The Impact of Workplace Initiatives on Low Carbon Behaviours - Case Study Report

8 INTERFACEFLOR

This case study provides an example of how incentivising change through setting targets linked to bonuses and awards in a performance driven culture can encourage employee behaviours which support sustainability. Providing feedback on progress towards goals using simple communication techniques in a manufacturing environment helps employees engage with corporate-level targets for carbon reduction and introducing an element of competition can also prove a successful method for implementing change.

Background

8.1 InterfaceFLOR Europe makes modular flooring and is a division of Interface Inc., an American company which designs and produces environmentally responsible carpet tiles and commercial floor coverings. It has manufacturing facilities at its head office location at Shelf in Halifax, West Yorkshire and Craigavon, Northern Ireland and a showroom in London. In 1994, the CEO had an 'epiphany' about the unsustainable nature of industry after reading Paul Hawken's 'The Ecology of Commerce'. Since then, the company has made a commitment to sustainable management practices. This commitment is set out in its 'Mission Zero' promise which states the firm's target is to achieve zero carbon emissions. It aims to become 'ecologically sustainable by 2020, and ultimately to become restorative in terms of impact on the planet's resources' through its 'War on Waste'. To achieve Mission Zero, it has set out clear goals for 2020 on Seven Fronts. These Seven Fronts include eliminating waste and using renewable energy; redesigning processes and products to ensure all resources can be recycled; using resource efficient transportation; establishing links between employees, suppliers and customers to alert them of the impact of their actions on the environment; and focusing on the delivery of service and value instead of materials.

Low carbon initiatives

8.2 InterfaceFLOR Europe operates a wide range of internal sustainability programmes in order to wage its 'War on Waste' - a campaign to tackle the excessive waste produced by flooring manufacturers. The main activities discussed in this case study are the QUEST initiative, EcoSense, sustainability training and 'Green Ambassadors'; and the Green Energy Team. These examples present a rounded view of the individual, social and material factors that are influencing behaviour change at InterfaceFLOR.

Energy and waste

8.3 The QUEST initiative (Quality Utilising Employee Suggestions and Teamwork) uses employee suggestions to improve the efficiencies of manufacturing and office procedures in order to reduce waste. On the factory floor, operatives who work shift patterns are rewarded for improvements to work processes that increase environmental performance, through a bonus scheme that incentivises reductions in waste and resource consumption. The QUEST bonus is worth £800 a year and 175 shop floor operatives are eligible for the payment if they reach a 10 per cent savings target each year for energy, material and waste savings. All staff on the factory floor are eligible for a separate annual 5 per cent bonus if the company's operating income achieves financial targets, and the QUEST bonus is additional as shop floor operatives handle the raw materials and have the greatest opportunity to contribute savings to the business.

8.4 EcoSense is a programme designed to encourage staff to recommend new ways to work more sustainably and take part in environmentally sustainable projects. Interface awards EcoSense Points for the successful completion of activities that fall within categories such as implementing environmental or quality management systems; sustainability training; resource efficient transportation and sustainable purchasing. It allows factories to benchmark themselves against other European and international sites, establish goals and track and report progress. Managers reported that there is strong competition between sites around outperforming other factories and accumulating the highest number of EcoSense Points at the end of each year.

8.5 Examples of initiatives proposed by staff which have won EcoSense points have been purchasing more fuel efficient lorries to reduce C02 emissions; and Interface sites that have received ISO 14001 certification (a voluntary international standard for environmental management systems) have also received points. A European site was awarded points for staff participating as mentors in a local school and sites are also awarded points for implementing sustainable commuting programmes such as car-pooling and cycle-to-work schemes.

Sustainability training and Green Ambassadors

8.6 The company has had a structured training programme since the mid 1990s which encourages staff to promote sustainability at every stage of production and design. This training evolved from the CEO's vision of becoming a more sustainable company. The training is split into three stages. The first two stages are delivered internally and the final stage is delivered by Forum for the Future, which is a non-profit organisation which works with businesses globally to encourage sustainable behaviours. The first stage of the training consists of mandatory attendance at a presentation for all new employees, while stages two and three are voluntary and each consists of a one day training programme which can be undertaken during work time. Participation in the third stage attaches the status of 'Green Ambassador' to the participant. These Green Ambassadors are given some paid time at work to develop sustainability initiatives and help to deliver sustainability training and awareness campaigns across their own departments.

Green Energy Team

8.7 The Green Energy Team is a small group of interested volunteers across the Shelf factory which employs approximately 204 staff. The Green Energy Team meetings began in March 2011, after the Environmental Manager and Energy Manager decided to form the group following Climate Change Week. The team currently has around 12 regular members which meet every six weeks. The format of a typical meeting is for two members to lead discussion on green projects within the factory, providing an update about progress and activities and then facilitating a session where the team asks for further ideas. In one Green Energy Team meeting the group discussed Climate Change Week 2012 for which they want to organise an activity to raise awareness of environmental issues within the firm. The role of the Green Energy Team is currently loosely defined and despite being named 'Energy' team, it focuses on all areas of potential waste and savings. The main purpose of the team is to inform staff about what is happening at the factory and 'keep it ticking over in terms of getting people to contribute ideas'. The ultimate goal is to establish Green Energy Teams in multiple sites across the world and for them to report back to a central point at regular intervals to compare, develop and share ideas.

Process of implementation

QUEST

8.8 The QUEST bonus was introduced in 2005. The European QESH (Quality, Environment, Safety & Health) Director decided to change the bonus for production line staff in order to pass a share of the savings being achieved from waste reduction onto factory floor staff. Production workers traditionally received a bonus based on factory output but the QESH Director negotiated with the trade unions to change it to reduction in waste consumption while maintaining external quality. The latter protects customers to ensure employees are not using substandard material to reduce waste and material consumption. The bonus is measured through assessing factory performance against targets and if targets are met all staff receive the same bonus. For example, in a financial quarter, the number of kilowatt amps used per square metre of carpet produced were measured and a target was then set for reducing this energy use through simple measures such as switching off lights, turning machines off when no material was running through it and closing doors to retain heat. The 10 per cent annual savings target was an arbitrary figure at the time of introduction in order to present a consistent challenge for staff, as InterfaceFLOR believes that there are always opportunities to make savings.

8.9 A QUEST committee meets regularly to review results. This committee consists of managers and supervisors who consider whether there are opportunities for other savings in a production area. They instigate trials for waste, energy and material savings, work out the cost effectiveness of initiatives and determine if investment is required in order to achieve greater environmental savings in the manufacturing process.

8.10 A director revealed that it was difficult to get the trade unions to accept the QUEST bonus at first as they were 'very conservative and suspicious about change'. Industrial action was threatened until it was guaranteed that either the existing bonus or QUEST bonus would always be paid, whichever was the highest. The senior management team also had to be convinced about the introduction of the QUEST bonus, which is funded through savings achieved in the production process. For example, in a year the company may spend £28 million on nylon to produce 15 million square metres of carpet. If the level of output can be raised without increasing nylon expenditure then there is a clear saving. The ratio of expected usage to actual usage can then be translated into cash savings. Managers stated that this ratio is easily worked out:

'Most companies can do this through their management costing information and it's not difficult to achieve.'- Director

EcoSense

8.11 To gain EcoSense points, employees must submit requests in writing along with all necessary supporting documentation from the business division to the EcoSense Administrator in the United States. The Administrator also audits divisions and spends time in each workplace to check that the environmental or quality programme is actually being implemented effectively at the workplace. Interviewees claimed that chance of being awarded EcoSense points for employees' efforts brings out 'the natural competitiveness of senior managers'.

8.12 A point is awarded for implementing an initiative and another point is awarded for producing energy, waste or material savings. The workplace which scores the highest number of EcoSense Points for environmental and quality programmes each year receives a trophy and a signed letter of thanks from the senior management team. The competition element between the different facilities helps motivate staff to engage in EcoSense, in addition to engagement with the Mission Zero commitment.

Sustainability training and Green Ambassadors

8.13 Stage 1: The first stage of sustainability training is part of the mandatory induction for all new employees. It informs staff about the internal sustainability programmes (QUEST, EcoMetrics (see below) and EcoSense), so that all employees understand the environmental mission of the company and what their role in it is, i.e. to reduce waste and material consumption on the factory floor where possible through awareness of how their behaviour and actions has implications. The training involves a presentation delivered by HR and a staff handbook which describes the 'green' achievements of the firm and its ongoing focus. Examples of the information shared in the induction presentation are:

• an explanation of the cost of yarn, so that staff understand that there is a value attached to wasteful actions
• the value of cardboard boxes, as the factory houses thousands of boxes for carpet tiles. Staff were beginning to use them to catch material coming off machines, until informed that each box costs 51 pence and should only be used for the intended purpose to avoid costly overconsumption.

8.14 Stage 2: Stage 2 of the training requires volunteers from any part of the business to engage in a one day training session. The one day training is run internally by Level 3 'Green Ambassadors' and focuses on various issues for sustainability. It also provides information on the aims and objectives that have been achieved within the firm and those which are currently being worked on. Each participant has to undertake a small project and presentation about sustainability activities they have participated in or what could be done to achieve future environmental aims. The Green Ambassador becomes a mentor who will maintain contact with the trainee after the training day to guide their efforts. Personal interest typically drives voluntary progression from stage 1 to stage 2, although there is an implicit expectation that managers should complete this stage.

8.15 Stage 2 training, in particular, explains EcoMetrics, which InterfaceFLOR began tracking in 1996. This measures energy and water intake, waste streams, greenhouse gas emissions and raw material streams, to determine the progress towards Mission Zero goals. The company mantra is that 'what gets measured gets managed' and EcoMetrics assesses how much the firm consumes, in terms of materials and energy, and the volume of products and waste. Each InterfaceFLOR plant tracks hundreds of metrics quarterly. The results are aggregated, annualised and internally published in newsletters and on noticeboards in n each workplace.

8.16 Stage 3: This stage of training is delivered externally by Forum for the Future and discusses sustainability in a broader context, outside the manufacturing environment of InterfaceFLOR. The Sustainability Director asks for volunteers to become 'Green Ambassadors' at varying points throughout the year when batches of new ambassadors can be trained together. Level 3 ambassadors have to submit a project based on one of the Seven Fronts. There are 80 ambassadors across Europe across the total workforce of 957. Ambassadors come from all business functions including finance, sales and operations. All staff who have become ambassadors are still engaged with the programme as it is seen as a long term social behaviour, through which they develop sustainability initiatives in their own departments and help to deliver sustainability training and awareness campaigns. This group can be called upon to represent the firm for external speaking, training, guiding and mentoring.

'I've done things like go out and talked to schools, I get involved with occasional community groups, the local business environmental forum, that sort of thing….we step outside our main role into other areas where we're trying to influence, at least, share ideas about sustainable practices' - Green Ambassador

Building staff awareness

8.17 The main methods used at InterfaceFLOR to build staff awareness include presentations, meetings and high visibility notice boards on the factory floor. All presentations about QUEST are mandatory for staff so that staff are aware that there is a system for making suggestions. These presentations typically inspire suggestions. One employee attributed this to people either saving up ideas they may have had in order to share at meetings or the presentation prompting staff to look for energy, waste and material savings.

8.18 Specific notice boards across the shop floor display smiley faces when a shift has achieved its QUEST target of a 10 per cent reduction in waste, energy or material. The boards also show how much of the £800 bonus has been achieved. Staff can receive £200 in a quarter. If the bonus is missed in one quarter, staff can still achieve a £200 bonus in the next quarter.

'Staff pay a lot of attention to the boards and it encourages people to report waste that is occurring elsewhere to their supervisors' - Director

8.19 Energy monitors are also placed across the factory floor so staff can identify any use of power above the normal levels. Charts about CO₂ emissions and kilowatt usage are displayed on notice boards so staff can monitor how they are performing against targets.

8.20 Where a saving has been achieved in a particular process, a plaque on the wall, item in the newsletter or note on the intranet is used in order to make people aware of the achievement. This approach is also used to embed the process if the achieved saving requires a behaviour change across a wider group of staff.

8.21 Behaviour change is also encouraged through establishing social networks and inter-group links. The Green Energy Team uses meetings on the factory floor to 'get in front of staff' as the schedule of manufacturing operations means that staff are not available outside scheduled shift team meetings. A director stated that cross team meetings have also been introduced in order to get different groups of staff engaging with one another to identify further energy savings:

'Electricians never used to talk to the mechanics and cross team meetings attempt to mix them up and get them engaging with each other. Breaking down these barriers has been a culture change but it has helped make suggestions which contribute towards achieving the full bonus' - Director

8.22 Staff were originally made aware of the formation of the Green Energy team through a notice board poster and the Environmental Manager informed shift managers that meetings were going to be held every six weeks and asked them to encourage production workers to attend. An email was also sent out to invite office-based staff to the meetings.

Staff responses

QUEST

8.23 Managers believe that the QUEST bonus has proved an effective method of encouraging staff to identify areas for savings. They have observed that shop floor staff seek out information and look at the notice boards to see the level of bonus they are achieving. Each quarter the savings are displayed on the notice boards and if the targets have not been achieved, shop floor staff will question why the saving is low. Notice boards are a key communication tool in the manufacturing environment because workers have no access to PCs. Worker interest in environmental performance is in part likely to be attributable to the bonus that is attached to the savings, rather than an individual behaviour change. However, one manager commented that staff showed genuine engagement in Mission Zero.

8.24 Staff can make waste reduction suggestions verbally to their shift leader or on green environmental cards dotted around the shop floor which production workers can fill out and leave on their shift leader's desk for discussion at the next shift team meeting. The individual who makes a suggestion is often appointed leader of the initiative, which instils a sense of achievement, ownership and encourages them to make the suggestion successful through achieving cost savings. The factory also keeps an 'Opportunity Database' in which suggestions are logged and acted upon.

8.25 Managers believe that the incentive provided by the QUEST bonus has led to some good suggestions from shop floor operatives and has maintained their interest in seeking energy, waste or material savings.

'Whatever they're doing and wherever they're working they look at ways to reduce energy. Having an objective to think about (10 per cent saving) makes them more focused rather than going away and thinking about savings for 10 minutes but then forgetting about it all '- Office employee

8.26 One idea which came from the shop floor has been adopted globally. Workers welded a bar across a machine to make it possible to draw a straight line across a roll of carpet with a marker to get a straight edge at the end of a roll. This saves two or three inches of carpet on each roll produced which is a substantial saving when multiplied across the 12 million square metres of carpet produced in Europe. This idea was spread globally by the Green Ambassador at the original site through a monthly telephone conference with other Green Ambassadors about projects at each site. Managers stated that ideas generated by staff are often the best, because production workers see what waste is being thrown away and what waste is being generated.

8.27 Managers in particular have engaged with the QUEST and EcoSense programmes, although they also encourage staff in lower grades to identify reasons for lower performance:

'Managers tend to be quite competitive and if we can tap into that in a healthy and constructive way then that's good. You don't want to be the manager of a factory that comes at the bottom of EcoSense every year. There is an incentive to keep improving all the time. Metrics are published monthly to all heads of divisions so they can see what areas have got worse in terms of material usage and can question teams to see why areas are not performing. All staff get involved in QUEST and EcoSense' - Director

Sustainability training

8.28 An employee who had undertaken Stage 2 sustainability training believed that the training affected his day to day decision making by encouraging him to consider how he works; what type of materials will be used; what will be the most sustainable way of running mechanical equipment; what type of energy consumption the equipment has; whether alternative methods can be used; and what can be recycled. He praised the training as 'very good' and emphasised the importance of role modelling and leaders showing genuine interest in efforts in order to encourage staff to get engaged with the company mission:

' It was good to see enthusiasm from the trainers (ambassadors). There wasn't just lip service being paid to sustainability, they have a genuine interest. The trainer personally followed up any ideas that came out of the training with us ' - Employee

Green Energy Team

8.29 The members of the Green Energy Team are considered to be personally committed to sustainable management practices and have shown interest in learning about ways to reduce the impact of manufacturing on the environment. Members attend conferences and seminars and come back and share their learning with the team. For example, a member attended a conference and trialled a fuel efficient vehicle, which they are now considering hiring for InterfaceFLOR's efforts for UK Climate Week. The Green Energy Team has also been reviewing a new training module for staff which specifically focuses on raising awareness of sustainability e.g. the importance of turning off lights. This module has been produced externally and the Green Energy Team has been reviewing the training offered and providing feedback on it. The team objective was to review and comment on the training before it is given to all staff. This training message is relevant to the home as well as the workplace, because it provides general guidance on controlling thermostats and defrosting food at room temperature etc which are behaviours that could take place at home and work. Managers and staff both reported engaging in low carbon behaviours at work and home with one employee stating:

'We've got recycling on site and this trains people's habits which translate to home' - Employee

8.30 More managers than production workers are members of the Green Energy Team with a 10:2 ratio between management and shop floor staff. Equally supervisors from the factory have expressed more interest in the team than office based staff. This is attributed to the separate location of manufacturing and administrative staff:

'The office block is a separate building to the factory block but we're all on the same site Attendance from the office block has typically been much lower than from the production building; and in that regard it could be speculated that they view the team as a separate thing that is not to do with them and think we're focusing on factory specific improvements rather than company wide improvements.' - Green Energy Team member

Key challenges

8.31 The Green Energy Team has faced challenges in terms of attracting and maintaining staff interest in the group and its efforts. About 25 people attended the first meeting in August 2011 but this number has more than halved since then. The dwindling numbers makes the team's goals harder to achieve and declining participation is attributed to misconceptions staff have about the team:

'When you sit in a Green Energy Team meeting as a staff member, it feels a bit like a lecture - listening to what others are doing and there are these specific champions who are focusing on particular initiatives and staff can end up thinking they're not engaged with this work. People come along to the session, feel like they can't contribute meaningfully, may not understand what's going on fully and go away thinking they're not needed there.' - Green Energy Team member

8.32 The team has discussed attendance at the Green Energy Team meetings and would like to see more shop floor workers attending meetings because attendance has declined among this group. Attendance at meetings is a challenge for manufacturing staff because shifts are not planned around workers taking time out for meetings. The Green Energy Team usually meets at 10am but this is an inconvenient time for night shift workers (shift starts at 9pm) or late shift workers (starts at 1pm). The timing of the meeting therefore excludes these workers from attending. The team has discussed holding meetings at a shift change over time but this raises the question of whether staff would be paid to attend the meeting before or after their shift.

Evidence of impact

8.33 InterfaceFLOR has monitored evidence of the impact of material changes, in the context of technology and infrastructure, rather than individual or social behaviour change. Since 1996, greenhouse gas emissions from its global manufacturing operations have reduced by 35 per cent through a combination of process efficiencies, energy efficiencies (such as lighting and equipment replacement), fuel switching, and use of renewable energy). Also, since 1996, there has been an 80 per cent reduction in manufacturing waste sent to landfill per unit of production which has saved $433 million in cumulative avoided waste costs. More specifically, the space heating policy was reviewed in 2008 and the temperature in most working areas was regulated at 18-20°C rather than being unregulated (which was leading to typical temperatures of 24°C during winter months). Reducing the voltage that feeds lighting systems also cut energy use for lighting. Overall efficiency measures have reduced the energy use per m2 of carpet by at least 38% since 2004.

8.34 InterfaceFLOR has also conducted a life cycle assessment of its products in its 'War on Waste' to assess the environmental impacts associated with all the stages of the carpet tile life cycle from raw material through production to use and disposal. It found that about two-thirds of the environmental impact of the product stemmed from its raw materials and only about seven to nine per cent was caused by their own manufacturing.

'We'd spent years making our own manufacturing as efficient as possible, when what we really should have been doing was tackling the supply chain.' - Director

8.35 Subsequently one of InterfaceFLOR's first tier suppliers has done its own life cycle assessment and has found that 17 per cent of their environmental impact is due to their own manufacturing and 83 per cent stems from their supply chain (chemical manufacturers who have high energy consumption).

'Every stage of the product life cycle requires a company to do their bit. If you can enthuse rather than demand sustainability from your supply chain they are much more willing to engage' - Director

Critical success factors

8.36 The critical success factors identified from analysis of the case study findings are as follows.

Communications

8.37 Communication from managers about the need for change is important in order to engage employees in waste reduction. This helps build a workplace culture of sustainability through consistent messages and recognition of efforts and behaviour which support sustainability and the Mission Zero goal:

'To get staff engaged you need to patiently explain the need for change; then impose clear and consistent leadership and direction and this takes attention to detail to get it right. Focus on employees; make sustainability part of their everyday tasks. Share the successes with them (bonus) and recognise the sustainability heroes.' - Director

8.38 Cheap but highly visible communications suitable for the workplace context are helpful. Noticeboards in the Shelf factory have been a useful tool in stimulating engagement in low carbon behaviours among manufacturing staff through providing performance feedback. To make notice boards effective and engaging they must be kept up to date and organised. Managers must also use them and encourage their staff to refer to them.

'If notice boards get tatty, then they become equivalent to wall paper and people stop noticing them and if managers show interest in them then shop floor staff will too' - Director

Focus on savings

8.39 Combining a focus on cost savings and waste savings in a target-driven culture can be a powerful motivator for change. InterfaceFLOR has a distinctive culture with a rigorous approach to monitoring and performance measurement and a target driven culture across staff groups. It has cleverly embedded measures of environmental performance in key performance indicators and aligned these to performance management systems used for staff.

Incentives

8.40 Incentives can be important where these are embedded in the workplace culture but may focus behaviours on easy changes. Encouraging staff to make 'the easy changes' is a good start in reducing waste and generating environmental and cost savings and can be triggered through incentives if these are an integral feature of organisational culture. An easy change at InterfaceFLOR was for production workers to use the last scraps of material rather than moving onto a new roll in order to reduce waste. The incentive derived from the QUEST bonus encourages these easy changes and helps build waste reduction into the way of working. Incentives may not be enough to 'get people to push over the hump' and focus on the harder to achieve savings which may require external inputs in order to maximise effectiveness. For example, carpet tile waste (edge waste) is one of the hardest types of waste for the company to reduce but it is difficult to challenge staff to reduce this by ten per cent as it would require input from factors outside of their control.

Future Plans

8.41 Interface FLOR is considering making transport changes in future, particularly with reference to its car fleet for its sales workforce. They are undertaking a 'green fleet review' which will examine the existing car fleet, mileage, types of vehicle, types of fuel and company car policy with reference to incentives for lower emissions cars. They may also introduce training in environmentally efficient driving techniques.

8.42 The Shelf factory is also currently awaiting credit approval to install electrical vehicle charging points onsite. The existing car fleet are not electrical vehicles, but this installation is regarded as a 'gesture of intent' to change the existing vehicle types and potentially offer charging points for staff and the local community use.

Key learning points

• Waste reduction targets which are set must be challenging and realistic. Setting lofty targets like Mission Zero means that staff may have unrealistic expectations and these may need to be managed in order to maintain the momentum of engagement in waste reduction. Staff need to understand that achieving the ultimate goal may be a long-term process:
  'You must set the right targets and get people's expectations right; often with these projects people will expect the moon, but you'll never achieve that.' - Director
• Provision of feedback is key to maintaining employee commitment to sustainability goals and using data to measure energy savings is critical to demonstrate to people how close they are to achieving targets. This information should be shared with employees but managers need to take responsibility to interpret statistics and advise on methods of achieving savings. The incentive to act needs to come from regional managers who review the metrics and encourage those on the shop floor who identify waste sources to suggest solutions. Developing a sense of shared responsibility is helpful here.
• The QUEST bonus changed the culture of the factory floor because the workforce is financially motivated. Do not underestimate the impact of incentivising change but recognise that it may not be enough to get staff to tackle the biggest challenges.
• Maintain momentum even if only minor improvements are being achieved. These minor changes can produce significant results on a large scale.
• Finding time and space to discuss changes and identify savings is important in a manufacturing environment. When staff have ideas about making savings they need time to 'bounce them around' and refine them in order to implement them.
• Acting on suggestions made by staff and getting staff to lead on their implementation can be highly motivating. The simplest suggestions can often make the biggest changes and it is the shop floor staff that are best placed to identify wasteful practices.
• Staff from different functions or different buildings, on different grades, on the same site may need encouragement to participate in whole site activities and the relevance of low carbon activities to all workplace environments should be stressed. Team meetings need to provide opportunities for all members to contribute and may require structuring to ensure that staff from different departments contribute and careful chairing to ensure that staff feel able to ask questions and develop a common level of understanding.