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CEO: “I can only convince other business leaders if I can prove (sustainability) earns them more money”

April 30, 2012
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dollar signStef Kranendijk is chief executive of Desso, a Netherlands-based manufacturer of carpets for home and commercial use, and artificial grass for sports. Stef will also be presenting at Ethical Corporation’s 11th Responsible Business Summit this May.

Ethical Corporation: "Cradle-to-grave" is an increasingly recognised concept, but what's "cradle-to-cradle" exactly?
Stef Kranendijk: As opposed to cradle-to-grave, cradle-to-cradle takes its concept from nature. In nature everything goes in cycles. There is no material waste in nature because everything is being reused by micro-organisms or plants. So rather than romanticise nature, this approach is trying to learn from it. The end objective is that you make products whose materials are pure enough to be disassembled after use and made into new products or returned to the biosphere.

Ethical Corporation: How did you come across this approach?
Stef Kranendijk: It came as something of a revelation, to be honest. I'd never heard of cradle-to-cradle until a consultant in Holland gave me a DVD about it. My interest was immediately triggered. It's such a logical, meaningful, relevant concept. It also brought on a moment of panic, though. I realised that, to do this, we'd need to completely change the way we work — in research and development, in manufacturing, and the way we market and sell. That's precisely what we've done over the last couple of years.

Ethical Corporation: What makes this approach so relevant in your opinion?
Stef Kranendijk: The carpet industry in the UK alone disposes of 600,000 tonnes of used carpet into landfill every year. In France and Germany it is generally
incinerated. With the seven billionth human being about to be born, we have to think of new ways to reduce our waste of resources. I passionately believe we
should all be much smarter about how we design products and use resources. Instead of worrying about cutting back on everything, this way we can then offer
hope to future generations. We need go from the linear economy to the circular economy where resources and materials are in a continuous loop.

Ethical Corporation: Why did you think cradle-to-cradle would be beneficial for Desso?
Stef Kranendijk: Quite apart from helping to shape a world in which we can promote economic growth and wealth without denigrating our resources, it's in our
own commercial interest. The architects and designers we work with are enormously impressed by our approach. Our customers are pleased to be able to buy
greener products as well.

Ethical Corporation: How is this approach changing the way Desso does business?
Stef Kranendijk: Take our carpet tiles, which represent half our business. We've put 90% of these under rigorous assessment to get rid of all unwanted chemical components. They all have detailed phase-out plans to get rid of any unacceptable materials. As part of this process, we've developed a new carpet backing called EcoBase, which is 100% safely recyclable.

Ethical Corporation: Is Desso actively promoting recycling then?
Stef Kranendijk: We've set up our own recycling business unit, called Refinity. We take back used bitumen-backed carpet tiles — both our own and those of
our competitors. Using our own proprietary technology, we then separate the yarn from the backing. We sell the bitumen to the road and roofing industry. As
for the yarn, that goes to one of our suppliers, which has built a €20m depolymerisation plant in Slovenia to recycle it into new yarn. None of this was
happening three years ago.

Ethical Corporation: What's been the biggest challenge in terms of implementing this approach?
Stef Kranendijk: Getting our raw material suppliers and their suppliers to give us the raw materials we want. We had to work directly with the likes of Dow
Chemical, BASF and others in the chemical industry. Not all wanted to give us the exact percentages of the ingredients in their products. To get around that,
we set up a tripartite agreement whereby the suppliers would provide the data to our research partners, Epea International, without us seeing it. This is hard,
grinding work, but these are the kind of obstacles you need to overcome to make progress.

Ethical Corporation: How do other business leaders respond when you discuss this concept with them?
Stef Kranendijk: I discuss the issues with many business leaders at companies such as M&S, Unilever, B&Q, Nestle, Philips, DSM and so on. The idea is
spreading quite fast, though not every company can embrace it all as fast and as completely as we have. Some of them are big supertankers and it will take time
to turn them around. Ultimately, I can only convince other business leaders if I can prove to them that this approach earns them more money. In our case, our profit margin — before interest and tax — in our carpet division has gone up from 1% in 2006 to more than 9% in 2010. That gives real credibility to the cradle-to-cradle concept.

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