John Wells President and CEO Interface Americas Making the Business Case for Sustainability

Sustainability Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. (Brundtland Report) Leave the world better than you found it, take no more than you need, try not to harm life or the environment, make amends if you do. (Paul Hawken) A sustainable society is one that lives within the self-perpetuating limits of its environment. That society is not a "no growth" society - it is, rather a society that recognizes the limits of growth and looks for alternative ways of growing. (James Coomer) Population – 12 billion Energy needs will double CO2 accumulation in atmosphere accelerating Global cant change

Business Case Competitiveness Innovation Investor interest Customer demand Employee engagement

Interface Category Sales Breakdown 2006 5000 people worldwide $1.1 billion in revenue NASDAQ symbol IFSIA

Interface is the leader in the Global Carpet Tile Market InterfaceFLOR / BentleyPrinceStreet / Heuga Brands 2006 Market Share Analysis All Competitors 60% Interface 40% Interface 40%

Interface Named To Business Ethics Best Corporate Citizens List Interface, Inc has been named to the 100 Best Corporate Citizens List By Business Ethics Magazine. The survey recognizes best practices in the area of corporate social responsibility. My job in the next few minutes is to explain why Interface is receiving this recognition. And give you a quick view of the journey we are on! To tell Interface’s story – I must first tell you the story of a great man, the founder and current chairman of Interface Ray Anderson. I want to start my story at a pivotal moment in 1994. But before I do let me tell you how our company started in 1873……….. An idea, a passion for a new product, lifesavings, start, struggle, success, taking public, globalization, 21 years “life” , success by all the normal measures! THEN…..

First Mover in Sustainability: Interface Continues to be Recognized as the Leader in Sustainability

Epiphany - What is your environmental position Epiphany - What is your environmental position? – customers asking, also saying “Interface doesn’t get it” – doesn’t get what? Ecology of Commerce- “Death of Birth” - central theme Living Systems in decline – reefs, forests - Industrial System is the culprit – Ray’s reaction – “plunderer” Institution of business/ industry – the most pervasive, powerful, wealthiest institution in the world has to lead the change…. II. My story…………observed significant personal and organizational transformation

The Economy and the Environment Which is which? A little test An old flawed view would have the ‘environment is a subset of the economy” what is true?

Environment Economy Economy is the wholly owned subsidiary of the environment!

Flows from the Environment to the Economy: Materials Energy Water Air Food Economy

The Economy grows at the Environment’s expense.

waste, pollution, and greenhouse gases into the Environment. But these are not the only flows. The Economy dumps its Environment waste, pollution, and greenhouse gases into the Environment. Economy

And the Economy grows still more at the expense of the Environment.

How long can this go on? Environment Economy Now let’s look at this in a different way!

ENVIRONMENTAL OPPORTUNITIES CURRENT INDUSTRIAL “LIFECYCLE” Emissions Raw Material Extraction Manufacturing/Interface Customer Landfill/Water Waste Taking resources from the Earth without putting anything back into the regenerative cycle.

Recycling/Composting/ ENVIRONMENTAL OPPORTUNITIES FUTURE, SUSTAINABLE, INDUSTRIAL “LIFECYCLE” Emissions Renewable Energy Recycled/Renewable Materials Manufacturing/Interface Customer This graph represents what things would look like with a “Sustainable” or “Regenerative” Cycle in place. This shows a relationship where everything is being put back into a “regenerative” cycle – either through composting of bio-based materials or through closed loop recycling of other materials. This ties back to how we define Mission Zero as “reaching the carrying capacity of our global society, living in harmony with Nature. In some cases it is “absolute zero” and in others it is not. It is about reaching a balance in the system where we are taking less than we give back. Put a different way, Mission Zero means that place where the impact of your activities do not degrade nature’s ability to recover from the changes we make. It means reaching a balancing point or carrying capacity of resource utilization. Interface is a minute player as far as absolute impacts, but a major player in terms of relative impacts on each of the Seven Front initiatives. Recycling/Composting/ Biodegrade A Regenerative Cycle where we take less than we give back to Earth, balancing our existence.

Sustain Protect Restore Our Core Value, Our Vision The first sustainable industrial company on Earth. “ZERO FOOTPRINT” by 2020 Help restore our world through the power of our influence. We call this...

Our Strategy to Get There… 7 Fronts of Sustainability: Zero Waste. Benign Emissions. Renewable Energy. Closing the Loop. Resource-Efficient Transportation. Sensitivity Hook-up. Redesign Commerce.

Competitiveness - costs are down not up The next points supporting the business case for sustainability how Interface people have galvanized around a bigger purpose than just making carpet, selling carpet or counting the money at the end of the day. They truly believe they are engaged in a much higher purpose!!! Nowhere has this been more evident than in the critical innovations that have resulted in striving for our ultimate vision.

Twelve year Progress Waste Reduction Waste to Landfill $336 million in cumulative avoided waste Waste to Landfill reduced by 70% Greenhouse Gas Emissions Improved efficiencies and direct renewable energy purchases – 37% LaGrange, GA landfill gas project resulting in a net absolute GHG reduction of 13% Green-e certified renewable energy credits (green tags) – 10% Water Intake Water intake per square meter of carpet is down 80% in modular carpet facilities and down 62% in broadloom facilities from 1996 due to conservation efforts and process changes. Renewable Energy 16% of total energy, 7 facilities have achieved 100% renewable electricity Quest teams, Quest bonus The first point of the business case for sustainability is partially represented in this side. Cost are down not up! We are 40% of the way to the apex of mount sustainability Interfacesustainability.com – total transparency

Twelve year progress continued: Closing the Loop ReEntry: 103 million pounds of used carpet material from landfills. Percentage of Recycled or Bio-based Raw Material – the percentage of recycled or bio-based material in Interface Inc’s global products increased from .05% in 1996 to 20% in 2006. Climate Neutral Products – Cool Carpet – 11.5 million square yards of Cool Carpet in 2006 for a cumulative program total of almost 26 million square yards since 2003. Resource Efficient Transportation – More than 75,000 trees have been planted in this program since 1997. Quest teams, Quest bonus The first point of the business case for sustainability is partially represented in this side. Cost are down not up! We are 40% of the way to the apex of mount sustainability Interfacesustainability.com – total transparency

Innovation - accelerating The next points supporting the business case for sustainability how Interface people have galvanized around a bigger purpose than just making carpet, selling carpet or counting the money at the end of the day. They truly believe they are engaged in a much higher purpose!!! Nowhere has this been more evident than in the critical innovations that have resulted in striving for our ultimate vision.

Nature as a Model Nature as a Mentor Nature is the most sustainable model there is – existed for millions of years In Nature there is no waste, Nature runs on Sunlight, etc.

No Glue Project

No Glue Project

Landfill Gas Project

Investors are Measuring Environmental and Social Metrics in Addition to Financial….

In 1995, some 55 socially screened mutual funds had $12 billion in assets, according to the Social Investment Forum. A decade later, such funds numbered more than 200, with $179 billion in assets. “Environmental, social, and governance issues are now commanding dramatically more attention,” Goldman Sachs chief U.S. investment strategist Abby Joseph Cohen.

Customers are Asking: Jeffrey Immelt, GE (10 billion investment in clean tech R&D) Toyota over 200,000 hybrid gas electric vehicles sold – up from 91 U.S. Green Building projects currently under Leed certification are 781 compared to 100 five years ago. Walmart is driving change through its supply chain

Employee engagement is driving up retention and attracting talent

Our supply chain is critical to this journey because 74% of GHG emissions happen outside of our process and inside our supply chain.

used to think when we created them” Albert Einstein “ The world we have created has problems that cannot be solved thinking the way we used to think when we created them” Albert Einstein “The future ain’t what it used to be” Yogi Berra