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Nike Inc. released its fiscal 2007 to 2009 Corporate Responsibility (CR) report on January 22, which outlines the next evolution of its CR strategy from a risk management, philanthropic and compliance model to a long-term strategy focused on innovation, collaboration, transparency and advocacy to prepare the company to thrive in a sustainable economy.
The company’s increased focus on Sustainable Business and Innovation (SB&I) will be more seamlessly integrated across Nike’s business strategies, creating a more sustainable approach aimed at providing greater returns to its business, communities, factory workers, consumers and the planet.
The report also details progress on Nike’s five-year CR goals and provides a comprehensive review of its CR efforts over the past three years.
“Sustainability is key to Nike’s growth and innovation,” said Mark Parker, Nike Inc.’s president and CEO. “Making our business more sustainable benefits our consumers who expect products and experiences with low environmental impact, contract factory workers who will gain from more sustainable manufacturing and our employees and shareholders who will be rewarded by a company that is prepared for the future.”
Recognizing the impacts of declining natural resources and the need to move to a low-carbon economy, Nike also uses the report to share its vision of reaching a closed-loop business model where the goal is to achieve zero waste in the supply chain and have products and materials that can be continuously reused – no pre- or post-consumer waste. This vision is designed to drive innovative and sustainable business processes and models.
“The link between sustainability and Nike as a growth company has never been clearer,” said Hannah Jones, Vice President, SB&I. “There are serious potential impacts of social, environmental and economic shifts on labor forces, youth sport, supply chains and products. This gives Nike the opportunity to use our power of innovation and our commitment to transparency and collaboration to tackle these complex issues.”
The report announces progress against Nike’s five-year targets set in 2007. The company has made sound progress on many fronts, such as implementing Lean and Human Resource Management training in contract factories and reducing waste and toxics and increasing its use of environmentally preferred materials throughout Considered Design performance products.
The report also details where progress against other goals remains more challenging, such as managing overtime in contract factories. Nike has also revised or clarified targets in a few instances due to a better understanding of the complexities of the issue or a change in strategy.
The CR report outlines some important initiatives for the company including:
1. Considered Design
Considered Design combines sustainability principles and innovative performance products for athletes by reducing or eliminating toxics and waste and increasing the use of environmentally preferred materials.
2. GreenXchange (GX)
GX is a web-based marketplace designed to share intellectual property which can lead to new sustainability business models and innovation. It is a system for capturing, sharing and licensing patents that, when used by someone else, could lead to unlimited innovation in helping solve current obstacles to sustainability issues. By making private intellectual property visible and usable, the aim is to accelerate the development of green innovation.
3. Lean and Human Resource Management (HRM)
Nike has been working with contract factories to train them in the implementation of specialized Lean manufacturing and HRM. Lean principles put the decision making closer to the worker through skill building, teamwork and understanding quality over quantity. HRM builds the factory’s managerial capacity and helps them value an empowered workforce. While only one aspect of Nike’s work with contract factories, it is an important pillar of Nike’s strategy to build a more lean, green, empowered and equitable supply chain.
4. Sport for Social Change
Nike has furthered its strategy of using sport as a powerful movement for social change. Sport is undervalued for its capacity to build networks of social entrepreneurs and community innovators and for its ability to drive positive social, economic and cultural change. One powerful example of a program Nike partners with is Grassroot Soccer in Africa. It is a community program which is directly addressing a dire social need through raising awareness and education of HIV/AIDS by enabling young people to make informed decisions, using sport as a catalyst to engage and communicate to boys and girls.
5. Energy and Climate Change Strategy
In 2009, Nike instigated the formation of new coalition of consumer companies called Business for Innovative Climate and Energy Policy (BICEP), which is advocating for strong U.S. climate and energy legislation with the aim of creating a level playing field through a cost on carbon and unlocking innovation that is essential to creating technology and infrastructure solutions. Nike aims to be ahead of the curve of mandatory regulation, energy price increases and volatility and consumer pressure.
In addition, in 2008, Nike launched a footwear energy efficiency program with five contract manufacturers. Nike’s commitment to collaboration on this project has shown excellent early results: the contract factories’ absolute CO2 footprint was down 6 percent despite a 9 percent increase in production.
Nike’s corporate responsibility report, available online at Nikeresponsibility.com, provides greater detail on progress against targets and provides a comprehensive review of the company’s efforts for fiscal years 2007, 2008 and 2009.