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What Nike’s Newest Impact Report Says About Waste, Wins and What’s Ahead

Along with gender and wage parity in its contract factories and retail stores, and encouraging its suppliers to follow its example, Nike reported its progress on how it’s managing waste, material innovation, and recycling, and reducing greenhouse gas emissions.

In the FY22 Impact Report it issued last week, the athleticwear company lays out how it is meeting and sometimes surpassing the goals it set forth in 2005 in the first of its five-year purpose targets.

Fifty years after Title IX brought so many women and girls to sports fields and courts around the globe, Nike reports that 51 percent of its corporate workforce is women, it has brought almost 400,000 females to local play and sports programs this year alone, and it says has achieved its goals that bring more diversity to its staff and customer base with what it describes as successful inclusion initiatives. The company has been fighting a class-action lawsuit claiming gender discrimination.

It is with sustainability and the environment that Nike says it has made the most progress. According to the Impact Report, some 50 percent of the key materials Nike now uses in the manufacture of clothing and footwear are what it describes as considered environmentally preferred. This means that 0.05 metric tons less of GHG are being released into the atmosphere.

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Cotton, polyester and a blend of the two are Nike’s preferred materials and responsible for most of its carbon footprint. Polyester goes into the making of almost every pair of Nike footwear, and the company now reports being ahead of its plan to incorporate more recycled polyester in its production. When it comes to performance, aesthetics and hand, polyester is far less easily compromised than cotton in the recycling process but notoriously sheds environmentally damaging microplastics.

Last year, Nike’s use of recycled polyester in apparel jumped by only 10 percent, compared to a jump of 38% the year before. Much of that increase is due to the conversion of popular garments like the Legend Tee and Club Fleece to recycled polyester.

The use of recycled polyester in footwear jumped markedly. At the end of last year it accounted for 45 percent of Nike footwear’s total polyester usage, compared with 28 percent in 2021. The report attributes this to a focus on the kind of foundational polyester based materials that cut across the product line, such as laces, linings and reinforcements. There is also a focus on converting textiles and yarns to recycled polyester in many of the volume drivers in the range. Nike is researching closed-loop versions like feedstock, chemically recycled and bio-based iterations to clean up its polyester footprint.

Nike lags a bit on its goals for using recycled cotton, but it is on track for its organic cotton part of the business. Currently Nike says it’s among the top users of organic cotton globally, thanks in part to a 10 percent blending program across most of the cotton materials. The company has big expansion plans for this program in FY24.

Recycled rubber is getting an overhaul, too, in order to reduce how much the company uses. This will be accomplished by moving to formulations that have a high percentage of recycled material while adding other materials that can replicate the performance of rubber but at a lower impact. By 2025 the company hopes to have the footwear line made up of 10 percent recycled rubber.

The goal for Converse Grind will also be 10 percent recycled rubber by 2025. Using the Grind process, it can incorporate between 22 percent and 40 percent reclaimed/reused rubber scraps from the manufacturing process and plans to do so across additional product lines.

Leather models like Air Jordan 1, Blazer and Court Vision outpace the growth of all of Nike footwear, but leather produces the highest rate of carbon emissions and creates the most waste across the apparel and footwear sectors. Nike is seeking leather alternatives from non-animal sources and has started stepping away from kangaroo leather, which it will eliminate from production this year. The company requires 100 percent of its leather suppliers to be members of the Leather Working Group, which monitors standards in the industry.

Waste in the manufacturing process continues to be an important concern. Some 82 percent of finished goods manufacturing waste is from footwear, with 60 percent of that coming from making the uppers and 40 percent from making the midsole and outsole. To reduce some of this waste, Nike plans to optimize the parts that are cut out of the upper materials by maximizing the use of leather hides, sheets of textile, synthetic leather and other materials.

Defects in the midsole and outsole are also large generators of waste but last year it was reduced by 45 percent and prevented 2.5 million kilograms of waste.

In apparel, patterns can likewise be adjusted to optimize fabric yields, lighter weight materials can be used and packaging can be reduced overall. Corrugated cardboard is the primary waste driver in distribution centers but that is being reimagined into lighter weight units.

Nike is making a company-wide move to implement circular operations that will extend the life of products or reuse of materials. Product channels include Nike Refurbished for consumer sales, the vAn for internal employee sales, and donation and recycling programs. There are product take-back programs like Reuse-a-Shoe and programs for refurbished goods that extend the life of unsellable products like worn returns or flawed products that cannot be restocked. By grading them Like New, Gently Worn or Slightly Imperfect, they can be sold at discounted prices at select Nike Factory, Unite and Community Stores. Items not eligible for Nike Refurbished can still get a second life through donation consolidators.Truly unusable product goes to Nike Grind for materials which are then sold to third parties for different uses.

Nike Refurbished footwear debuted in select U.S. stores in March 2021; by the end of FY22, the resale program was in 35 stores and Nike plans to expand even further in FY23.