Sustainable strategy at Nike: Corporate Practice
Nike as a company has made significant efforts to improve its own corporate practices with
regard to sustainability, as well as influencing legislation internationally to improve global
corporate practices. Nike CEO Mark Parker has been instrumental in changing the company‟s
vision regarding responsible, environmentally sound practices. Nike‟s history of sustainability
efforts begins in the late 1995 when the company attempted to lower greenhouse gas emissions
by replacing sulfur hexafluoride (SF6) in its shoes. Sulfur hexafluoride is a greenhouse gas used
in air cushioned shoes. By 2003, Nike completely replaced SF6, which represents 80% of the
company‟s total greenhouse gas emissions since 1997. A second GHG previously found in Nike
shoes, perfluoropropane (PFP), was removed by 2006 when a large research and development
project called “Considered Design” found all nitrogen alternatives for PFP. (Ceres, 2008) The
company also has a history of offsetting emissions. In 2000, Nike purchased its first offsets for
business travel emissions. Since 2000, the company has purchased 111,000 tons of CO2 offsets.
(Ceres, 2008) The next year Nike joined the World Wildlife Fund Climate Savers Program and set
CO2 emission reduction targets. Part of this program requires Nike to submit inventory data for
third party review, as well as biannual progress reports. Nike exceeded its carbon reduction goals
in 2005 and has since expanded these goals.(Ceres, 2008) Joining the WWF Climate Savers
Program shows Nike‟s commitment to accountability and responsibility. Another example of this
commitment is the Corporate Responsibility Committee. Established in 2001, this committee
meets three times per year to review policies and make recommendations. All Corporate
Responsibility meetings are attended either by CEO Mark Parker or chairman Philip Knight.
(Ceres, 2008) In 2006, the company improved its framework for ensuring executive
accountability and responsibility. Nike has organized corporate responsibility teams that are
managed by the Vice President of Corporate Responsibility, who in turn answers directly to CEO
Mark Parker. Since 2007 the Nike Board of Directors approved new global corporate
responsibility targets, GHG reduction goals, and climate neutrality goals. (Ceres, 2008)
Nike is also very politically active and has facilitated meaningful change in legislation. In
November, 2007 Nike joined other corporations such as Sun Microsystems and Coca Cola as
signatories of the Bali Communiqué. (Ceres, 2008) The Bali Communiqué calls for a legally
binding United Nations framework to solve climate change issues. At the signing of this
communiqué, CEO Mark Parker said, “Tackling climate change is a catalyst for growth and
innovation. These are complex issues, which is why international agreement and action is
imperative to creating positive change.” (Ceres, 2008) Parker has also personally written letters
to congressional leaders in 2007 and 2008 urging meaningful legislative changes with regard to
climate change. Nike has attempted to further the discussion of climate change by sponsoring the
Focus the Nation initiative, which is designed to open dialogue between civic organizations, faith
organizations and students. Also, in 2008, Nike joined the Climate group, which aims to accelerate
climate action internationally. Another huge step Nike took in promoting sustainability was
BICEP, the Business for Innovative Climate and Energy Policy. (Ceres, 2008) This business
coalition was founded in November 2008 by Nike, Sun Microsystems, and Starbucks in
partnership with Ceres, a coalition of environmental and special interest groups working with
companies to address global sustainability challenges. The goal of BICEP is to promote strong
climate and energy legislation in the United States. BICEP promotes policy changes based on 8
guiding principles:
1.) Set short- and long-term greenhouse gas reduction targets 2.) Stimulate “green” job growth
3.) adopt a national renewable portfolio standard 4.) Capture vast energy efficiency opportunities
5.) Boost investment in renewable energy, energy efficiency and carbon capture and storage
technologies 6.) Establish cap-and-trade system with 100% auction of carbon allowances 7.)
Encourage transportation for clean energy economy 8.) Limit construction of new coal plants to
those that capture and store CO2. (Ceres, 2008)
Nike is also a signatory to the World Wildlife Fund Tokyo declaration in 2008, which claims that
greenhouse gas emissions must be reduced by 50% by 2050, and that total emissions must
decline within 10 to 15 years to avoid serious consequences. (Sony Corp., 2008) Other notable
signatories of this declaration include Sony and Nokia. Nike has also stepped up its sustainability
efforts in the United States: the company is now a member of the Oregon Governors Climate
Change Integration Group as their headquarters is located in Beaverton, Oregon. In addition to
this, Nike has testified on two occasions at field hearings of the US House of Representatives Select
Committee on Global Warming and Energy Independence. (Ceres, 2008) While Nike has testified
in favor of stricter legislation in the US, their motives must be considered as over 97% of Nike
shoe production occurs outside the US. (Nike, Inc. 10k Form, 2010) Hence, Nike would not feel
the economic burden of cap-and-tax legislation, giving them an advantage over domestic US shoe
companies.
In addition to Nike‟s many efforts to effect change through legislation and international
agreements, the company has made significant internal improvements as well. Nike publishes an
annual Corporate Responsibility Strategy report detailing the company‟s sustainability efforts,
goals and results. (Nike, Inc., 2010) In addition to the CRS reports, Nike introduced the
“Considered Index” in 2007. (Henderson et al, 2009) This index is a tool for measuring material
usage across the diverse line of shoes Nike produces. The Considered Index evaluates and scores
Nike shoes based on metrics like amount of waste and solvent usage. (Henderson, 2009) The
index also incorporates awards for innovation and gives production teams incentives to improve
the production process of their shoe. (Henderson, 2009) Nike has also attempted to reduce its
employee carbon emissions through various workshops, including one called Climate Café
located at their headquarters. In 2008, the company introduced an internet forum for employees
to share and discuss ideas related to lowering emissions. (Ceres, 2008) Nike also promotes
alternative transportation options for employees such as electric vehicle charging stations, as
well as promoting virtual meetings to lower travel emissions. Nike also offsets 100% of its
business air travel emissions. (Ceres, 2008) Efforts to improve the company‟s manufacturing
practices include audits of factories with the goal of increasing efficiency. The Nike Energy
Challenge is another program that creates a competition between company facilities to spur
innovation and efficiency. Not only is Nike looking to lower its energy demands through increased
efficiency, but the company is looking to clean up the supply of energy used in its factories. For
example, in the Nike European Distribution Center, located in Laakdal, Belgium, there are 6 wind
turbines producing electricity. This facility is the largest of its kind in Belgium to run solely on
clean energy produced on-site. (Ceres, 2008)
Discussion:
1. Has BICEP of Nike been successful so far?
2. Do you think the company is doing enough?