How a commercial carpet giant built an inclusive business in its supply chain

Interface, a commercial carpet company, set out 10 years ago to see how it could build an inclusive business in its supply chain. A failed program and several iterations later, the work they’ve done through their Net-Works program has earned them a U.S. State Department Corporate Excellence Award.

The U.S. Department of State presented its annual awards for corporate excellence on Thursday, recognizing businesses such as General Electric in Saudi Arabia and McDonald’s Deutschland in Germany for their inclusive hiring practices, and Bureo in Chile and Interface in the Philippines for oceans management.

Interface leaders are open about the challenges they’ve faced in their efforts to create a more sustainable supply chain. Erin Meezan, Interface’s chief sustainability officer, said she hopes the award will be an opportunity to share the company’s experience so others can learn from it.

The company’s Net-Works program, a partnership with the London Zoological Society and one of its suppliers Aquafil, provides communities with jobs collecting discarded fishing nets, which are then sold to Aquafil and used to help make Interface carpets, while also removing harmful ocean plastic.

The program, now active in about 35 communities in the Philippines and in Cameroon, was first piloted in the Philippines in late 2012. Some of the early communities have a sustainable business in place, but others are not quite as far along in the process. To date, the program has collected about 100 tons of waste nets — enough to wrap around the world twice, according to Meezan — and has had an impact on about 900 families.

Devex sat down with Meezan to hear about Interface’s journey and what other companies looking to build inclusive businesses or improve supply chain sustainability should keep in mind. Here is an excerpt from that conversation, edited for length and clarity.

Net-Works followed a program you had called Fair Works that didn’t work. What lessons did you learn in that process?

We’ve had several iterations of challenging ourselves, whether it’s bringing products back and establishing recycling systems or redesigning products with materials that have an inclusive business model. We’ve always been going down this path. Fair Works was an attempt that we made a couple years prior to Net-Works where we worked using a socially inclusive business model to target artisans in India, and using both their weaving skills and local materials we designed a product that was very different than our conventional commercial carpet tile.

One of the biggest lessons was we introduced a whole set of raw materials and designs that wasn’t conventional in our industry and was not something that our customers adopted or were interested in. It didn’t resonate with them. So we sort of said OK, let’s go a bit back to the drawing board, what we know we did really well was identify this overlap between a sustainability goal or a sustainable living goal. We got that part right but the product part wrong.

We initially thought that Fair Works was kind of a commercial failure but what it really did was teach our innovation team how to structure a model for inclusive business that we ultimately used to much success later once we realized the right material and a different set of partners.

What are some of the key challenges you’ve faced as you’ve set up this enterprise?

I think the first was certainly at the outset. It was just the lack of other models. This was six years ago, there were not many companies we could think of to call and ask. And so we did rely on outside, nongovernmental organizations and we did ask for help with outside experts we worked with. The good news is that’s not so much the case now. I think there’s actually lots of organizations that are starting their supply chains with this in mind so I think there are lots of good models out there.

Another challenge was the business mechanics of trying to work through a model like this. I think there are three pieces. There are the sort of agreements and processes that don’t really exist so you’re writing a new thing for that. It is not easy to work with a supplier that’s never done a supply chain agreement with a local community. Even little issues like whose name do we put on the contract, how do we hold people accountable if shipments aren’t delivered, things like that, just those business mechanics and agreement parts.  

I think the second part of that is the way of doing business in a collaborative environment versus maybe a conventional business. We had three equal stakeholders at the table in addition to our supplier — we had the Zoological Society of London, we had Interface, we had the local communities and then we had our yarn supplier. How those groups function to make decisions, deal with conflict and the timeframe that it takes are very, very different than maybe a conventional business is used to.

I think one of the lessons that we learned is that it takes a lot longer than you think, you end up implementing different processes for communication, for making decisions that maybe is not something a conventional business would do. It gets very tactically down to the kind of people  that we have at Interface running these sorts of things that need to have a really great skill set and the ability to be very flexible. A lot of these skills are not skills that are taught in a conventional business school. Those are some of the things we’ve learned and have navigated around as we’ve built the program and launched it. And I think we build upon those early successes as we look to scale it beyond that.

What are your plans for scaling the program?

We think we have a pretty good blueprint for how we could work with local communities to put in place a collection system, to make sure they receive payment for the work that they do, and make sure that the nets are able to be incorporated into their supply chains.

We’re having that really interesting question now of not really just where, I think there continue to be a lot of great sites where we could scale this, but what does that model really look like and how much of a role does Interface continue to play. And I don’t think we have the right answer yet.

The immediate focus this year is continue to scale the program in the target communities and maybe one potential new location. The second is we’ve created a really interesting ability to take back nets and we’ve been asking ourselves are there other parts of ocean plastic, other ocean plastics that might be able to be incorporated into the Net-Works program and be usable in our products or the products of other companies. So could we potentially expand it in terms of the type of materials we’re bringing back. The third thing we’re really focused on this year is what does that sort of scale model look like. Is it Interface and Zoological Society of London and Aquafil continuing to find grant money and offer investment to do it, is there a different NGO partner, or do we just spend time creating a model that could be easily adopted by local communities, for example, without the need for an Interface or a Zoological Society of London.

What advice would you give to other companies looking at sustainable sourcing and how to build inclusive businesses to support their supply chains? 

It definitely requires a little bit of courage and I think the one thing would be to make sure that you’ve got the executive support in place and a really clear kind of connection to the ethos of your company and how this is going to help advance the business.

I think a lot of the people in the mainstream companies really struggle to show the business value behind doing something like this. So conversations like what role does the business community have in helping deliver the Sustainable Development Goals, those are the type of arguments and sort of thinking that needs to be much more incorporated into a lot of the more of the mainstream companies.  

The advice we have for everyone is, if you’re looking to do this in a company, don’t just make sure you have the right model, but make sure you have the right value proposition for your sector or for your senior executive team to get that buy in. Because it can’t just be an experimental one-off, you really do have to incorporate this pretty deeply into the business.

I guess if there were other companies looking to take this on I would say don’t go that route of this little niche innovative great idea over here, tackle the really hard stuff like your biggest raw material, the most common thing that you use, the largest impact raw material. Start there and build a different model around that.

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