Eco-Intelligence: Nike Transforms the Textile Industry

Eco-Intelligence: Nike Transforms the Textile Industry

How does a company with annual revenues in the billions and more than 700 contract factories worldwide profitably integrate ecology and social equity into the way it does business, every day and at every level of operation? Ask Nike. By William Mcdonough and Michael Braungart

Ever since Nike co-founder Bill Bowerman used a waffle iron to cook up a new sole for a pair of running shoes more than 25 years ago, innovation has been Nike’s bread, butter and glory, the not-very-well-kept secret of the company’s enduring success.

Bowerman’s waffle sole revolutionized the athletic shoe, bringing energy, creativity and new technology to a field that had been running in place for years. Suddenly, runners everywhere were trading in their worn-out flats for fast, light-as-air Nikes. First out of the blocks, Nike never looked back. Several years after the premier of the waffle sole came the famed “Air” cushioning system. Initially introduced in running shoes, it stormed the basketball shoe market on the wings of Michael Jordan and became a standard of both high performance and street fashion.

Now Nike is applying its innovative spirit to a new standard of performance. In the early 1990s, when Air Jordans were all the rage, a small group of Nike’s designers and managers were quietly exploring the idea of sustainable development. Centered in the Nike Environmental Action Team (NEAT), this cadre of pioneers began to study Nike’s operations through the emerging lens of sustainability, asking questions that would ultimately transform the company’s understanding of itself and its mission. What, they wondered, are the long-term environmental and social impacts of the athletic footwear industry? How does a company with annual revenues in the billions (over $9 billion in 2001) and more than 700 contract factories worldwide profitably integrate ecology and social equity into the way it does business, every day and at every level of operation?

Inspiration and Ecological Intelligence

Sarah Severn, Nike’s director of corporate sustainable development, led NEAT in its early years. Working closely with Heidi McCloskey, currently global sustainability director for apparel, Severn sifted through emerging theories of sustainability and was drawn to the concepts that we have come to call cradle-to-cradle thinking.

Rather than trying to limit the impact of industry through the management of harmful emissions, cradle-to-cradle thinking posits that intelligent design can eliminate the concept of waste, resolving the conflict between nature and commerce. By modeling industrial systems on nature’s nutrient flows, designers can create highly productive facilities that have positive effects on their surroundings, and completely healthful products that are either returned to the soil or flow back to industry forever. It’s a life-affirming strategy that celebrates human creativity and the abundance of nature—a perfect fit with Nike’s positive, innovative culture.

This was key for Severn. “So much of the environmental debate had addressed end-of-pipe problems and end-of-pipe solutions,” she said. “Here was a strategy that was turning that on its head. It was not about restriction or reaction. It created positive solutions at the front of the design process. That meshes very well with the culture here. And it’s an exciting message. If you talk about environmental management systems and eco-efficiency, people just roll their eyes. But if you talk about innovation and abundance, it’s inspirational. People get very, very excited.”

And get excited they did. Severn and McCloskey began to feel that design for sustainability offered a compelling path to a new level of performance for Nike. Their enthusiasm was contagious. In 1996, just three years after the formation of NEAT, Nike contracted William McDonough + Partners to design a new, state-of-the-art campus for its European headquarters in The Netherlands. A complex of five new buildings, the campus was designed to integrate the indoors with the surrounding environment, tapping into local energy flows to create healthy, beneficial relationships between nature and human culture.

The buildings are organized around a central green and form four smaller courtyards around the perimeter, each landscaped with native plants. The orientation of the buildings and the window design maximize daylight while minimizing heat gain. Ground-source heat pumps use the constant temperature of the earth for heating and cooling. On the roofs, cisterns collect 3.9 million liters of storm water annually for landscape irrigation and other greywater uses. Outdoors there are volleyball, basketball and tennis courts; indoors, a bistro and restaurant, sunlight and copious fresh air. In short, it’s an exceptionally pleasant place to work, to connect with colleagues and friends, to come to know the surrounding natural world—to find inspiration.

Yet, as inspiring as Nike’s European headquarters can be, the company soon understood that even the best facilities in the world would not change the design of their products. Could Nike integrate cradle-to-cradle thinking into product design, manufacturing and customer connections, too?

Change and Integration

In the Nike culture, people tend not to flinch at the prospect of change. Like the elite athletes they serve, Nike’s leaders are more likely to embrace a challenge and set new standards than look for easy excuses or piecemeal improvements. Sparks of inspiration flying up from new ideas about sustainable business had to be translated into action and innovation across the board, into long-term strategies, new common goals and novel ways of measuring success. Nike was changing yet again.

“We had come to see that our customers’ health and our own ability to compete are inseparable from the health of the environment,” said Darcy Winslow, one of the early leaders of the sustainability movement within the company. Product innovation and performance remained Nike’s first priority, she said, “but our sense of design excellence had expanded to include a commitment to ecological intelligence, to fully understanding the impacts of our products on the natural world.”

Nike’s first steps toward ecologically intelligent product design began with materials assessments undertaken with McDonough Braungart Design Chemistry (MBDC). Together they sought to determine the chemical composition and environmental effects of the materials and manufacturing processes used to produce Nike’s line of athletic shoes. Focusing primarily on Nike’s global footwear operations, the process began with factory visits in China, where teams collected samples of rubber, leather, nylon, polyester and foams to begin assessing their chemistry.

In this ongoing partnership, when Nike and MBDC identify materials that meet or exceed the company’s emerging criteria for sustainable design, those components are added to a growing palette of materials that Nike will increasingly use in its products. These “Positive List” ingredients are those designed to either be metabolized by nature’s biological systems at the end of a product’s useful life or be perpetually recovered and reutilized for new products. We call the former biological nutrients and the latter technical nutrients. Using natural flows of energy and nutrients as models, these product materials are designed to flow in closed loop cycles, eliminating the concept of waste while enhancing and replenishing both nature and commerce. Biological and technical nutrients, and the systems in which they flow, are the foundation of our concept of Cradle to Cradle DesignSM.

Ultimately, Nike is working toward a cradle-to-cradle manufacturing and product life cycle system. A two-phase collaborative effort between MBDC and Nike, launched in 2000, is already setting new design guidelines and auditing all of the company’s major material suppliers. Since 2001, research has focused on the chemicals used in the manufacturing process and the development of a list of materials that will comprise a positively defined materials palette.

“Our goal,” said Winslow, “is to take responsibility for our product through its entire life cycle.” To do so, Nike has begun to “align the life cycles of all its footwear, apparel, equipment and accessories as closely as possible with natural cycles.” When that goal is reached, Nike and MBDC will have identified a palette of chemicals and materials with wholly positive effects and designed systems for their perpetual retrieval and re-use. Products will then flow in discrete biological and technical cycles, nourishing the soil or circulating as high quality technical nutrients from producer to customer and back again.

Sound ambitious? It is. But, as we have seen, innovation is what Nike is all about. And the company’s publicly-stated corporate goals strongly suggest it means business. By 2020 Nike aims to:

  • Eliminate the concept of waste in product design, using materials, energy and resources that can be readily recycled, renewed or reabsorbed back into nature.
  • Eliminate all substances that are known or suspected to be harmful to human health or the health of natural systems.
  • Close the loop and take full responsibility for its products at all stages of product and process life cycle, including the end of a product’s useful life when consumers are likely to dispose of it.
  • Develop financial structures that promote greater product stewardship in design, engineering and manufacturing, as well as create new financial models to reflect the full cost of doing business.

  • New Directions

    Many Nike leaders are energetically pursuing this new direction. As Ed Thomas, director of advanced materials research, said with typical Nike exuberance: “You’ve got to take the stake and you’ve got to plant it somewhere big and you’ve got to say that’s what we’re driving for. It’s not just going more slowly. It’s not just going to zero. It’s actually turning around and picking a new direction.”

    Nike has responded to this self-imposed challenge with a series of far-reaching initiatives aimed at integrating principles of sustaining design into all its day-to-day operations. While ongoing learning programs usher sustainability into Nike culture, the company is also reaching out to its partners—from suppliers to factories to distributors—to develop “a driver of continual improvement” and “a common understanding of the goals of sustainability.”

    With its Management of Environmental Safety and Health program, for example, Nike has merged health and safety metrics with a Nike management model to create a framework for sustainability suitable for its Asian contract factories. Through a series of training workshops, Nike is helping factory managers and employees in four countries learn how to employ sustainable work practices and eliminate the problematic impacts of manufacturing athletic shoes and apparel.

    What has all this training added up to? It is difficult to measure the impact of a cultural shift within a company, and harder still to measure the impact of such a shift on a company’s supply chain. But Nike’s systematic effort to develop a positive materials palette has begun to produce tangible results, such as the phasing out of polyvinyl chloride (PVC).

    PVC, commonly known as vinyl, is a cheap, durable material widely used in building construction and a variety of consumer products, including toys, apparel and sporting goods. As Nike’s Web site explains, the vinyl chloride monomer used to make PVC is a suspected carcinogen, while incineration of PVC can result in dioxin emissions. MBDC is also very concerned about the many problematic additives commonly used in PVC.

    After two years of scientific review, Nike set its sites on the elimination of PVC from footwear and non-screenprint apparel by the end of 2002. In spring 2002 Nike highlighted two of the company’s PVC-free products, Keystone Cleats and Swoosh Slides, as a way to begin a dialogue with consumers about its PVC-free commitment.

    Another example of positive materials development at Nike is its increasing use of organic cotton in its apparel products. By 2010 Nike plans to use a minimum of five percent organically-grown cotton in all cotton apparel and will introduce its first collection to incorporate 100 percent organically grown cotton this fall.

    A key element of the cotton program is the positive perspective that drives it. “When we looked at what type of beneficial impact we could have on the environment,” says McCloskey, “organic cotton was a key area.”

    Unlike many apparel companies, Nike is aware that nine of the most toxic pesticides are used on cotton, producing a huge amount of groundwater contamination and community pollution. From a responsible business perspective, those are costs no company would want to bear.

    “By taking responsibility for the chemicals and materials that make up Nike’s products and designing out the things that have long-term cost to people’s health and the environment, we’re in a much better business position,” McCloskey says. In the case of agricultural products like cotton, designing in positively defined cotton fiber is, in effect, designing out toxic characteristics and larger negative impacts. For example, by 2000, Nike was purchasing nearly one million pounds of cotton annually from organic farmers. This positive alternative to managing the use of toxic pesticides helps build a safe, new industry, provides a quality product to customers, and creates a new niche market for Nike.

    Ongoing Challenges

    As promising as all these changes are there is still much work to do. While the integration of sustainable design principles continues at a remarkable pace, sustainability has yet to truly find a home in the minds of all of Nike’s designers. “The task of taking design concepts that are new and complex and putting them into the repertoire of all the decisions a designer has to make in a hectic environment is extremely challenging,” said Bill Malloch, general manager of footwear sustainability.

    “Nike’s in-line designers understand the concepts of sustainability, but they don’t necessarily know how to apply them today,” he explained. “We hope, in the next couple of years, that we will be able to simplify sustainability into core ideas that allow designers to consistently make the right decisions.”

    There are also the challenges surrounding the management of more than 700 contract factories worldwide. No one is quite certain how to guarantee that every producer is using materials selected from Nike’s preferred palette. The story of Keystone Cleats and Swoosh Slides, however, suggests that successfully monitoring product materials is certainly within reach, and could well lead to a deep and profitable understanding of Nike’s vast supply and manufacturing network.

    Managing materials presents some of the same logistical challenges Nike is facing in its management of labor practices in the factories of its suppliers. These efforts can go hand in hand; as Nike implements its palette of positively defined, healthful materials it creates healthier workplaces and communities.

    Though questions abound, we have no doubt that Nike can reach its ambitious goals. It has already shown, time and time again, its ability to turn inspiration into fruitful action. It will do the same as it takes on each new challenge on the path to sustainability. As Nike vice president Tinker Hatfield said, the company’s discovery of the concepts of sustainable design “woke up this sleeping giant.”

    “It is a wonderful thing,” he said, “for us to take this aggressive, ambitious, powerful group of people . . . and just change that basic level of expectation to a better place.”

    We agree. And whether the once-sleeping giant is now striding along in Swoosh Slides, Air Jordans or organic cotton socks, we’ve been delighted to see it rise to its feet.

    William A. McDonough, FAIA, and Michael Braungart are founders of McDonough Braungart Design Chemistry, a consultancy that works with a wide variety of companies to implement eco-effective design and commerce strategies. For more information, visit