Nike, Inc. released its FY12-13 Sustainable Business Performance Summary, providing an update on performance against current business, labor and environmental goals as the company works toward its goal of decoupling profitable growth from constrained resources. The report, which outlines both successes and challenges, shows Nike is making progress across key impact areas of climate and energy, labor, chemistry, water, waste and community.
Evidence of the company&#;s progress includes an absolute reduction of carbon emissions of close to 3 percent across the whole value chain from its FY11 baseline, while revenue grew 26 percent over the same period. Production also grew while the company fulfilled its strategic aim to source from fewer, better-performing contract factories, with a 14 percent reduction &#; from 910 to 785 factories over the last two years.
Some of the challenges in the industry include the rate at which environmentally preferred materials are becoming available at competitive pricing in the market and the rate at which the market adopts new green technologies. In addition, Nike continues to focus on ways to drive ongoing improvements where significant previous reductions have already been realized.
The report also outlines the company&#;s approach to understanding and addressing the meta-trends facing business. In addition, Nike provides a transparent &#;big-picture&#; view of the impacts across its entire value chain, from growing and processing materials to a product&#;s end of life, and the steps of manufacturing, transport, distribution and selling in between. The report shows how the company is focusing on innovating in the areas where the greatest impacts of its business lie, including materials and manufacturing.
&#;Nike&#;s success as a growth company is tied directly to our culture of innovation. Today we believe that sustainable innovation that benefits the athlete, the company and the planet will play a key role in the future of our business,&#; writes Nike, Inc. President and CEO, Mark Parker, in the report&#;s introduction. &#;We believe business has a critical role to play in meeting the challenges of a changing world &#; addressing climate change, preserving the earth&#;s constrained resources, enhancing global economic opportunity &#; not by reducing growth but by redefining it.&#;
Parker also transitioned Nike, Inc.&#;s Sustainable Business & Innovation function into the company&#;s core innovation function last summer, signaling the enterprise-wide role sustainable innovation will play in Nike&#;s future.
Progress on current goals include:
&#;We are constantly integrating more sustainable ways of working across our business. But we recognize that many issues facing business and society are greater than one brand can solve alone. To achieve systemic change we must understand risk and embrace innovation as a way to accelerate positive impacts at scale. Collaboration and unconventional partnerships will be critical to our collective ability to design more sustainable business systems, &#;said Hannah Jones, Nike, Inc. chief sustainability officer & vice president, innovation accelerator.
The summary report is available on an interactive web experience at http://www.nikeresponsibility.com. The site features a lifecycle assessment comparing three different footwear styles over a five-year period showing reductions in energy (-24 percent), emissions (-21 percent), water (-13 percent), waste (-35 percent), and chemicals (-20 percent) resulting from changes in design, materials and manufacturing processes. It also includes access to a searchable database of all contracted factories, including details of location and workforce.
Nike first began reporting its environmental and social performance in . Its work to embed and scale sustainable innovation across the company and its contract supply chain were recently examined in case studies through Harvard Business School and Stanford Graduate School of Business. Today&#;s report is Nike&#;s sixth and was informed by feedback from a panel of external reviewers with broad expertise, including representatives from nongovernmental organizations and academia to business, open data and consumer advocates.
One product that I know I cannot live without are my Nike running shoes. I wear mine almost every day because of how good they feel on my feet. My Nikes are light, comfortable, stylish and&#; mostly synthetic. The design of my shoes got me thinking what all went in to making them, like what materials were used, where they came from and how they are impacting the environment every time I take a step in them.
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Realistically, the life cycle for my Nikes shoes is about two or two and a half years. This got me thinking what happens to my shoes whenever I quit wearing them, since I don&#;t want them to end up in landfill to rot away. Nike has used the same thought process and began recycling materials, like rubber, form their old shoes and incorporating it into their new shoes. This recycling has helped Nike become more sustainable by not only reusing parts of old products, but also cutting down on the extraction process of raw materials.
Environmentally, Nike has very lofty goals for sustainable production processes and materials. Their goal for is to double their productivity while also cutting their environmental impact in half. This might sound impossible, but Nike is taking steps in the right direction to get there. One of the main sustainability goals of Nike is to cut their carbon footprint which is most affected by the production process of their shoes. They are doing this by leading multiple green initiatives to offset their carbon emissions from their factories. They also hope to use renewable energy in all their factories worldwide by , as well as cut back on the number of existing factories they already have. Nike also hopes to extract their resources more sustainably. One way they are doing this is with their leather extraction process, where they refuse to obtain leather form the Amazon biome. Also, all their tanneries they obtain their leather from are certified by the Leather Working Group for sustainability, and 80% of their tanneries have the &#;gold standard&#; for leather.
One negative social impact that is a sad reality for nearly every shoe company is outsourcing the manufacturing process to other countries where there are little or no child labor laws. This is clear for Nike since most of their factories are in third world Asian countries like China, Vietnam, and Indonesia. For example, 23% of Nike&#;s shoe factories are in China, which dwarfs the number of factories in the United States which is 48 total, and that makes up 8% of Nike&#;s total factories. The factories in these third world countries are subject to Nike&#;s code of conduct for working conditions which hold factories to high standards in terms of working conditions and pay. However, Nike has faced numerous violations over the years since they have factories worldwide.
Overall, Nike shoes have a heavy impact on the environment, from leather, to carbon emission, and poor working conditions for factory workers. However, Nike has seen what they are doing, and have begun to right the ship. They have taken initiatives to make their factories more eco-efficient, extract their raw materials more sustainably, and improve the working conditions in factories all across the globe.
http://www.ethicalconsumer.org/companystories.aspx?CompanyId=&CategoryId=
https://www.unc.edu/~andrewsr/ints092/vandu.html
http://www.oregonlive.com/business/index.ssf//05/nike_adopts_ambitious_environm.html
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