A Social Network Analysis of Sustainability in Georgia’s Carpet Industry
Robertson, Evan D.
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Ideas are a funny thing. Some simply die off at the moment of inception, never gaining any traction in the world. Others spread like wildfire, permeating through all parts of the world and altering its landscape for generations. This is a paper about the latter type of idea. Sustainability entered Georgia’s carpet industry as an epiphany. Ray Anderson, CEO of Interface, suddenly realized the impending ecological crisis that our planet now faces and his company’s role in perpetuating the crisis (Anderson, 2009). With this epiphany came sweeping changes occurring throughout all parts of Interface’s production process. Production workers as well as marketing staff were involved in reducing the environmental footprint at Interface. It is likely that this initial spark would have only stayed at the medium sized carpet manufacturer had it not been for two alternative pressures which would fan the flames to other firms in Georgia. The first pressure came from the EPA who wished to regulate carpet due to the fact that carpet is difficult to handle in landfills and doesn’t decompose (Realff, 2011). Under threat of EPA regulations, the carpet industry established the Carpet America Recovery Effort (CARE) in 2002. CARE’s mission is “to find market driven solutions to the diversion of post-consumer carpet from landfills to meet the time sensitive goals of the Memorandum of Understanding (MOU) for Carpet Stewardship” (Carpet American Recovery Effort, p. 1). The memorandum of understanding was established by private, government, and non-profit organization who created a ten year goal to “increase the amount of recycling and reuse of post-consumer carpet and reduce the amount of waste carpet going to landfills” (Carpet American Recovery Effort, 2008a). CARE is essentially an industry driven regulatory agency. Members of the CARE board include individuals from the major carpet producers: Interface, Beaulieu of America, Shaw Industries, and Mohawk Industries. The threat of EPA regulations caused substantial internal change and pushed the idea of sustainability up on industry’s priority list. The fact that the second pressure made this activity profitable insured that sustainability was set as a priority of the industry. The Leadership in Energy and Environment Design (LEED) was the second pressure that motivated the carpet industry to adopt a sweeping environmental sustainability agenda. The United States Green Building Council (USGBC) was created in 1998 to promote the construction of green buildings. In order to incentivize private developers to build sustainably, the USGBC issued a point system which rated a new or existing real estate development’s energy and environmental design. Within the point system were three points that were pertinent to the carpet industry: Material Reuse (MR) Credit Indoor Environmental Quality (IEQ) Credit 4.1 Indoor Environmental Quality (IEQ) Credit 4.3 MR credit 4 requires that the building “Use materials with recycled content such that the sum of postconsumer recycled content plus 1/2 of the preconsumer content constitutes at least 10% or 20%, based on cost, of the total value of the materials in the project” (United States Green Building Council, p. 52). Using carpet with recycled content could by no means solely earn the developer the two credits available in this category. However, recycled carpet could certainly help the developer achieve the two available points for this credit along with other using other recycled content building materials. The remaining two credits are aimed at environmental health: IEQ credit 4.1 gives the building one point if the carpet sealants emit no more than 50 grams of Volatile Organic Compounds per liter, while IEQ credit 4.3 gives the building one point if the carpet used in the building meets the Carpet and Rug Institute’s Green Label Plus program (United States Green Building Council, 2008). The LEED point scheme ultimately pushed private developers and architecture firms to demand green products from the carpet industry. Together with the EPA regulatory pressure, the demand from consumers of carpet pushed the carpet industry to aggressively adopt environmental sustainability practices and standards. These initial sparks within the industry aided by the fact that in this forest the trees were particularly close together created a conflagration of sustainability in Georgia’s carpet industry. A social network is defined as: Individuals or groups linked by some common bond, shared social status, similar or shared functions, or geographic or cultural connection (Barker, 1999). Networks are fluid entities, with individuals easily leaving and entering the network. The study of these networks has gained only limited traction in the study of local economies. This limited traction is because social network analysis studies social relationships, relationships which are much more difficult to collect data on. However, the social and the economic are becoming increasingly intertwined, especially as our economic structure becomes more knowledge intensive. Social network analysis can be used, together with traditional economic analyses, to study the flow of information or power structures inherent in the local and regional economy. For instance, the spread of sustainability in Georgia’s carpet industry could be understood by the industry’s participation in certain non-profit organizations which set sustainability standards for the carpet industry. As we will see later in this report, the social network of Georgia’s carpet industry is relatively small and tight knit. Three major carpet producers, Shaw, Mohawk, and Beaulieu of America accounted for 9.8 billion dollars of the 14 billion dollars in industry sales produced in 2006 (Davidson, 2006).Since the carpet industry is dominated by a few key players, the process of coordinating standards and disseminating sustainable practices is simplified. Moreover, the carpet industry has three important forums which bring leaders together to discuss the sustainability issues of the carpet industry. These public forums are: the Carpet and Rug Institute’s Sustainability Issue Management Team, the Carpet America Recovery Effort board and the National Sanitation Foundation’s 140 standards board. Together, these institutions play a critical role in bring actors within the industry together, helping them to coordinate sustainability standards and practices. These organizations and the social network of the carpet industry will be analyzed later in this paper. This research paper combines traditional methods for analyzing an industry with the burgeoning field of social network analysis. The paper is composed into three parts. Part one entails the more traditional analysis of the carpet industry using data from the Census Bureau and the Bureau of Labor Statistics. The data was analyzed paying special attention to the implications it has for the social network of Georgia’s carpet industry. Part two reviews the wealth of literature of social network analysis and innovation. The assumption of the literature review is that industries adopting sustainable practices mimic high innovation industries. Thus, the conclusions and observations of the literature can be used to help inform the paper’s social network analysis of the carpet industry. Finally, part three of this report includes the social network analysis of the carpet industry along with recommendations aimed at sustaining and further promoting sustainable practices within the carpet industry.