Charla de Nigel Stansfield, presidente de Interface EAAA

Thank you very much. Please go ahead, we listen to you. I'm waiting actually to see that. Thank you and thank you very much for the introduction. Everybody out there, welcome to my home. My name, as was said, is Nigel. I'm the President for Interface in our EAAA region, essentially all the regions outside of the Americas. Today I want to talk to you a little bit about our business. Just allow me to get used to this technology. I'm looking forward to answering some questions at the end, but what I wanted to do to start with was to set the scene for you, to help you understand that I'm a material scientist, a technologist by trade. I grew up through the Interface organization in the supply chain, manufacturing, R&D, and innovation environments. I'm here to talk to you about our company and our approach to business. Unlike many of you or some of you on this call, I actually found my place in this purpose-driven company some 27 plus years ago when the world was very, very different. It's important to say that through these 27 plus years of our journey, as we moved away from things like smokestacks and fossil fuel and towards a much more restorative future, it's fair to say that we've had much success, but we've also made some mistakes. Crucially, we've learned from those mistakes as we've gone down the journey. Now, some of you will probably know Interface, and certainly Interface has a big reputation in the sustainability world. I wanted to give you a brief introduction of the organization just to level everybody. We're a billion dollar company, a manufacturing company. We manufacture commercial flooring, essentially carpet tiles, LVT, and rubber that we supply across the globe. We're a very profitable organization, but we also are very supportive of the planet and our environment and sustainability missions. We have offices and manufacturing across the global footprint. We employ about 4,000 people, just over 4,000 people. The reason I mention this is sustainability is what Interface is recognized for. We've spoken a number of times at places like Sustainable Brands, but we're still a very small company. While I'm immensely proud about what we as a business have achieved in the last 27 years and I've been very much involved in that throughout that journey, it does sadden me to see that there are still not more and more organizations like Interface taking a leadership position. Sustainability is at the heart of Interface and has been for many, many years. We were pioneers in sustainability over 25 years ago. You see a picture on the screen of our founder, Ray Anderson. We started then partnering with our customers and our suppliers to reduce our environmental impact. In fact, in 2020, in October, Interface was awarded a United Nations Global Climate Action Award in the category of Net Zero Now, in recognition of our sustainability efforts and our Climate Take Back mission, which I'll talk to you about. Our Climate Take Back mission, as we said earlier, is our commitment to running a business in a way that helps reverse global warming and creates ultimately a climate that is fit for life. Part of our Climate Take Back mission, and one of the reasons I'm proud and pleased to be representing Interface on this call, is to make a call out to others to do the same and to join the journey to create a climate fit for life. Interface was the first global flooring manufacturer to ensure all its products across its entire portfolio were carbon neutral across the globe. We can even calculate the contribution a customer's purchase will make towards tackling global warming. This year we made a significant step forward. Interface launched our Embodied Beauty product range, which is our first ever carbon negative carpet tile on a cradle-to-gate basis. It uses a new innovation that we're integrating into our products as a standard, which is our CQuest bio-based backing. We have a special backing system that goes on Embodied Beauty that helps us create this first ever carbon negative product for the flooring industry. We also complement that with our product take-back system. Interface's ReEntry program we launched in 1995, before circular economy was even discussed. Our commitment of our ReEntry program is to take customers' used flooring back and use it in the most sustainable way possible, normally through things like reuse or repurposing, but ultimately can include recycling. I want to talk a little bit now about our Climate Take Back mission. As we said earlier, this is our mission to run a business in a way that helps reverse global warming. Our first sustainability goal we called Mission Zero. Mission Zero was actually focused on doing less bad, focused on doing no more harm. Climate Take Back sees us consider the next step: how we can be more positive as a business, how we can actually do more good, in fact how can we become more regenerative. In other words, how can we help restore the planet. As you can see on the screen, our plan consists of four strategic pillars. It really boils down to simply this: Living Zero is our homage to our Mission Zero heritage and it's about continuing to stop emitting and putting carbon into the atmosphere. The second pillar of Climate Take Back is to Love Carbon, stop seeing carbon as an enemy and actually see carbon as a really important resource. The challenge with carbon is we've got excess carbon now in the atmosphere. Our third pillar in our Climate Take Back strategy is to Let Nature Cool, let's avoid getting in the way of the natural process that nature has developed over billions of years to take care of carbon in the atmosphere. Why can we not support that in the way we run our businesses, our factories, our operations? The fourth pillar speaks to what I spoke about earlier about influencing change. How can Interface and others lead the industrial re-revolution, the next industrial revolution, by interrupting business as usual and making reversing global warming the most profitable way in the future of actually doing business? I talked about carbon earlier. In our Climate Take Back strategy, carbon is a really key focus. You cannot help if you watch the news or listen to podcasts or when you're browsing social media, everybody can see that climate change is a hot topic and it's happening now. It can often seem quite confusing, the nuances of climate change, the different science, but one thing that we all can agree upon is that there is simply too much carbon dioxide in the atmosphere and that's what's causing global warming, which in turn is leading to climate change. In response to this challenge of carbon emissions, many companies like ours and governments have made commitments on how they can play a role in the path to a net zero carbon future. Our focus at Interface is on using carbon as a fundamental building block in our products. You can see from other organizations like HSBC who have committed to net zero financed emissions by 2050, Sky broadcasters net zero by 2030, Unilever by 2039, Apple net zero by 2030. This is a hot topic for our customers. All of those people I listed are critical end users who buy and use our products. So our Climate Take Back strategy supports very much our customers and the direction that they're going. We all have a lot to do. I'm just going to talk you through some of the things that we're going to do at Interface to move forward on our progress towards a climate fit for life. Let me talk about our own path, our own journey to carbon negative. We take our cue from nature. We have been practitioners of biomimicry for many, many years, and we've learned how to work and use carbon in our engineering to make better products. We collect carbon and we store carbon in our new innovative backing systems, our CQuest, that prevents it from being released. We have the ability now to engineer this embodied carbon phase of the carbon life cycle to be negative in our products. We do this by working not just with materials that otherwise would have been released into an unwanted carbon cycle, similar to the way that plants decay and trees decay. We actually capture the carbon in our products and store it in our backings, preventing its release. When you add that to our improved manufacturing and our 25 years of sustainability journey and knowledge, it results in the world's first negative embodied carbon footprint product that we launched, Embodied Beauty, in 2021. This is the beginning for us, the beginning of the next phase of our journey to move to a carbon positive business. Now, we cannot control operational carbon and the usage of the product in its life, but what we can do is we can offset the impacts of this phase by supporting projects such as reforestation, renewable energy, and various other credit projects that can be used. That has allowed us and helped us to bring our entire product portfolio to a carbon neutral status within the last few years. So every product you buy from Interface now is minimum carbon neutral in its whole life cycle, and we've gone that one step further now with Embodied Beauty to deliver carbon negative products on a cradle-to-gate basis. All of that supports our ultimate goal of becoming a carbon negative enterprise by 2040, which I think once again sets Interface out ahead of the rest who are looking at carbon neutrality within the next 10 to 20 years, whereas Interface is moving one step beyond that into this carbon negative future. We can even now illustrate this with our customers. To give you an example of what a purchase from a customer would look like and how that supports our brand and our future and our overall business profitability and sustainability: if a customer were to buy 25,000 square meters of one of our Embodied Beauty products with the new CQuest bio-based backing, on a cradle-to-gate perspective it would be the equivalent of saving seven and a half metric tons of carbon emissions, which is about the equivalent of a 30,000 kilometer car journey or about ten acres of carbon sequestered by a forest in one year. So even such a small component in the whole built space as carpet can be and is, it can still have a very significant impact in terms of sequestering carbon and controlling it in the atmosphere. This is how we position this with our customers. It supports our customers' journey to a carbon neutral future or a carbon negative future. We also don't just consider our products when we think about impacts. Since the mid-1990s, we have been using a system that we call EcoMetrics to measure and quantify effectively the metabolism of our operations. In other words, we look at how much we take in terms of material and energy, how much we make in terms of product, how much we waste in terms of raw materials and emissions. We also consider, and have done since the 1990s, the carbon impact on our products. As I said, we've been measuring this EcoMetrics now since 1997 was the first baseline that we set. For a company, we have many, many highlights now. Whilst as I said earlier many companies are now setting net zero goals for their operations and manufacturing and functions in 2030 or 2040 or 2050, Interface has already reduced our greenhouse gas emissions by a whopping 96% since we set the baseline in the 90s. Across our manufacturing plants, we are already manufacturing using 75% renewable energy, renewable electricity, but also renewable gas as well by working with our suppliers. We're using more recycled and more bio-based materials, and we're redesigning the way our products are made to eliminate that link to the oil well and that fossil fuel. As a result of that, we've been able to reduce the carbon footprint of a carpet tile by 76%, which is again a huge achievement for a company. Almost 50% of our raw materials now are from recycled or bio-based sources. So as I come to conclusion on this, we are not just a company that thinks about products. I want to leave you with three thoughts before I open up to wider questions from the group. There is no perfect single answer, but by fostering a culture of innovation and purpose within your organization, you can map a way forward to a brighter, better, higher quality of life in the future. Key to this is collaboration with your people, your customers, your suppliers, external experts, and in fact other key stakeholders important to your business. Only through collaboration can you truly unlock the potential of your organization. Critically though, you must build resilience in your business. You have to start taking action. Please do not wait until regulations change that mandate that you take action. Action is required now. Interface and many other organizations have been on the front foot of that. The climate we live in today means that we have to act fast to weather the storms that we feel. The businesses I believe that take the initiative and get ahead of this will be the businesses in the long run that remain sustainable and successful. So now it's over to you guys. What's your personal and business commitment to take back our climate? How will you and your colleagues make a positive change? With that, I'll close and I'll open up for questions.

It's a really good question and I'll answer that two ways. When we actually launched our Climate Take Back strategy, which was only in 2016, and when we were already well on the journey to Mission Zero, by then Interface had already embedded sustainability into the very fabric of our organization, our very DNA. So to make an announcement to a company that was well on the way to achieving Mission Zero that the next mission was actually to go beyond zero and have a positive impact was a very natural direction for us as an organization. However, in 1994, in August 1994, when Ray Anderson, our chairman and founder, stood up and said to the business, 'We're going to be neutral, we're going to have a zero impact,' that was much more challenging as you can imagine. In the 90s, there was no roadmap for sustainability. Sustainability was not language that was used in business. So it took quite some time for the organization to come to terms with what that meant, how that would look. We didn't actually launch externally our Mission Zero commitment to have zero impact by the year 2020 until the very end of the 1990s and the early part of this century. But the journey now, when you are a very purpose-driven organization and you've embedded sustainability in, it feels very natural for us in the organization to move from Mission Zero to Climate Take Back.

So internally within our organization, we're a very values-driven business, a very values and purpose-based organization. We have really four key stakeholders: our employees, our customers, the environment, and obviously our shareholders and our investors. Value to the different stakeholders is very, very different. So to give you a couple of examples, for our employees, we operate various schemes to educate and train and develop people on things like sustainability and environment concerns, local to the environments where they live and work and operate, but also in the wider context of things like climate change. Obviously, our initiatives around creating carbon negative and carbon neutral products is very much customer driven and to support the customers and some of the customers' underlying sustainability ambitions and strategies. All of this leads to a great brand reputation, it leads to high equity if you like with our stakeholders. It also leads to a much more resilient and robust business that people want to work for, people want to do business with, and investors want to invest in. You can imagine if you think about the value proposition of a carpet tile company, there will not be many aspiring graduates leaving university looking to work in the flooring industry in the manufacturing of carpet. But I can imagine that there are lots of those same graduates very much driven to work in a values-based, purpose-driven organization whose ambition is to reverse global warming. That's a very key strategy for us.

Yeah, it's a really good question, one we often get asked. The reality is that not all of our customers are advocates of sustainability and the environment, and don't necessarily overtly support it. It may be more of a covert support for these kind of strategies. It's also that the marketplace has been very difficult as you can imagine over the last 18 months. Our business, about 50% of our global business is commercial office based, and the commercial office space has seen some challenges through the COVID pandemic and is no doubt going to change moving forward. You can see with that global pandemic that supply chains have become less stable and a bit more fractious. We're seeing some challenges now around things like raw materials and supply chain. All of those are normal business things that people have to deal with, but when you're doing that in a way that is purpose driven and you're driving towards reversing global warming and you're looking for R&D and initiatives that can make carbon more resourceful, times like this, the last 18 months, have certainly proved difficult. I'm so immensely proud that Interface committed, as we started to go into this corporate crisis, that we were not going to slow down on our investment in innovation and R&D and development of new product and design. We were going to continue to do that, and we have passionately gone at that. Through the pandemic, we've made some significant changes to the way we present our products in the market, not least of which is the launch of Embodied Beauty, the carbon negative product. That itself internally presents challenges when you've got the dynamics of a challenging economic environment and yet you still want to maintain a leadership position. So all of those are the dilemmas that we face in the organization.

Yeah, so internally in our organization, organizations have purpose and missions and vision statements, and that's not at all uncommon. But as a business, when we were thinking about what's beyond Mission Zero, what's next, the stark reality that we're all faced with at the moment is that doing no more harm is simply no good anymore. There have to be some businesses out there that can have a positive impact on the environment, because there will not be enough businesses in my view doing no more harm going forward. So it was a very natural progression for us to think about what's beyond no more harm. How can we become an ambassador for regenerative business, for true sustainability? That naturally led us to think about where your biggest impacts are as an organization. For Interface, the biggest impact we have is through our supply chain and in our manufacturing. About two-thirds to three-quarters of our greenhouse gas impact is in our supply chain. So it was natural to continue to focus on that and start to bring products out that had a positive impact on the environment or had a carbon negative footprint. That's the progression that we've made. We succeeded and delivered our Mission Zero commitments, and we published a detailed dossier on that on our website in 2019. Our commitment now is to become a carbon negative business without the need for any offsets by the year 2040. Embodied Beauty sets us well on the way for that, and it's the beginning of a series of changes that the world will see from Interface as we move to a more restorative, regenerative business, building a climate fit for life.

Thank you very, very much. Thank you for having me. It's been a great pleasure. Take care.