IB DP Business Management
Standard Level
To what extent does Nike’s “Move to Zero” campaign make it a more
sustainable organisation?
Key Concept: Sustainability
Word count: 1788
Session: May 2024
Personal code: krs645
Date: 15/12/2023
I confirm that this is my own work and is the final version. I have acknowledged each use
of the words or ideas of another person, whether written or oral
Signed: CL Personal Code: krs645 Date: 15/12/2023
Table of contents:
1. Introduction:
2
Methodology: 3
2. Analysis and Evaluation: 3
a. Ecological sustainability: 3
b. Social Sustainability: 5
c. Economical Sustainability: 6
3 . Conclusion
8
4. Bibliography 9
a. Supporting Documents: 9
5. Appendix: 11
upporting Document 1:
S 1 1
Supporting Document 2: 13
Supporting Document 3: 15
Supporting Document 4: 18
Supporting Document 5: 20
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1. Introduction:
Nike, an American multinational corporation founded in 1964 by Bill Bowerman and Phil Knight
(britannica, nd) , is the world’s largest supplierof athletic shoes and apparel, holding a dominant
position within the sporting industry.
Sustainabilityencompasses ecological, economical,and social aspects and involves meeting
current business needs without compromising future generations' ability to meet their own
requirements. This concept plays a vital role in shaping business objectives and business planning.
Nike prioritisessustainabilityto enhance their brandimage and reputation, seamlessly integrating
it into their core business practices. They have launched a wide range of innovative initiatives and
impactful campaigns aimed at enhancing their generalsustainabilityto maintain as a market
leader within the sporting industry.
On September 19th, 2019, Nike launched the "Move to Zero" campaign at their New York
headquarters. The campaign aims to protect the future of sport by adopting zero-carbon practices
and generating zero waste(Supporting Document 1). Nike has set specific goals for 2025,
including a 70% reduction in greenhouse gas emissions, a 0.5 million metric ton emissions
reduction through the use of 50% environmentally preferred materials, and diverting 100% of
waste from landfills(Supporting Document 1). "Move to Zero" is a corporate social responsibility
(CSR) initiative(Hoang, 2023)by Nike, designed to create asustainablefuture for sports . It not
only helps maintain Nike's position as a leading sportswear company but also addresses the
concerns of employees and customers by considering the external impacts of their business
practices.
However, Business Insider states that Nike's “Move to Zero” campaign is actually being thwarted
by customer demands(Supporting Document 3). The demand for leather shoes, particularly retro
sneakers like Jordans and dunks, clashes with Nike's goal of reducing their carbon footprint. The
popularity of these leather shoes has led to a 35% increase in Nike's leather use(Supporting
Document 3),hindering their progress towards their 2025sustainabilitygoals. This issue further
creates a conflict for Nike, whether they prioritise their financial orsustainabilitygoals. Thus itis
worth investigating, to what extent does this CSR initiative affect Nike’ssustainability?
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Methodology:
This commentary will evaluate thesustainabilityofNike and analyse the impacts the “Move to
Zero” campaign has had on the company since its initial launch in 2019. It will be based on Nikes
financial and impact reports and the campaign initiatives of “Move to zero”. Descriptive
statistics and graphs are also used to create a comparison between different years. Additional
sources were used to provide background information regarding the campaign and to provide a
balanced evaluation upon the campaign’s impacts.
2. Analysis and Evaluation:
a. Ecological sustainability:
Nike’s “ Move to Zero” campaign includes a wide range
of services and programs that play a crucial part in their
efforts to achieve zero carbon emissions and zero waste.
Initially, Nike operated under a traditional business
model that followed a linear approach. The company
created products, which were then consumed by
customers, and ultimately disposed of, focusing on
maximising profit and revenue.
However, since the launch of the “Move to Zero campaign”, Nike transitioned to operating under
a circular business model(Supporting Document 2)where business activity operates in a cyclic
approach placing more emphasis on protecting the environment. They primarily utilise circular
supply models and resource recovery models(Hoang, 2023), in hopes of becoming more
ecologicallysustainable(figure 2.1). The “Move to Zero'' campaign offers a programme known
as recycling and donating(Supporting Document 2). Old Nike apparel ranging from shoes to
clothing is delivered to nearby stores, where specialised workers analyse the eligibility of these
old products for recycling or donation. After the products have been sorted into categories, Nike
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then takes proactive steps to minimise waste by either donating them to non-profit partners or
recycling them and incorporating the materials into the production of new products(Supporting
Document 2), demonstrating the circular business model approach.
Furthermore this campaign also includes the "Nike
Refurbished" program(figure 2.2). Used shoes
and apparel are collected from athletes and
undergo meticulous hand refurbishment instead of
being discarded (Supporting Document 2). This
allows Nike to offer retailers and consumers the
opportunity to purchase high-quality refurbished
shoes at a lower price. The program not only
extends the lifespan of Nike products but also
provides an environmentally conscious option for
customers, reducing waste and generating revenue
through the sale of refurbished footwear.
However there has been criticism regarding their ecological strategy. External stakeholders view
their ecological approaches as a marketing campaign and performative activism masked as new
initiatives to enhance their brand image and reputation(Impakter, n.d.). In addition, Nike falls
behind its competitors in the clothing industry, including The North Face and Patagonia, as it
lacks any notablesustainability-related awards andcertifications.
Despite all the criticism, it is undeniable that Nike is still on track to meet their goals set for 2025
(Supporting Document 1). Nike uses 100% renewable energy in owned and operated facilities in
Canada. By using 100% renewable energy, they reduce their greenhouse gas emissions as well as
lowering the cost for energy. Nike achieved a noteworthy 64% reduction in greenhouse gas
emissions in their facilities, incorporated 39% environmentally preferred materials into their
products, reducing 182,000 metric tons of emissions. Additionally, an impressive 97% of waste
was diverted from landfills(Supporting Document 1). These statistics demonstrate Nike's progress
towards their ambitious 2025 goals.
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Over the next 3 years, a projected mean annual reduction of 2% in GHG emissions will enable
Nike to achieve a 70% overall reduction. Similarly, by implementing an average annual increase
of 1% from 2022 to 2025, Nike will successfully divert 100% of waste from landfills(calculated
using Supporting Document 1), which based on the progress they are making, assumptions can be
made that there is high potential for these aims to be achieved with ease. Despite external
criticisms, there is no doubt that Nike is on track to achieve their business objectives by 2025,
demonstrating the effectiveness of their campaign in making Nike more ecologicallysustainable
in both the short and long term.
b. Social Sustainability:
As part of their “Move to zero” CSR initiative, Nike partnered with Lyra Health to provide mental
health support services for employees in the US, these include free therapy and coaching sessions
as well as meditation, mindfulness resources(Supporting Document 5).Furthermore, Nike
provides workplace flexibility including generous time off and half-days on Fridays in the
summer(Supporting Document 5). This provides job security for employees, motivating them and
addressing the safety needs in Maslow’s hierarchy(Hoang, 2023). In addition, corporate offices
are closed for a designated week in August to prioritise employee well-being. According to Nike's
FY22 impact report, 92% of employees expressed satisfaction with mental health support
services, and 94% valued other benefits, representing the positive impact of Nike’s commitment to
employee wellbeing(Supporting Document 5).
Because the “Move to Zero” campaign introduces varieties of different programmes, the
responsibility and roles that employees are delegated will increase. Despite the increased
workload, Nike continued its commitment to maintaining 1:1 pay equity(Supporting Document 5)
, a goal they have been actively working towards since 2020. The 1:1 pay equity at Nike ensured
equal pay for equal work, regardless of background, improving employee satisfaction and meeting
their safety needs.
In addition, the percentage of women with leadership roles in Nike has also increased up to 44.1%
from an initial 39.3% during FY20(Supporting Document 5). Figure 2.3 shows a positive trend
towards gender diversity and inclusion within the organisation’s leadership ranks, providing
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workers and the general public to know that Nike is a diverse company and respects everyone's
origins, gender and ethnicity.
Despite the impressive statistics provided in the article suggesting that Nike is socially
sustainable, further investigation is needed to ascertain the direct contribution of the "Move to
Zero" campaign to the improved social aspects within the organisation. While the statistics
highlight the social sustainability efforts and achievements of Nike, they do not offer in-depth
information on how the campaign impacted these improved performance, such as increasing the
representation of women in leadership roles.
c. Economical Sustainability:
Revenue is the total income generated by Nike through the sales of their product being a good
measure of financialsustainability(Hoang, 2023).In 2022, Nike saw a 5% increase in reported
revenues from the previous year, reaching $46, 710 million(Supporting Document 4). Nike’s
revenue streams in the form of footwear, apparel and equipment all experienced a percentage
increase(figure 2.4). Specifically, footwear increased by 4%, apparel increased by 5%, Equipment
increased by 18% and lastly the global brand division increased by 308% , contributed
significantly by Nike’s “Move to Zero” campaign(Supporting Document 4). Furthermore,
Converse, a subsidiary of Nike, reported revenues of $2,346 million also showing a 6% increase
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from the previous year(Supporting Document 4).The "Move to Zero" campaign by Nike has
ultimately resulted in a significant improvement in the company's total sales revenue over the
initial course of the first four years.
Additionally, Nike's profitability has seen significant growth. In 2022, Nike's gross profit
increased by 8% to reach an impressive $21,479 million, compared to $19,962 million in 2021
(Supporting Document 4). The gross profit margin also experienced a notable increase of 2.68%,
reaching 46%. This indicates that 46% of Nike's revenue is retained as gross profit(Hoang, 2023),
showcasing the company's ability to effectively manage costs and generate substantial profits.
However, It is important to note that gross profit alone is insufficient to determine a company's
overall economicsustainability. To gain a more comprehensiveunderstanding, it is crucial to
analyse the net profit. In the case of Nike, the net profit increased by 6% from 2021 to 2022,
amounting to $6,046 million. This indicates that even after deducting additional costs, Nike's
profitability improved compared to the previous year.
Furthermore, Nike achieved a profit margin of 12.94% in 2022, showcasing a slight improvement
compared to the calculated profit margin of 12.86% in 2021(figure 2.5). Overall, Nike has
demonstrated impressive financial performance, enhancing their economical sustainability.
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3. Conclusion
To conclude, Nike's "Move to Zero" campaign has made it a moresustainableorganisation to a
great extent. The campaign has implemented various programs changing Nike’s business model,
putting more emphasis on environmental considerations. Nike has made remarkable progress in
reducing waste and carbon footprint and based on current statistics, are on track to achieve their
2025 objectives. However, there is still some uncertainty surrounding the precise independent
impact of the "Move to Zero" campaign on Nike's social and economic performance, particularly
the social aspect. Despite the difficulty to attribute all improvements solely to this campaign, it is
clear that Nike has made substantial strides in its journey towards becoming a generally more
sustainableorganisation. Employee satisfaction has notably increased, and there has been a
positive shift towards greater female representation in leadership roles. Lastly, economically,
Nike’s revenue and profit along with their profit margins has all increased from previous years as
a result of decreased waste and cost for energy due to the “Move to zero” campaign. Further
investigations can be conducted specifically on how the campaign individually has impacted Nike
socially and financially, but ultimately Nike’s “Move to Zero” CSR initiative has made them a
moresustainablecompany to a great extent in all 3 aspects.
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4. Bibliography
a. Supporting Documents:
Supporting Document 1:
Protecting the Planet. (n.d.). [Link]. RetrievedNovember 5, 2023, from
[Link]
Supporting Document 2:
Move to Zero. (n.d.). [Link]. Retrieved November5, 2023, from
[Link]
Supporting Document 3:
[Link]
dunks-airforce-2022-7. (2022, November 21). BusinessInsider. Retrieved November 5, 2023,
from
[Link]
dunks-airforce-2022-7
Supporting Document 4:
NIKE, INC. REPORTS FISCAL 2022 FOURTH QUARTER AND FULL YEAR RESULTS.
(2022, June 27). [Link]. Retrieved November 5, 2023, from
[Link]
ails/2022/NIKE-Inc.-Reports-Fiscal-2022-Fourth-Quarter-and-Full-Year-Results/[Link]
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Supporting Document 5: Nike Impact report
FY22 NIKE, Inc. Impact Report Nike. (n.d.). [Link]. Retrieved November 7, 2023,
from[Link]
b. Textbook:
- Hoang, P. (2023). Business Management fifth edition (5th ed.). Paul Hoang.
c. Additional Sources:
- Hossain, S. (n.d.). Stepping into Sustainability: A Case Study on Nike’s Circular Economy
Initiatives, Operational Strategies, and Societal Impact. Retrieved December 12, 2023, from
[Link]
conomy-initiatives-operational-b2f7b07ee83b
- Nike, Inc. (2023, December 8). Britannica. Retrieved December 12, 2023, from
[Link]
- Web Page Sharpes, E. (n.d.). Sustainability battle of brands: Nike vs Adidas, who's more
sustainable? IMPAKTER. Retrieved December 12, 2023, from
[Link]
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