that we have. We think over time that we can increase the amount of nylon that we put into the product, and make even more plush products, because we are improving the value chain of the carbon footprint of nylon.
Clancy: Interface was part of the recent move to make a tool called the Embodied Carbon in Construction calculator, originally developed by Skaska and Microsoft, available as an open source resource for the construction industry. Why is this an important step forward?
Gould: We will see that the architectural community, generally, and the built product environment will have a lot more focus on what we call "embodied carbon." ... Ooperational carbon is the amount of energy or carbon produced during the running of the building (from heating, cooling, lighting, etc.), but embodied carbon is the carbon that’s created when a building is built or a significant remodel is done. (Note from Heather Clancy: Embodied carbon includes everything associated with extracting, manufacturing and transporting building materials to the job site and assembling them.)
If you look at the building forecasts over the next 40 years, we will be building a New York City every 30 days. That’s the amount of construction that is planned over the next four decades.
By the way, that carbon is today. So, if you think about it like money, the net present value of that carbon is much higher than the operational carbon, because that is the carbon that will be produced over the next 30 years.
We’ve also made a lot of advancements: zero carbon buildings don’t emit carbon. So, an increased focus on embodied carbon. When it comes to the calculator, the thing that I’m excited about is it’s third-party, verified data. As long as people are focused on carbon, there will be one source of truth for what a company’s or a product’s carbon footprint might be.
Clancy: So, how will Interface benefit?
Gould: Today, if you look in North American, we already have the lowest carbon footprint products. Our products, on average, have 5 kilograms per square meter carbon produced, and we purchase offsets to make up for that so we can sell carbon-negative products. But we think offsets are cheating. We believe in a world where companies don’t purchase offsets, we naturally offset. So, this carbon-negative product that we are going to launch next year naturally offsets the carbon. So we will actually move 5 kilograms down to zero or negative.
Clancy: You mentioned having to change the mindset of your sales force as part of this. When you do a product like this, you really do have to focus on that education of employees. What education did they provide to building and construction developers to help them understand the implications of what they are doing?
Gould: The good news is that large multinational companies, like Microsoft and Dell and Salesforce, already have an appreciation for this. They have their own sustainability goals. Architects from around the world have gotten onto this bandwagon. … There are literally thousands of architectural firms signing up to these commitments around the world.
We said in 2016 that we wanted to create a movement around carbon transparency and climate optimism that we can actually make a difference in this, and what I have seen over the past four years is really a dramatic growth in the conversation, and frankly, the increasing positivity that we can make a difference.
Clancy: How do you stay optimistic?
Gould: I think it’s just amazing: when you release human ingenuity to solve a problem, it’s amazing what can happen. Look what we did. In three years, we went from a moonshot to a reality. If we can do it, anyone can do it. If anyone can do it, everyone should do it. I think we’re just getting started. I think the pressure that companies, that CEOs, that boards, will start to feel [will] change how they act. I think that corporate governance reform, which is part of our four-pillared strategy on how to attack climate change, is required for companies, particularly in the western world. Unfortunately, most boards of directors are, by governance requirements, only there to protect one stakeholder, which are the shareowners. I was really happy to see the Business Roundtable publish that CEO statement on corporate purpose.
Clancy: There’s a lot of noise around getting faster, doing this faster, being more ambitious. Do you feel like Interface is moving quickly enough? How do you talk to other CEOs about the need for that?
Gould: I don’t think there’s been a company as aggressive as Interface about announcing our intentions. I’ve publicly stated that we want to be carbon-negative, with no offsets, by 2040. The challenge isn’t what’s within our four walls, it’s what happens before we get our raw materials. So, we have to offset over the next 40 years roughly 750,000 metric tons of carbon: two-thirds or more of which come from our value chain. It’s a daunting task. I think we’ve been super aggressive. Would I like to move faster? Absolutely, but I think the flywheel is starting to move faster now.
Clancy: You mentioned the Business Roundtable letter a moment ago. Do you think it was bold enough? What do you tell other CEOs on how to make this part of your psyche? Do you feel like you’re still doing lot of convincing?
Gould: In 2001, the founder of Interface, Ray Anderson, taught me how to transform business to be purpose-driven. What he said — these are my words translating his — is that you have to earn the right to your sense of purpose. But your purpose shouldn’t be a sideline, it should be core to how you think of value creation. At Interface, our purpose — around leading industry to love the world — is central to how we run our business. So our sustainability mission about Climate Take Back has got us very focused on carbon, and I think it will take us the next 30 or 40 years to accomplish what we want to accomplish in that.
I think many people make a false tradeoff between purpose and profits. We view them as being symbiotic, really working together. Our customers care about what we do, and our employees care about what we do. Ultimately, I’m sure our shareowners will care about what we do. I’m not sure all of them care right now.
Clancy: Are the Sustainable Development Goals a guiding North Star for you?
Gould: The challenge with the SDGs, and I think they’re great, but they are a little overwhelming. As a small company, we just like to focus. So we are focused on just a few SDGs. I think it’s great that it’s as holistic as it is, but we can’t tackle all of that. If we can make a difference in a place where we have what I call standing, we have demonstrable evidence that we’ve made a difference and that we can make a greater difference, that’s where we want to play.
Clancy: What constitutes demonstrable evidence?
Gould: Around sustainability, we have been doing this for 25 years. We have demonstrated that we can run our business in a negative way, albeit because of offsets right now, but we’ve made progress. Today, 89 percent of the energy that we use from around the world is from recycled or bio-based sources. At the Paris climate change talks, people were talking about in 2050, we’ll get to 50 percent renewable energy. I don’t think people are setting their aspirations high enough. (From Heather Clancy: Interface does not yet run its business in a negative way, but it's a goal that it continues to make progress on.)
Editor's note: This story was Oct. 8 to clarify operational versus embodied carbon, the "live zero" component of Interface's strategy and progress toward its ultimate goals.