Nike innovates its way to zero toxic discharges

Nike innovates its way to zero toxic discharges

Nike (NYSE: NKE) has a very successful, world-wide, hard-won and decades-old reputation for its athletic shoes, apparel and equipment. As a brand, Nike is often associated with top sports stars, its ubiquitous “swoosh” logo and the infectious “Just Do It” slogan.  

So it isn’t too great a surprise that the Oregon-based retail giant is continuing the tradition of “going big or going home” when it comes to going green, including such bold goals as the elimination of hazardous discharges throughout its supply chain. Nike’s newly released sustainability report highlights how it is pushing innovation in both its products and supply chain. And considering Nike’s global scope, those changes could have a lasting and worldwide impact.

Nike president and CEO Mike Parker points to the constantly morphing and increasingly globalized market that has fueled the need for innovative approaches to better business performance. “The age of abundance is over,” he said in the report’s introduction. “We cannot achieve our bold goals for sustainability simply by delivering incremental improvements.”

The report talks of creating a sustainable supply chain across all Nike brands that is "lean, green, equitable and empowered. We expect this transformation to benefit our business as well as hundreds of thousands of workers worldwide."

Nike’s sustainability strategy is driven by the need to adapt to rapidly changing operating environments. Here are some of the issues the company expects will affect its future business landscape:

  • Competition for natural resources: The increasing scarcity of natural resources “affects the cost and availability of the inputs needed to make our products,” the report said, “and in turn, the price and availability of the products themselves”
  • Rising energy costs and greenhouse gas emissions: Both factors, Nike says, are pressuring traditional methods of product manufacturing and transportation
  • Global disparities: Major differences in financial access and other opportunities “influence workers throughout our supply chain”
  • Changing demographics: Ongoing urbanization and the emergence of new middle class populations in developing countries “create new demands for products and services, and new opportunities to meet them”
  • A new regulatory landscape: “Emerging regulations related to materials use, labor practices and other issues,” the company notes, “continue to shape our business environment”

Nike sees successful innovation as a way to increase sustainability. As examples it points to 2010 World Cup jerseys the company made from recycled plastic bottles, a color dyeing process that uses carbon dioxide instead of water and a knitting device that reduces waste in the production of shoe parts.

The company also has some tangible sustainability goals it hopes to achieve: an overall 20 percent reduction on CO2 emissions from FY 2011 levels through FY 2015, zero discharge of hazardous chemicals throughout its supply chain by 2020 and a 10 percent cut in manufacturing waste companwide by FY 2015 (compared to the FY 2011 baseline). “We believe that we need strong energy and climate policies to protect our supply chains and ensure market certainty,” the report said, “as well as to help create jobs, level the playing field among businesses, enhance economic development and ensure our global competitiveness as we move into the future.”

In addition, the retailer has created a Sustainable Business and Innovation Lab and the Nike Materials Sustainability Index (MSI), a tool to help design materials and products with reduced environmental impact. “One major improvement in the Nike MSI,” the report said, “is that it rates material vendors in addition to materials themselves, providing strong incentives for the vendors to become more environmentally sustainable.”

In a nod to previous problems over conditions in some of its vendors’ factories, Nike has also implemented a companywide Code of Conduct that covers working conditions as well as health, safety and environmental performance.

And transparency and collaboration can be strategic and competitive advantages. “Nike is a large company by most standards,” CEO Mike Parker said, “but our ability to influence meaningful change at the systemic level has limitations. It is absolutely crucial that we work with other players to prompt real, sustainable system change.”

Given that Nike has more than 35,000 employees across six continents – and directly or indirectly employs nearly a million people – its campaign towards greater sustainability will not go unnoticed.

Photo of Nike store in Beijing by TonyV3112 via Shutterstock