Text from Keynote Address given by Ray Anderson, CEO of Interface Inc. and Co-Chair of the President's Council on Sustainable Development

Well, I bring greetings from Atlanta with this funny accent, but they promised me a friendly audience. I would like to put that to the test right up front. Everybody stand. Now pick out a couple of people standing nearby and give them a hug. Everybody get two hugs? Six is the limit. Thank you. There is a symbolism in that hug that is especially apropros at a meeting like this. A day such as you’re about to experience, fellow astronauts on spaceship earth. Our spaceship is in trouble, and it needs us, we’re in it together. And that’s the symbolism of the hug. That’s also the first keynote of this conference, "we’re in this together."

My assignment today is to keynote the challenge that you face in this conference: to set new directions, to figure out what’s next, what the next focus ought to be.   Who has roles to play?  How do you take California to the next level in waste management?  Ralph has already told you about the progress that you’ve made, I believe you lead the nation in this already, and you’ve already proven the value of the first keynote—teamwork—working together—cooperation, and they’re evident and I congratulate you for that. But just in case you’re in danger of becoming complacent and self satisfied, I’m going to restate my assignment this morning as to disturb, to disturb not praise, to inform and sensitize where perhaps they’re not needed, but then again maybe they are here and there. All of this is to challenge you to think big—you’ve got a daunting task, I challenge you to make it even more daunting.

I want to pose three big, overriding questions today and try to lead us to some answers, not all of the answers, but some answers. The first question is this, what is the condition of spaceship earth fellow astronauts? Business people in the audience, business people want to get to the bottom line, here’s the bottom line.

Every life support system of earth,
every system that makes up this biosphere
where we and all the other creatures live
that spherical shell that’s eight thousand miles in diameter,
the diameter of the earth,
and only about ten miles thick,
extending from sea level about five miles into the depths of the ocean,
about five miles into the troposphere,
that spherical shell that nurtures and contains all of life
on a basketball size earth,
tissue paper thin,
every life support system that comprises that biosphere
is stressed and in decline.

Rivers polluted,
oceans polluted and over-fished,
lakes dead from acid rain and industrial pollution,
forests too,
dead and dying,
from acid rain, from atmospheric ozone,
originating in our cities,
drifting into our rural areas,
affecting crop yields adversely too.

We don’t think too much about that in this land of abundance, but it’s of special importance to China. The deleterious effect of industrial pollution on crop yields in China, just the extent of that will determine the balance, whether China can feed itself, a China that cannot feed itself is the whole world’s problem, yours, mine, our children’s, our grandchildren’s and theirs and theirs.

Wetlands, the disappearing, the beginning of the food chain, it leads to us at the other end. Rain forests devastated, a critical lobe of earth’s lung, old growth forest almost gone, mostly clear cut, destroying habitat for countless species, species not even yet identified, are gone before we know it.

Depleted, polluted aquifers, all over the world, our aquifers are being drawn down. Farmlands, denuded of topsoil, increasing in salinity from irrigation, toxified by pesticides. Our rangelands pushed to the very limit of their carrying capacity to feed the livestock that feed us. Our very air, polluted by countless toxins, carbon dioxide, other green house gases building up inexorably, inexorably, inexorably, to lead to global climate change.

The scientific debate about climate change, global warming, is over. Scientific debate is over. The debate is now political. It is real--when two thousand six hundred scientists, all around the world, atmospheric scientists, agree, and only a handful hold out in skeptical disagreement. The Kyoto Treaty, when it is ratified, will make only a tiny dent in the total problem; it’s only a beginning. Many scientists are already advising adopt a strategy of adaptation. It is too late to prevent global climate change, so adapt. Adapt to drastic changes in our climate in the twenty-first century, and work now to mitigate the twenty-second century. It’s the long term, slow reaction problem. And even the stratosphere itself [is stressed], where ozone protects us from deadly ultraviolet radiation. All of these are stressed, --severely stressed. By what? By man-made degradation.

I know that there are exceptions. If you live in Pittsburgh you can now see across the street, you used to not be able to fifty years ago. The Kahoga River in Cleveland no longer catches fire, there are fish in the Thames at Tower Bridge, and the United States toxic emissions are down over the last twenty-five years, but the general pattern worldwide is frightening, and there is only one global biosphere. One result of all this, is that species are disappearing into extinction at a rate unknown on earth since the mass extinction of the dinosaur, sixty-five million years ago. And in no way can this be good news for our species, because we are fouling our own nest too. We cannot live without those life support systems anymore than the other species can. And as if that were not enough, you can add to the list a nuclear cleanup that is off the scale, both in terms of cost and horror. And to that, add one billion of earth’s people, unemployed, looking for a job, and cannot find work. Add to that another billion living in starvation conditions. Add to that another billion hanging on by their fingernails. Half of earth’s people, human beings, in trouble, serious trouble. Social equity (attention to human capital), like the environment (attention to natural capital), is in serious trouble, as we focus myopically on financial capital. We cannot escape the consequences of that misplaced focus. We witness the ravages of AIDS, and we wonder, my God, what’s next? Notice that I have not mentioned solid waste or choking landfills, the focus of your efforts thus far. There is much to do, the agenda is very, very large.

Furthermore, especially for companies like mine and perhaps yours, if you are a business person in this audience, finite, exhaustible, non-renewable resources, natural gas, coal, oil, earth, stored natural capital, capital, mind you, being gobbled up at an obscene rate. Most of it burned, burned for energy, and in the process converted to carbon dioxide, to exacerbate the greenhouse effect and the beat goes on. It’s a crisis. It is the crisis of our times and perhaps of all foreseeable time to come. It is a funeral march to the grave if we don’t do something to reverse that deadly decline.

We should put ourselves in perspective and one way to think about that is to think of the whole history of the earth. Let’s represent it as a timeline. A timeline one mile long, it would go around this room fifteen or twenty times. The first quarter of a mile of that timeline there was no life, and then life sprang spontaneously into existence in that first cell somewhere in the primordial oceans; and lifted itself by its very bootstraps in a very, very hostile environment--a non-existent biosphere, but for that first cell. And as it proliferated, eventually mind-bending complexity and diversity, emerged each species preparing the way for the next, and the next, and the next. Cleaning up that hostile environment, creating an evolving biosphere that would allow the next species and the next, and then the next. And eventually we evolved, in a biosphere that all our predecessors had made clean and sweet, enough for us.

Our species occupies in that mile long timeline the last three-quarters of an inch, that’s how much went on before we came. If you look at the last three-quarters of an inch, you find something in the last three one-thousandths of an inch--the modern industrial age. Industrialism, occupying the last three one-thousandths of an inch of a mile long timeline, the thickness of a human hair and a mile long timeline. Scientists have looked at the last hundred yards of our mile long timeline and found three great mass extinctions. Two hundred sixty million years ago something happened, they can not tell us what, but that toxicity that had been relegated to the lithosphere came back into the biosphere with some cataclysm and ninety five percent of all life disappeared, vanished. Then life picked itself up again; and sixty five million years ago, a comet most likely, a comet struck the earth in the region of the Yucatan Peninsula. Again that toxicity spewed into the biosphere and circled the globe, and seventy percent of life disappeared. And then life picked itself back up again. And scientists now tell us the third great mass extinction, in the recent history of the earth, is underway as we speak.

Seven out of ten biologists in the American Biological Association polled recently, agree a mass extinction is underway. Those other two were caused by unavoidable natural disasters, this third one, this present one, is the quite deliberate act of the highest form of intelligence yet to evolve and the fruit of that intelligence, the modern industrial age. Once one understands this crisis, no thinking person can stand idly by and do nothing. When you get past denial, and denial is alluring and it is seductive, but when you get beyond denial, you must do whatever you can.

I’ve recently published a book. Its title is Midcourse Correction. The title comes from hearing a NASA scientist speak years ago about that first man to the moon, Apollo 11 mission. He told our audience that ninety percent of the way from earth to moon, the spacecraft was off course. It was those tiny midcourse corrections along the way that assured the successful outcome. Our spacecraft is off course, earth needs a midcourse correction.

And that brings me to the second great question today, "What can be done and who will lead the process"? In such a crisis, would you not look to your strongest institution on earth to take the lead, but who is that? Government, the church, education, all of those have roles to play. But I got my wake-up call, and I found the disturbing answer to this question in August of 1994. My midcourse correction, my personal midcourse correction came from reading Paul Hawkens’ book, The Ecology of Commerce. It was a spear in the chest for me. It was an epiphanal experience, and I agreed completely with Hawken’s central thesis, that business and industry, the largest, most pervasive, wealthiest, most powerful institution on earth and the one doing the most damage, my institution, must take the lead in directing earth away from man-made collapse, to turn us away from the abyss, to stop the mass extinction that unchecked will eventually claim our species, too. If business and industry is not aboard, your effort is doomed. Looking for leadership, I felt I had no alternative but to look in the mirror, and then I asked my people to lead, to lead what you might ask. To lead in pioneering the next industrial revolution, how about that? The next industrial revolution, why? My message to you today is that the first one is not working. It is unsustainable. It is a mistake. It just happened, there was no plan, and it came out wrong. I’ve benefited as much as anybody from it, but I believe we must have another industrial revolution, and a better one, and we must get it right this time. Does that sound too radical, just too provocative, too outrageous? Let me try a different tact.

Dana Meadows is one of the smartest people I know. Dana Meadows is an expert systems analyst, an author, a syndicated columnist, a college professor and a farmer. Dana has published this elegant paper entitled, "Places to Intervene in a System." In David Letterman fashion she has listed those in increasing order of effectiveness, 9, 8, 7, and so forth, down to number 1, the most effective place to intervene. Number 9 on the list, the least effective place that even makes the list, is to adjust the numbers, the quantities, more of this, less of that, more resources, fewer subsidies, less taxes, more of this and more of that. If you work your way up the list of effectiveness, you find things like regulate the negative feedback loops of the system, and a little further on drive the positive feedback loops of the system. Then near the top of the list is change the goals of the system. But number 1 on the list, the most effective place to intervene in a system, is to challenge the mindset behind the system in the first place. The paradigm, the perception of reality, the mental model of how things are that underlie the system.

Dana says that this is the most effective place to intervene, but she acknowledges that it’s also the hardest. While thinking about that paper, I realize the obvious, that we have systems all around us. We have our transportation systems; we have our communication systems, our computer systems, are you ready for "Y2K"? We have our regulatory systems, our production planning systems, our system of government. We have in our businesses, our accounting systems, our production planning systems, and so forth. We have our banking system, we have our systems for managing our households, we have our educational systems. Systems all around us, and among those is the industrial system that has arisen out of the industrial revolution.

I ask myself, what’s the mindset behind the modern industrial system? What’s the perception of reality? What’s the paradigm that underlies the modern industrial system? If you look at how it operates, you know it originated in another day and age, and it still views or acts as if it views reality as it did then. Here are a few examples; one, the earth is so large, it’s an inexhaustible source of materials, natural resources, we’ll never run out, there will always be substitutes available. The earth is so large it’s limitless as a sink, able to assimilate our waste, no matter how poisonous, no matter how much. Relevant timeframes, well the maximum is the life of a human being, more likely the working life of a human being, it’s hard to think beyond retirement, and sometimes especially in business, just the next quarter. Earth was made for man, by God, for man to rule, conquer. Homosapien, sapiens, self-made wise man doesn’t really need the other species except for food and fiber and fuel, and maybe shade on a hot summer day.

Technology is omnipotent, especially when coupled with human intelligence. Well, what do you mean by human intelligence? Why, left brain intelligence: practical, objective, realistic, pragmatic, numbers-driven, results-oriented, unemotional. These will suffice, thank you very much.

And how about this one for the mindset behind the system? Adam Smith’s invisible hand of the market is an honest broker. Or this one, labor productivity is the only route to abundance for all. Or this one, happiness is to be found in that abundance that is in the affluence and the material wealth that comes from it.

Paul Hawken’s book, many others that I have read since then, together with my own late blooming comments, have convinced me that every element of that paradigm is wrong—dead wrong, and that the very survival of our species depends on a whole new industrial system developing, and developing quickly, based on a new paradigm, a new and more accurate view of reality. A view of reality that acknowledges for example, juxtaposed against each of those earlier elements, a new set of elements.

The earth is finite--you can see it from space--that’s all there is of it. It’s finite, both as a source (what it can provide) and as a sink (what it can endure). You’ve tackled the mindset behind this particular element. What about the others? There will come an end to the substitutes that are possible. You can not substitute water for food. You can not substitute air for water, or food for warmth, or energy for air, or air for food. Some things are complimentary.

Relevant timeframes, relevant timeframes that geologic can scale, think about that mile long timeline and our brief insignificant piece of it, doing so much damage so quickly, we must at least think beyond ourselves and our brief puny time on earth, so brief, and think of our species, not just ourselves, across geologic time and man was made for earth, not the other way around.

The diversity of nature is crucially important to keep the whole web of life, including us going sustainably, over geologic time. Technology, technology must fundamentally change, I believe if it is to become part of the solution instead of continuing to be the major part of the problem. By and large it operates off extracted natural capitol. It practices linear, take make waste processes that are driven by fossil fuel generated energy again, extracting from the earth that stored, precious stored natural capitol.

The technologies of the first industrial revolution abused the biosphere and its inhabitants and those technologies must be replaced with renewable technologies that are cyclical not linear, that are solar and hydrogen driven for energy that are benign and in their effect on the biosphere, and where waste is eliminated as a concept, abolished as a concept, emulating nature where there is no waste. In nature one organisms waste is another’s food, that must be the model for the new industrial system.

Human intelligence, what about the right side of the brain? The caring, the nurturing, artistic, subjective, sensitive, emotional side, in business the soft side of business. I believe it’s at least as important as the left side, perhaps a good bit more important since it represents the very human spirit and the market. The market is at least opportunistic if not outright dishonest in its willingness to externalize any cost of an unwary, uncaring public will allow it to externalize, it must constantly be redressed to keep it honest. Does the price of a pack of cigarettes reflect its cost? Not close. Does the price of a barrel of oil reflect its cost? Not close. Who’s paying for the military power projected into the Middle East to protect the oil at its source? Why, you are, through your taxes, thank you very much, not in the price of a barrel of oil. Who’s paying for the cleanup and the repair after hurricanes and tornadoes and mudslides, and typhoons and gales, you are, through your insurance premiums, again thank you very much. It’s not in the price of a barrel of oil. And who will pay the price of global warming when nine thousand square miles of the United States of America disappearing under rising sea levels in just the next century? We would fight World War III before we would allow some foreign invader to take nine thousand miles of America, but global warming will surely take that and more in the centuries that follow.

In resource productivity, not just labor productivity, all resources, all resources, productivity of resources is the route to abundance for all. We must find a way to put a billion people to work. Something we have in abundance, conserving scarce and diminishing natural resources and that must happen in the next industrial revolution.

And finally happiness. Surely happiness lies somewhere other than in material wealth, in spiritual contentment perhaps, in finding a higher purpose for our lives, perhaps. So there’s a problem. There’s an immediate proximate problem. The life support systems of earth are in decline, species are disappearing at a rate unknown on earth in the last sixty five million years. A thousand to ten thousand times faster than the average rate of species extinction over that time. Paul Hawken called it, "the death of birth." The death of birth--that was the phrase that put the point of the spear in my chest. And we too are threatened, ultimately in extremist, the unbelievable is true.

There’s a problem behind the problem. An industrial system that’s based on a totally flawed view of reality. The ultimate problem therefore is the mindset behind the system, the old flawed view of reality, and six billion minds must change. The real crisis of our times therefore is in our heads, the mindset behind the system. Our friend David Crockett, who is the City Councilman in Chattanooga, Tennessee, calls for lobal change. An industrial system based on a flawed view of reality will crash given enough time. I think time is running out on industrialism, but where do you start? I believe you start in your own corner. Admittedly, your corner is much larger than my corner. But beginning on a day in August, 1994, I and then my company made a mid-course correction. When I read Hawkens’ book, and challenged my people to step up and lead and gave them a vision, Interface, our company, the first name in industrial ecology worldwide, through substance, not words, and since that day we’ve been intervening in the system. We’ve been climbing this mountain, climbing a mountain that’s taller than Everest. A mountain called sustainability, and we know that we’re just on its lowest slopes, but we believe we’ve found the direction of up. And you too, you too have intervened in this system and are climbing. For us, what followed financially is not a disconnected fact. This chart is for the business people in the audience. That’s the financial history of my company, beginning from scratch in 1975 with our first recordable sales, the bar chart shows sales of 1.3 billion in 1998. That’s the earnings before interest, taxes, depreciation, amortization, that’s the way bankers think about earnings. Out of that we pay interest and then taxes and so forth.

August, 1994 is found in the fifth bar from the right.

Now what does this mountain climb mean for our company? How do you communicate an ideal like this to seven thousand-five hundred people, or for that matter, to an audience like yourselves? Well, some three years ago or so, I was watching this movie, Mind Walk, based on Fritjof Capra's book, Turning Point. It was my first exposure to the notion of the inter-connectedness of all things. Capra was thinking at this sub-atomic particle level. It set me thinking at quite another level about how Interface, our company, is connected to its many constituencies. Some of those connections are good and should be strengthened, others frankly, are bad and should be eliminated, and still others should be added because they should be there and they’re not. And that lead to the series of schematics that I want to take you through, to help you understand how we are approaching this incredibly difficult climb toward sustainability and I urge you to look at this and think analogously of your own business, of your own organization, whatever your endeavor maybe, whatever brings you here, whatever constituency you represent--think analogously and see if you can find yourself, your organization in this.

Here’s the Interface corporate logo--the circle represents the whole world-- the "I" represents Interface within that global context as well as our focus on commercial interiors, we make carpets, and textiles, and architectural products for commercial interiors like this one, or like your office, or your hospital or school, places where people work, not where people live, but where people work. Internally, we talked a lot about what belongs inside that circle "I", what constitutes Interface. A typical version of what goes inside of this would apply to any company is its people, its capital and its processes. An economist might put technology where I’ve put processes, but I’ve used process because I think it’s the bigger word. At the core, at the very center of the company’s values, the combinations uniquely different for every company, but the general picture is the same for all, this would represent every enterprise, every commercial enterprise on earth.

But of course, no company stands alone like this; any company’s connected to some important constituencies. In our case, Interface is part of a supply chain. There are suppliers there, there are customers there, and products flow through the supply chain in one direction, and money flows in the other direction. But of course the supply chain doesn’t stand alone either. It’s connected to some important constituencies. Our suppliers, for example, there on the left, are dependent on the earth’s lithosphere for organic and inorganic materials, shown there at the bottom left. At the top is the biosphere. Some of our raw material is natural and it comes from the biosphere, not very much. Our processes are connected to that biosphere by some very unfortunate linkages, the waste streams we produce, the emissions we produce, and the products that we make end up at the end of their useful lives very often, going to a landfill, or perhaps worse, an incinerator, in either case, creating a further pollution load for earth’s biosphere.

We’re connected to our community too. Our people come from there. Their wages return to the community, often the lifeblood, our capital comes from the sector of the community, the financial sector. If we are fortunate enough to earn sufficient profits, we return dividends to those investors, and we pay interest on our debt, and we hope to show capital appreciation for our investors. Government is part of that community too, and we are connected to it through the laws and regulations that it imposes, and of course by the taxes that we pay. With these linkages in place, we have the typical company of the twentieth century. I’m pretty sure you can find your company, even your organization there, if you think analogously, and there are good linkages, and there are bad linkages, and there are missing linkages that should be added. This is the typical company of the twentieth century. But if this is all there is of Interface, then Interface too is just typical, but we’re trying to transform our company into something different. I have called that the prototypical company of the twenty-first century.

And that brings me to the third big question, how do we, all of us, get there to sustainability? I offer our plan in partial answer, not anywhere near the whole answer for sure, but we share our plan with you for whatever value it may be. We are pursuing this goal, this prototypical company of the twenty-first century on seven fronts. Seven fronts simultaneously and we’re at different stages of progress at each one. You might say that we’re climbing the seven faces of that mountain, that’s taller than Everest, the one called sustainability. We hope that the seven clients will meet at the top and that defines for us sustainability. Hundreds of projects all throughout our company, our research corporation is driving this, every business is engaged right down on the factory floor. I don’t have time to go into a lot of detail, detail is found in the book. The seven fronts, the first of those is to not to reduce waste but eliminate waste, to abolish the very concept of waste. We’ve called waste, we’ve identified waste, defined waste as any cost that goes into our product that doesn’t produce value for our customers. That includes the standard notion of scrap or off quality. It also includes anything we don’t do right the first time, the misdirected shipment, the mispriced invoice, the bad debt. When we looked at our company against perfection, zero waste, zero off quality, do it right the first time, every time, we were amazed to find ten percent of sales was waste. We were a seven hundred million-dollar company at that time, seventy million dollars of waste.

The ratio now stands at .45, 45% reduction, an index of 55 means a 45% reduction. We indexed the whole company against that starting baseline, l.0, and we are at 45%. The financial effect of that, staggering. Seventy seven million dollars, cumulative savings and that has paid for all the rest of this revolution that we’re engineering in our company. Waste reduction, waste elimination is a gold mine to be mined and it pays for all of the rest. We’ve reinvested fifty five million of that in research and development, focused on the future, focused on sustainability and the future.

The second front is the front of benign emissions to eliminate molecular garbage, if you will. We’ve inventoried every stack, every outlet pipe, we know what’s going out, how much of it there is. Counting recent acquisitions we began this effort with two hundred twenty-nine outlet pipes and stacks. So far we’ve shut down forty-eight of them. I hope to live to see the last stack, that last outlet pipe capped, closed off. How do you do that? You do that by creating cyclical processes that don’t need outlet stacks. We know that to really prevent the bad stuff from going out of our factory, we must prevent it from coming in, in the first place. We must go upstream, always upstream, working with our suppliers, to leave that stuff in the lithosphere where nature put it over those 3.85 billion years that she’s been at it. We don’t need to bring that poison back into our biosphere, and I tell you that every factory on earth is doing it. Our factories are replete with materials that never should be taken from the lithosphere, they should be left where nature put them.

Our friend, Bill McDonis says end of pipe solutions are unsustainable. You can put the filter up there and it can concentrate the pollution and keep it from escaping for the moment, but the first law of thermal dynamics tells us it won’t seize to exist. The second law of thermal dynamics tell us it will disperse, given enough time. Bill says, hey guys, we’ve got to take the filters off the ends of the pipes and put them in our brains and apply our brains upstream and learn to leave that stuff where nature put it.

Safe materials, de-materializing the very business itself, we’ve redesigned products for lower face weight carpets that actually perform better. In one factory, the embodied energy of the nylon not consumed because face weights have been reduced, the embodied energy not used to create nylon not used, is sufficient energy to drive the whole factory—times two.

The third front is renewable energy. That means to us—solar, it must in time be solar, in the short run perhaps gas turbines, perhaps hydrogen fuel cells, but in time we believe we must learn to harness current solar income and sever that relationship, that linkage to the earth’s crust, represented by petroleum, organic materials from earth’s crust. We must harness another form of energy renewable. We declared fossil fuel generated energy to be waste under our waste reduction program. Even that irreducible amount needed to drive the processes as waste if it comes from fossil fuel. We are about to commission our largest photo voltaic unit yet, right here in the City of Industry at our Bentley factory, a 127 kV unit will hit the button in February and we will be producing the world’s first solar made carpet.

I ask audiences with interior designers and architects all around the country, would you specify solar made carpet, every hand goes up. You see, it’s the marketing decision, the accountants can never get there on the investments in photo voltaics today. But the market place is telling us they’ll buy it, who cares if the electricity costs a little bit more. So we put on our marketing hat and it becomes an easy decision to invest in solar made carpet.

The next front is closing the loop on recycling. Some new linkages have come into place here, a technical cycle introduced that’s taking those precious molecules, those precious man-made organic molecules at the end of their useful life and bringing them back for life after life through the sustainability loop, the sustainability link. There’s a natural cycle there at the top, natural raw materials compostable products, dust to dust. We’re pursuing closing the loop in both directions.

Perhaps the next step for you is to look at energy balance in your recycling efforts. It does no good in down cycling materials if you use more fossil fuel to generate the energy to drive the recycling process than you save from recycling in the first place. It’s of no value to earth, you substitute one form of pollution, carbon dioxide, for another form, solid waste. I think in the short run, earth is worse off with the carbon dioxide than it is with the solid waste. So the energy balance is crucial and you don’t get there without renewable energies, renewable sources of energy.

The next one is resource efficient transportation. It’s the tough one. We build our factories near their markets to shorten those pipelines. We drive the most efficient automobile available, we videoconference to avoid the unnecessary trip, but still we’re in the hands of the automotive industry. And at the end of the day, we will close the gap that’s left with carbon offsets. We will plant trees, trees for travel. Did you know that a tree in its lifetime will sequest to the carbon generated by four thousand passenger miles in a commercial jet? So, if you fly from here to London, plant a tree. Come back, plant a tree, in two hundred years, you’ll be even with earth for that trip. We planted fifteen hundred trees last year to offset ten million passenger miles in commercial jets, that was for 1997. In 1998, I don’t know what the number will be, but we will plant the trees for our product travel and our people travel by automobile as well, trees for travel.

The next front is sensitivity hookup. In many ways it’s the most fun. You see lots of new linkages come into place here. Service to the community, involvement in the community, investment in the community, sensitizing the community, through our people, and you see some linkages inside the circle where we’re getting ourselves hooked up. Everybody understanding where we’re going and why and sensitive to the thousands and thousands of little things everybody can do. Sensitizing our customers to the role they have to play, sensitizing our suppliers to the role they have to play, our customers can increase our leverage with our suppliers and together we can make this climb towards the summit of that mountain. The red x’s of course represent chipping away at unwanted linkages.

The next and the last front is the redesign of commerce itself and you see a new big linkage come into play here called "service." Substituting service for products, how do you do that? Well, if you want carpet, I don’t think you necessarily want twenty thousand yards of nylon and stuff, you want comfort and color and texture and comfort under foot and acoustical values and you want the ambiance and the functionality. Those are the services that carpet delivers. We are now willing to sell just the service through a lease and retain ownership in the means of delivering that service, the carpet itself. We retain ownership in that liability for the product at the end of its useful life, we intend to convert that liability into an asset, through closing that loop. It is called producer extended product responsibility. It is a huge principal for you to take hold of and figure out how to promote, make the producer responsible for the product, cradle to cradle. You may find the blueprint for your redesigned commerce. Right here in Lester Brown’s, State of the World 1999, chapter three, "Forging a Sustainable Materials Economy". It perhaps can be your textbook, I urge you to get it, it’s a good place to start for sure.

Well, success on all seven fronts brings us a will and time to the prototypical company of the twenty-first century. What are the characteristics of this company? It’s strongly service oriented by means of those products that deliver service, the service itself. It’s resource efficient, it is wasting nothing. It is cyclical through that technical cycle and through the natural cycle no more linear take make waste processes of the first industrial revolution. Its processes are driven by renewable energy, it is strongly connected to all of its constituencies, its customers, its suppliers, its communities, all of these are engaged in a collective effort and tied tightly inside that circle to each other, everybody knowing why and where we are going. This company is so far ahead of the regulatory process that the regulatory process is irrelevant. Its values have shifted too; it’s committed to taking nothing from the earth’s crust that is not renewable. Those linkages are gone and doing no harm to the biosphere, those linkages are gone, and new and vital linkages are in place. It is a sustainable company--it is sustainable and just and it is an example. It’s an example for every company on earth because it is doing well by doing good, it is doing very well, winning, winning in the marketplace, but not at earth’s expense, and not at the expense of our descendants, but at the expense of who, the inefficient competitor. The inefficient adapter loses in this new game. This company can grow even in a no growth world if we should come to that, with diminishing resources. How does it grow in a no growth world, it grows at the expense of the inefficient adapter, and it grows always with declining throughput of extracted natural capital, declining eventually to zero, only zero throughput of extracted natural capital is sustainable over geologic time, the true long run.

We’re getting ready for the day that oil’s price reflects its cost. A $100 a barrel, $200 a barrel, bring it on, that’s the day that we will be kicking ass in the marketplace. Doing well by doing good, cause and effect, effect and cause, all rolled up into one, the more well we do--the more good we can do, the more good we do—the more well we can do.

What progress have we made? In 1994 we looked at the entire supply chain comprehensively all the way back to the mind to the well hid, and we did the arithmetic and we were staggered to learn that for every dollar of revenue we produced, we had taken from the earth and processed with the help of our suppliers, 1.55 pounds of stuff, earth stored natural capital. Do you know what your business is taking from earth? I urge you to find out but it’s damned hard information to get. We found 1.55 pounds of stuff to produce a dollar of sales. In 1997, that had declined to 1.20 pounds of stuff per dollar of sales, that’s the top line. The bottom line shows the progress towards sustainability. If you take as a given that in 1994 we were 100 percent unsustainable, that is to say zero sustainable, we now can say that we are twenty-two and a half percent of the way there, to sustainability. That translated by the way, into two hundred and fifty-six million dollars of sustainable sales in 1997, more value, less stuff. That is the rule for the next industrial revolution. That is a new standard by which we now measure success. A standard about which we had not a clue four years ago. Sustainability is not a coat of paint; it is the yeast in the bread.

I am often asked to make the business case for sustainability and here it is in my opinion. First to provide the framework, listen to this, please. The economy is the wholly owned subsidiary of the environment. The economy is the wholly owned subsidiary captive to the environment. Without a healthy parent –the child is doomed. Therefore, the first case for sustainability in a pure business sense is survival. If we don’t get there, if we don’t move there rapidly, our descendents will see markets as well as society disintegrate. We must do better than that by them.

The second case is that it is really possible to do well by doing good and we’re seeing it in our business every day--doing well by doing good. I believe that’s the paradigm for success in the next industrial revolution. In the twenty-first century, the companies that do well and do good will be recognized as successful. And it will not be possible to do well without doing it responsibly.

The third case, I believe, is that there are new fortunes to be made. New and noble fortunes to be made, in bringing the technologies and the products of those technologies to market in the next industrial revolution. I think entrepreneurs everywhere should thank Rachel Carson for starting it all in 1962 with that wonderful book, Silent Spring. In the next industrial revolution, the technophobes, the people who hate technology and say it’s the problem, and the technophiles, the people who say it is the solution, will be reconciled, and those technologies are sustainable technologies. Technology and labor, so at odds throughout the whole industrial revolution, the modern industrial era, so at odds, will be reconciled in the next industrial revolution.

The interest of business, the interest of nature, so at odds in the first industrial revolution will be reconciled. Thesis, antithesis, synthesis, the Hegelian process of history again, but leading us towards a sustainable earth. I think one more important characteristic of the next industrial revolution, and we see it in this room, thank goodness, the ascendancy of women in business, in government, in education, in all of our institutions, is coming just in the nick of time. Because women do bring that right brain nurturing instinct to the table, and any man who’s been in a meeting where there was a woman present, knows it’s a better meeting, with a better outcome, because of a woman’s presence.

I talk a lot; a lot of it is with our own people, bringing them along. Early on in the process, in March of 1996, I was right here in Southern California talking to our Bentley people, one of our subsidiaries, during a sales meeting, and it was early for me and I was talking and bringing them along on our journey here and explaining our environmental stewardship and so forth, and not knowing whether I was getting through or not. Your people would say nice things, but then they would, and I never really knew whether I was getting through, until after that Bentley meeting, a few days later, through my e-mail, totally out of the blue, came a message from one of the people in that audience, that Tuesday morning in March. It was one of the most encouraging moments of my life because it told me that at least one person in that audience, that Tuesday morning audience, really got it. It was an original poem composed after that Tuesday morning meeting and sent to me by e-mail from Glenn Thomas. Here’s what Glenn Thomas wrote,

Tomorrow’s child,
without a name,
an unseen face
and knowing not your time or place.

Tomorrow’s child though yet unborn,
I met you first last Tuesday morn.
A wise friend introduced us two,
and through his shining point of view,
I saw a day that you would see,
a day for you,
but not for me.

Knowing you has changed my thinking,
for I never had an inkling
that perhaps the things I do
might someday, somehow,
threaten you.

Tomorrow’s child,
my daughter, son,
I’m afraid I’ve just begun
to think of you
and of your good,
though always having known I should.

Begin I will,
to weigh the cost of what I squander,
what is lost
if ever I forget,
that you will someday come and live here too.

I think "Tomorrow’s Child," speaks to us across the generations with a message so simple yet so profound, reminding us that we are all part of the web of life, every last one of us. During our brief visit here, this beautiful blue planet, we have a really simple but profound choice to make—to help that web of life or to hurt it—and it’s your call how you live your life.