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Nike Raises its Sustainability Game, Sets New Supply Chain Goals for 2020

Nike, the one-time poster child for bad corporate behavior, is now a leader in the realm of social responsibility.

According to the company’s latest sustainable business report, released Wednesday, it reduced carbon emissions by 18 percent per unit in fiscal 2015—a period during which more than a billion items were shipped—and increased water efficiency by double digits in apparel materials dyeing and finishing and footwear manufacturing.

Notably, it worked with fewer contract factories—86 percent of which achieved at least a bronze rating on the Nike Sustainable Manufacturing & Sourcing Index—and designed products that delivered performance with a lower environmental impact. How low? Ninety-eight percent of new footwear scored silver or better on its product sustainability indices, while 80 percent of new apparel scored bronze or better, and the use of environmentally preferred materials increased overall.

Indeed, the Beaverton, Oregon-based active apparel and footwear giant has come a long way from its scandal-packed days of sweatshop manufacturing, but it knows its business model is still far from perfect.

To that end, Nike has set itself three new aims that it’s hoping to hit for fiscal 2020: minimize its environmental footprint, transform its manufacturing and unleash human potential.

“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,” Mark Parker, president and chief executive officer of Nike, said. “Today our teams are advancing ambitious new business models and partnerships that can scale unprecedented change across our business and the industry.”

Hannah Jones, chief sustainability officer and vice president of the company’s so-called innovation accelerator, continued, “We’ve set a moonshot challenge to double our business with half the impact. 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.”

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Minimize environmental footprint

Nike plans to shrink its footprint throughout the product lifecycle, from carbon and energy to chemistry, water and waste. Its mission: use less, use better, innovate and, where possible, close the loop and reuse. The company said about 60 percent of the environmental impact in a pair of its shoes is embedded in the materials used. That’s why it’s investing in creating a new palette of sustainable materials in a move toward closed-loop products. In fact, it’s already started: 71 percent of the company’s footwear and apparel products currently incorporate recycled materials in everything from trims to Flyknit yarns.

Transform manufacturing

In order to deliver new product innovation to consumers, Nike said it’s focused on creating technology-driven manufacturing through fewer and better factories that place highly skilled workers at the center. The company is also running pilot research programs for healthcare, education and finance networks to make positive changes inside and outside the workplace.

Unleash human potential

On the recruitment and promotion front, Nike said it intends to expand representation of women and people of color, while continuing to increase diversity of all dimensions across its business long term. It will also introduce a new “family care” benefit in the U.S. that will provide new mothers and fathers, as well as employees caring for sick family members, with an additional eight weeks paid time off.

To meet these goals, Nike has set new targets for fiscal 2020 for its entire supply chain:
• to have zero waste from contracted footwear manufacturing sent to landfill or incineration without energy recovery
• to source 100 percent of products from contract factories meeting the company’s definition of sustainable
• to create products that deliver maximum performance with minimum impact
• to reach 100 percent renewable energy in owned or operated facilities by the end of fiscal 2025 and to encourage broader adoption of renewable energy as part of an effort to control absolute emissions

“It’s a challenge we are setting for ourselves, our collaborators and our partners as we move toward a circular economy future,” Jones said.

To read the full sustainable business report, visit nike.com.