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Nike Leaves Lighter Carbon Footprint, Sources From Fewer Factories

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Nike Inc. is making strides in sustainability with both its products and processes as it redefines growth to preserve the earth’s constrained resources.

The company released its latest Sustainable Business Performance Summary for FY12/13 Wednesday, outlining its progress against previous targets mentioned in the FY10/11 report. Nike has reduced its energy use, water consumption, waste generation and greenhouse gas (GHG) emissions.

“Our strategy to create value while pursuing innovation that reduces our impact on the environment is delivering measurable results,” Nike president and CEO Mark Parker said. “The natural assumption is that as revenue goes up so does a company’s greenhouse gas emissions as more sales translates to increased product manufacturing and freight activity. However through a variety of initiatives we have been able to change the results of that equation, reducing absolute greenhouse gas emissions by close to 3 percent while simultaneously increasing revenues by 26 percent over the time period covered by this report.”

Nike has made progress toward its CO2-reduction goal to cut emissions by 20 percent from FY11 to FY15, having reduced emissions by 13 percent at the end of FY13. The company succeeded in its goal of slashing water use by 15 percent, surpassing that in terms of footwear, as factories used 23 percent less water in shoe production and were able to reduce water use for apparel by 10 percent. The retailer also set out to achieve 10 percent reduction in waste from finished goods manufacturing and in shoebox weight per unit between FY11 through FY15, and has so far seen an 8.6% reduction in footwear waste and a 3 percent reduction in shoebox waste.

Nike is working to create a leaner supply chain, sourcing from fewer, better factories. The company reduced the factories it sources from to 785 in FY13, down nearly 14 percent from 910 in FY12.

Factories are now assessed for performance and sustainability, labor, health, safety and environmental compliance to determine whether they are up to par. According to the report, 94 percent of Nike’s factories went through a full assessment of these factors, and recorded violations, like excessive overtime and issues over wages were down to 16 percent from 29 percent in FY12, due partially to the company’s decision to reduce its contract factory base.

In terms of innovation, Nike has been working to uncover entirely new materials and ways to make products, and the company’s Flyknit technology is one such example.

Nike launched the Flyknit Lunar 1+ running shoe in 2013, and the product reduces footwear waste in the upper by 80 percent on average, compared with traditional production methods. To put that amount of waste into perspective, the total combined material savings from just the Lunar 1+ uppers compared to a traditional running shoe was 66,000kg — about the same as 12 adult male African elephants, according to the report.

“The Flyknit Racer’s laces are 30% recycled polyester, the upper is colored with water-based inks, and the sock liner is made from recycled materials. We also use 100% water-based adhesives in the midsole and outsole to reduce the use of volatile organic compounds,” the report noted.

Nike has made continued efforts to incorporate more sustainable materials in its products. “The materials we choose have impacts that ripple across every stage of the value chain,” the company noted. “The approximately 900 million units produced annually through our supply chain are made from more than 16,000 materials selected from more than 1,500 different vendors, chosen from a staggering 80,000 material options.”

The production of these materials — from growing cotton and harvesting rubber, to raising livestock for leather and extracting oil for polyester — Nike noted, accounts for 21 percent of the total energy use throughout the value chain, 73 percent of the water consumption and 33 percent of the greenhouse gas emissions. When you add materials processing to the mix, like dyeing and finishing, those percentages jump to 54 percent of total energy use, 83 percent of water consumption and 56 percent of GHG emissions. “These types of insights are valuable as we develop and evolve our programs moving forward,” Nike noted.

To combat excess consumption, Nike invested in DyeCoo Textile Systems B.V., a Netherlands-based company that developed the first commercially available waterless textile dyeing machines.

“In 2013, we worked with Far Eastern New Century Corp. and DyeCoo to launch the ‘dye house of the future’ in Taiwan to optimize the dyeing process. This new process, which we call ColorDry, provides the most consistent color results to date and eliminates water and process chemicals from the dyeing process,” according to the report.

Nike also partnered with Bluesign Technologies to open its chemical formulation database, allowing access to 30,000 eco-friendly materials. Bluesign audits water, energy and chemical usage of its supply-chain partners and helps set and control standards for environmentally friendly and safe production.

“The world in which athletes and companies compete is changing fast. We believe business has a critical role to play in meeting the challenges of a changing world — addressing climate change, preserving the earth’s constrained resources, enhancing global economic opportunity — not by reducing growth but by redefining it. To do this we believe businesses must embrace sustainability as an innovation opportunity and governments should act to create the right policies and incentives to accelerate change at scale,” according to Parker.

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