Reducing the environmental footprint of any business can present challenges, especially for a business as focused on aggressive growth as Mohawk has been in recent years. That’s why we depend so much upon a set of 2020 operational intensity goals to help us monitor our growth in relation to our footprint. These goals emerged in late 2009 when we began formalizing our global sustainability practice. With 2010 as an appropriate baseline year, a ten-year horizon felt like the right period of time to work toward meaningful reductions of 25 percent — in energy, emissions, water and waste intensities.
Fast forward to 2015, when we used the mid-term point as an opportunity for thoughtful evaluation. The year also saw us achieve one of our goals — waste-to-landfill intensity — a full five years ahead of schedule. A big takeaway: While 2020 has remained a line in the sand, there have been constant shifts around that line. Business cycles, market demand, organizational structure, acquisitions and new technologies are among the many dynamics that have and will continue to impact progress — both positively and negatively — toward these goals. That realization means we are not waiting until 2020 to take a thoughtful look at our goals, but rather, we are using them more than ever to help us manage growth.
We credit much of our progress to the fact that sustainability goals are furthering business objectives. For example, our 2020 water intensity reduction goal is well within sight five years out, in part because water conservation initiatives not only drive progress toward our goal, but also contribute to expense reduction — a key business strategy.
We’re also seeing that sustainability goals are driving business process. Our waste-to-landfill intensity goal served as the precursor to the development of an internal zero waste manufacturing program that we are now scaling on a global basis. In addition, we credit our goals with helping to nurture a culture of workplace efficiency — something that helps drive business value through improved product quality, increased asset utilization and cost reductions.
One of the biggest challenges we’ve encountered with respect to our goals has been Mohawk’s acquisitive nature in recent years. As we’ve integrated newly acquired manufacturing facilities, we’ve discovered that sustainability drivers such as modern, efficient equipment and best practices vary tremendously across geographies and markets — all of which factor into the pace of progress toward our goals.
We’re addressing this challenge by leveraging the strong operational competencies in our legacy businesses into newly acquired businesses. For example, our initiatives and processes to reduce waste are easily exported to all areas of the business, with modifications to address specific waste streams where they differ. Because we have such breadth and diversity in our product portfolio and geographies, there are constantly new opportunities to extend a good process developed in one area to the entire enterprise.
Sharing best practices is also a tremendous strength as we integrate these acquisitions. Though we manufacture many different types of flooring and our businesses function differently across the world, the common thread that is woven throughout Mohawk Industries is our scale and shared expertise of the enterprise. While our business units have the flexibility to adapt to their local markets, we are also constantly searching for opportunities to share our successes throughout our Company.
When we identify a process that delivers results in one product category, implementing it in other categories is relatively easy because the results are proven, and it isn’t necessary to start from scratch. Our U.S. carpet operations, for example, have, over the years, mastered domestic logistics, from warehouses to transportation assets. Dal-Tile, on the other hand, has optimized international container shipping overseas. Though quite different, the two businesses routinely assist one another with their respective logistics expertise. This sharing of best practices results in both economic and environmental benefits for our Company as a whole. We’re optimistic that these types of initiatives will be invaluable in accelerating the pace of our progress as we move forward.
As we’ve conducted a mid-term evaluation of our goals, we’ve also observed that our goals have been well-chosen in terms of their targets and time horizon. We knew that setting unattainable or aspirational goals could put a damper on the internal buy-in from our employees, who are critical to the process. On the other hand, stretch goals might ultimately result in more progress and impact. We believe it’s been essential that we strike the right balance between goals that are attainable and those that provide an appropriate amount of aspiration, and are finding that our 2020 goals have done so.
Longer-term goals also have required some leap of faith. In the case of our ten-year goals and beyond, it has not always been clear how we’re going to get there. Will the technology evolve quickly enough? Will required investments satisfy hurdle rates? How does business growth factor into the rate of progress? By asking the right questions in 2015 rather than 2020, we have strengthened our ability to realize continued progress over the next five years. At Mohawk we think it’s wise — even necessary — to continue to raise our sustainability sights, even if the initiatives and technologies necessary to reach our destination are not fully in hand. It’s among the best ways that we’ve found to drive truly meaningful progress and deliver significant impact.
Chief Sustainability Officer