Nike

Challenge the organization to set outrageous goals, in the long run these will be more motivating. Hence the reason we have seen goals like zero waste and zero toxics emerge out of the product groups. They understand the value of setting the bar high.
Sarah Severn,
Director, Sustainable Development
Services

  • We helped design and deliver Nike’s pioneering global Sustainability Initiative, a nine-month program to identify, train and support approximately 100 sustainability innovators and change agents from across the Nike worldwide system. Through this initiative, Nike developed sustainability-inspired product and process innovations that have achieved positive bottom-line results and inspired the creativity of designers around the world.
  • We collaborated with Nike to create a CD-based sustainability learning and presentation tool to enhance the effectiveness of Nike’s sustainability innovators and change agents in the field.
  • We conducted an internal program evaluation for the Sustainability Initiative and provided input into the design and implementation of Nike’s on-going sustainability integration programs and processes.

Reports from the field

To most of its employees, Nike is more a state of mind than it is a place of work. Born out of innovation and irreverence for the status quo, Nike remains a mindscape as much as it has become a part of the landscape of global commerce. To its legions of fans and customers, Nike is more than just a company; it is a cultural icon and creative engine dedicated to the triumph of the athlete and a celebration of the human spirit. To its activist critics, Nike has come to symbolize the many failings and deficiencies of an inequitable global market system. In attempting to understand Nike and its step-by-step movement through increasing corporate responsibility toward sustainability, we are thrown directly into the startling disparities and paradoxical nature of global society and market capitalism in the early 21st century.

So it should not come as a great surprise that difficult and soul-searching questions are being posed internally by more and more Nike employees about all aspects of the company’s business—from product concept, to research, design, development, manufacturing, shipping and retailing. "How do you create a superior athletic product, then profitably manufacture it, distribute it, and eventually reclaim it, so that no damage occurs whatsoever to our world playground? And how do you do the right thing for everyone involved with our products at every stage of the process?" asks Darcy Winslow, the dynamic global head of Women’s Footwear, a billion-dollar component in Nike’s dominant Footwear division, and who, in her prior role, was the first general manager of Footwear Sustainability. "We all love this beautiful blue-green planet so much, so profitably aligning all of the products and processes of a global industrial system to the inherent design of our natural world is an idea whose time has come." With nearly $10 billion in annual revenues, over 22,000 of its own employees, and more than 550,000 persons making Nike products in more than 50 countries, and approximately 750 sub-contracted manufacturing facilities around the world, this is no small thought.

Yet asking paradigm-breaking questions is an inherent part of Nike’s culture and one of the very reasons for its enormous success. Nike has consistently made room for rebels and independent thinkers, perhaps because the co-founders of the company were two such characters. From University of Oregon Coach Bill Bowerman’s cooking rubber waffles on his wife’s waffle iron in search of the perfect running sole, to Phil Knight’s 1960s Stanford MBA thesis on establishing a marketing-based global corporation with all manufacturing overseas, the independent thinker has been essential to Nike’s ongoing growth and development. Today, there is another wave of status quo-busting creativity and innovation swelling within the design studios, research labs and corporate offices of Nike as the company grapples with an undeniable paradox. Nike’s essence is the ascendance and even transcendence of the human spirit through athletics, yet its actual down-to-earth impact calls attention to some of the most challenging social and environmental issues that humanity faces.

This paradox gives rise to internal questioning, which is made more urgent and relevant to the business as watchful critics in activist organizations around the world criticize the labour practices of the contract manufacturers who produce Nike products. These criticisms focus on a range of issues including child labour, wages, health and safety of workers, and workers’ rights — concerns that working people share worldwide. Many of the criticisms are well founded, acknowledged by the company itself, and have become part of the contemporary Nike story.

The paradox that Nike faces, we face as a society because many of the goods and services we acquire to enhance the quality of our lives come to us with social and environmental costs that generally remain invisible to us—and those costs are accumulating. Consumers and producers alike are beginning to wake up to the reality that these goods and services have environmental and social effects in our own backyard as well as the backyards of others. We are becoming more aware of the systemic, as well as the personal, implications of our decisions and actions, and we are beginning to take responsibility for them and demanding that the organizations in which we place our trust and do our business take responsibility as well.

The evolution of corporate responsibility and sustainability in Nike has been driven by internal employee concern and by external stakeholder pressure. Both dynamics were vital factors in moving Nike in a more socially responsible and sustainable direction. In the 1980s, a few Nike employees expressed their concerns about Nike’s environmental impacts. This led to the creation of the Nike Environmental Action Team (NEAT) and ultimately to the early stages of integrating sustainability thinking into product and process design and to incorporating sustainability into the company’s core values. External pressures have pushed Nike to re-examine its values and will continue to help Nike "keep its eyes on the prize."

At the heart of it, however, the dance toward sustainability in Nike has been a grassroots process. It has received the endorsement of senior leadership and their support in the form of financial resources, permission to explore, and the dedication of personnel time to learn the dance, but it is the passion, drive and genius of individuals across the company that brought the process to life and carries it today. Leadership commitment made it possible for more than 100 employees from around the world to participate in an intensive sustainability education process and to bring back what they learned to their functions and business units so they could convert it into meaningful business practice. Leadership in sustainability emerged on all levels of the organization in this process as individual employees and teams of employees began to translate sustainability concepts into design principles and to apply them to internal logistics and operations.

Nike is undertaking sustainability improvements across all areas of its global system, both from a social and an environmental perspective. The company is, in fact, involved in literally thousands of individual initiatives, most of them completely invisible to the consumer, which are designed to improve the quality of life of the people manufacturing Nike’s products and to reduce and eventually eliminate any harm to the natural environment from the production or disposal of Nike products. For example:
  • Bio-Baby, a shoe design for Nike Kids, was created as a direct result of the Sustainability Initiative. The project goal was to design and develop a completely sustainable shoe. It inspired the project team to think differently about how Nike designs and develops footwear for children. The Bio-Baby incorporates life-cycle thinking and seeks to achieve zero waste, zero toxic materials, and a closed loop production design. This project has evolved into more Nike products following the same innovative thinking process.
  • The marathon singlet, first designed for the 2000 Sydney Olympics, marries high performance with elements of sustainability. The project goal was to develop an environmentally friendly state-of-the-art performance running garment for use in the Sydney Olympics and beyond. It has an innovative energy-efficient textile production process, uses post-consumer content from recycled soft drink bottles (one singlet used the material from approximately one and one-half recycled 1.5 liter PET,polyethylene terephthalate, soft drink bottles), eliminates an energy-intensive yarn-spinning stage of production, and uses sonic welding minimizing the need for sewing thread. The garment is made from a single polymer with recyclable potential, and sells at the same or lower price as a comparable product. The fabric has generated a new family of performance fabrics for Nike.
  • Nike is now blending organic cotton into much of its cotton apparel, such as lightweight jersey t-shirts, to reduce the use of pesticides, herbicides and fertilizers in a way that supports the nascent organic cotton industry, and sources the cotton closer to production in order to reduce transportation costs and CO2 emissions. Approximately 90 percent of Nike’s shirts produced domestically now contain an amount of certified organic content and Nike’s organic cotton use in Europe is growing exponentially.
  • The Air Essential III, a sustainability advance in Nike’s line of walking shoes, demonstrates that traditional products can be improved without significant redesign. The goal was to increase Nike’s understanding and integration of sustainability thinking by minimizing toxic chemicals and waste, while at the same time being on a par or superior to its predecessor in performance, value, and profitability. Business partnerships in this effort were crucial—the factory and key suppliers pushed the envelope to reduce waste and find a benign replacement for non-sustainable materials such as chromium-tanned leather.
  • The company is working to eliminate solvents with volatile organic compounds (VOCs). Nike has for several years been collaborating with manufacturing partners and chemical suppliers to develop water-based alternatives to adhesives, primers, degreasers, and mold release agents containing petroleum-based solvents. In 1998, Nike held an open forum, called "Leaving Organic Solvents Behind," for footwear manufacturers in Bangkok, Thailand. Nothing was held back—all information around Nike’s innovations was shared with competitors, including a tour of a Nike factory that had implemented the advances. Along with being the right thing to do, Nike found that the hazardous chemicals replaced by May 31, 2000 had resulted in $4.5 million savings in raw materials alone, not counting those related to labor, storage, and shipping. Nike has eliminated more than 1.6 million gallons of solvent each year, equivalent to more than 32,000 barrels of oil, and has made environmental improvements that benefit 180,000 workers in 37 Asian factories.
  • Nike is phasing out polyvinyl chloride (PVC). PVC, or vinyl, over the past 50 years has become ubiquitous in our society, being used in packaging, sports equipment, pipes, toys, flooring, and thousands of other products. However, PVC has recently come into increasing disrepute as studies have shown the following: the vinyl chloride monomer (used to make the PVC polymer) is a carcinogen; PVC incineration can result in dioxin emissions and dioxins are persistent, highly toxic, bio-accumulative substances; pthalates, a group of compounds used to soften PVC have been identified as endocrine disrupters; additives used in PVC contain toxic heavy metals such as lead and cadmium that do not remain bound in the final product; and PVC is not easily recyclable once it has become waste. Based on the scientific literature and an extensive investigative process, Nike decided to phase out PVC from its products. Finding replacement material has proven a challenge and has required partnering with suppliers in joint research and development efforts.
  • Other projects focus on many aspects of supply chain sustainability, such as reducing packaging, and reducing greenhouse gases associated with all Nike operations, travel and product transportation. The company has also established an extensive internal recycling program and is employing state-of-the-art green building practices for new construction and renovation.
  • All of Nike’s contract factories must abide by Nike’s Code of Conduct. It defines contractors’ obligations to workers and to the company. The Code is translated into the language of the worker and manager, and prominently displayed in all Nike contract factories. A laminated pocket-sized summary version of the Code has been provided to workers in their languages. In addition to its internal monitoring process called SHAPE (Safety, Health, Attitude of Management, People Investment, and Environment), Nike has instituted compliance with its Code of Conduct through independent external parties including the Fair Labor Association (FLA). The FLA is working to ensure that all factories adhere to strict standards in terms of human rights, including the freedoms of association and collective bargaining for wages, working hours, and benefits. One successful monitoring program for Nike has been conducted in Vietnam by the Center for Economic Studies and International Applications (CESAIS) which conducts private focus groups with workers on a regular basis and provides feedback to the factories and Nike.
  • Nike created and launched an education initiative in 1997 to provide opportunities for contract workers to receive a higher education. In 1998, CEO Phil Knight pledged to organize formal education programs in all contract footwear factories by the end of 2001. To date, Nike has contributed $1.3 million to this effort. By year-end 2001, 85 percent of all footwear factories offered education programs to the workers. These include both formal, government-accredited middle or high school programs, and informal vocational and business training. Nike understands that a higher education for workers in developing countries can have a marked positive impact on their future. In China, Nike and World Vision have partnered to create after-hours, free education programs for workers in footwear factories.
  • In Pakistan, Nike is a member of a coalition dedicated to eliminating child labor in the soccer ball industry and to placing Pakistani children into schools. This initiative is being coordinated under the International Labor Organization’s International Program on the Elimination of Child Labor (IPEC) with the participation of the Save the Children Fund, United Nations Children’s Fund (UNICEF), and more than 50 soccer products companies.
  • In Thailand, Nike and Union Footwear, a major manufacturing partner, are working with the Population and Community Development Association (PDA), a local non-governmental organization (NGO), to develop a "Nike Village" concept for rural areas. In these areas, stitching centers are established in the villages as a hub for employment while other opportunities, including vegetable and tree banks, women’s counseling, education programs, and other micro-enterprise projects, are available.

We have been actively engaged with Nike’s sustainability efforts since 1999. We can say from first-hand knowledge that there are people in the company, many with significant authority and responsibility, who are deeply caring, knowledgeable and committed on the issues of corporate responsibility and sustainability. Nike is making authentic and impressive efforts to address the problems of worker rights, working conditions, worker benefits, toxic materials, carbon emissions, and a multitude of other serious concerns. Yet at the same time, many of these issues are so complex, that one company cannot do it all, even one industry cannot do it all. Many of these issues can only be solved by mobilizing whole industrial sectors and the international body politic. It is up to all of us as citizens to voice our concerns, not only to the companies involved, but also to our elected leaders to help mobilize the national and international will to make meaningful structural changes at the international level.

We have interacted first hand with scores of individuals and teams inside Nike who are genuinely trying to figure out what it means to excel in the area of corporate responsibility and sustainability and they are doing so with the blessing and encouragement of the company’s senior management. They are "just doing it" because they personally and professionally believe it is the right thing to do, and they are able to do it because it has become a core value in the company. They, and many of their colleagues, are sincerely doing their best to "Do the Right Thing." It is not just a slogan, it is the real thing. However, like a single player in the NBA, Nike is but one player in a very complex global game. While it can influence the game, it cannot alone determine the outcome. It needs the help of all of us, our involvement, to change the rules of the global game—so that no one is excluded, everyone is a player, and everyone wins in the global game of sustainability.*


* The comments above are excerpted from the book, DANCING WITH THE TIGER: Learning Sustainability Step by Natural Step, by Nattrass and Altomare, New Society Publishers, 2002.



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