Nike Inc. released its latest “Sustainable Business Report” on Wednesday detailing strong progress for the company’s environmental and social targets, and setting a vision for a low-carbon, closed-loop future as part of the activewear giant’s growth strategy.
Nike has set key targets for improving its environmental impact and its entire supply chain by 2020.
The company aims to have zero waste from contracted footwear manufacturing sent to landfill or incineration and to source 100 percent of products from contract factories meeting the company’s definition of sustainable.
Nike wants to create products that deliver maximum performance with minimum impact, seeking a 10 percent reduction in the average environmental footprint and an increased use of more sustainable materials overall.
By the end of 2025, Nike wants to reach 100 percent renewable energy in owned or operated facilities and to encourage broader adoption of renewable energy as part of an effort to control absolute emissions.
Nike said it believes these efforts will deliver on its long-term strategy to leverage sustainable innovation as a powerful engine for growth and catalyst for change.
“At Nike, we believe it is not enough to adapt to what the future may bring, we’re creating the future we want to see through sustainable innovation,” said Nike president and chief executive officer Mark Parker. “Today our teams are advancing ambitious new business models and partnerships that can scale unprecedented change across our business and the industry.”
The report highlights how Nike has embedded sustainability across its business and signals its continued commitment to set aggressive sustainability targets and invest in disruptive innovation, all aimed at driving company growth, delivering performance innovation for athletes and acting as a catalyst for global change.
“We’ve set a moonshot challenge to double our business with half the impact,” said Hannah Jones, Nike’s chief sustainability officer and vice president of its Innovation Accelerator. “It’s a bold ambition that’s going to take much more than incremental efficiency. It’s going to take innovation on a scale we’ve never seen before. It’s a challenge we are setting for ourselves, our collaborators and our partners as we move toward a circular economy future.”
In the third quarter ended Feb. 29, Nike reported earnings had increased 20 percent to $950 million, as revenues were up 8 percent to $8.03 billion from $7.46 billion.
The Beaverton, Ore.-based company shared strong progress toward its fiscal 2015 goals, including reduced carbon emissions during a period of continued growth, shipping more than one billion units, while carbon emissions decreased 18 percent per unit.
Nike said it delivered substantial water reductions, increasing water efficiency 18 percent a unit in apparel material dyeing and finishing, and 43 percent a unit in footwear manufacturing.
Nike worked with fewer, better contract factories, with 86 percent of contract factories demonstrating an investment in workers by achieving a minimum bronze rating on the Nike Sustainable Manufacturing & Sourcing Index, making progress toward 100 percent by 2020.
The company said it improved product sustainability by designing products that provide superior performance with a lower environmental impact — 98 percent of new footwear scored silver or better on its product sustainability indices and 80 percent of new apparel scored bronze or better.
In addition, contract footwear factories diverted 92 percent of footwear factory waste from landfill or incineration in the year.
As the next step, Nike has set three strategic aims — minimize its environmental footprint, transform its manufacturing and unleash human potential.
Nike aims to minimize its environmental footprint throughout the product life cycle, looking at carbon and energy, chemistry, water and waste to identify strategies to use less, use better, innovate new solutions and where possible, close the production loop and reuse.
The company’s ColorDry technology, which dyes fabric using zero water, has saved more than 20 million liters of water, and its Reuse-A-Shoe program has recycled approximately 30 million pairs of shoes.
Nike is investing in creating a new palette of sustainable materials in a move toward closed-loop products and has already incorporated recycled materials into 71 percent of its footwear and apparel products, in everything from apparel trims to soccer kits to Flyknit yarns.
Since 2012, Flyknit technology has reduced nearly three-and-a-half million pounds of waste, Nike noted. Since 2010, more than three billion plastic bottles have been diverted from landfills and converted into recycled polyester for Nike performance products.
Nike’s Manufacturing Revolution initiative is transforming what products Nike makes and how it makes them through technology, labor and sustainable innovation. In order to deliver new product innovation to consumers, Nike said it is focused on creating technology-driven manufacturing through more sustainable factories that place highly skilled, engaged and valued workers at the center.
Nike said its is working with fewer, better contract factories that are committed to taking this goal. The company is also running pilot research programs dedicated to engaging and connecting workers to health care, education and finance networks to make positive changes inside and outside the workplace.
Guided by the belief that “diversity fosters creativity and accelerates innovation,” Nike said it’s strengthening its recruitment, promotion and retention of diverse talent throughout the world with the goal of reflecting the diversity of the consumers it serves and the communities where its employees live and work. Nike will accelerate its efforts by expanding representation of women and people of color to start, while continuing to increase diversity of all dimensions across its business.
The company is also introducing a new Family Care benefit in the U.S. that will support all new parents, as well as employees caring for sick family members. Now mothers and fathers will receive an additional eight weeks paid time off and employees who need to care for family members also receive eight weeks paid time off.
On the field of play, Nike is serving the next generation of athletes by raising awareness of the physical inactivity epidemic and working with others to get children more active. For example, Nike’s engagement with Let’s Move Active Schools in the U.S. has reached more than 10 million children since 2013.