In the opening of Nike’s 2015 Letter from CEO, Mark Parker wrote: “We live in a time of unlimited opportunity and relentless challenge… And the challenge of climate change demands everyone’s ingenuity.” [i] The link between the athletic footwear juggernaut and climate change may not be apparent at first. But considering the impressive scale and span of Nike’s global supply chain, it’s easy to understand why Nike’s business is far from being isolated from the impacts of climate change.
Impetus for change
Extreme weather brought by climate change has historically disrupted Nike’s supply chain. In 2008, four Nike factories in Thailand were temporarily shut down due to floods. [ii] Rising droughts in the regions that produce cotton also posed threat to supply of raw material. [iii] When droughts occur, there is less cotton in the market, the price for cotton goes up and the market becomes volatile. Water scarcity and quality, by-products of climate change, also substantially increased costs of textile manufacturing for Nike. [iv]
Transforming supply chain and manufacturing process
Amid growing resource scarcity, fluctuations in the prices of raw materials and disruptions to supply chains, Nike found innovative ways to minimize its environmental footprint and transform its manufacturing process.
In 2008, Nike began experimenting with synthetic material that is less dependent on weather conditions. [v] Polyester manufacturing scraps and recycled plastic bottles are washed, chopped into flakes and melted down to produce fine yarn used to create fabric. [vi] Since then, Nike has been using recycled polyester for its track jackets, soccer jerseys, women training pants and polos. To reduce material waste, Nike also reclaim materials in the manufacturing process and at the end of a product’s life to produce new shoes. [vii]
In 2012, Nike introduced Flyknit shoes which are manufactured using an entirely new method of making shoes. [viii] The Nike Flyknit was produced using digital knitting technology – a technology that leverages the art of knitting and precisely engineers yarns and fabric variations only where they are needed. [ix] The technique reduces waste by 60% on average compared to sports footwear manufacture that uses the traditional cut and sew method which uses multiple materials and material cuts. [x] Since the launch, the Flyknit technology has saved nearly 2 million pounds of waste. [xi]
2012 was the same year that Nike entered into a strategic partnership with DyeCoo Textile Systems B.V., a Netherlands-based company that has developed and built the first commercially available waterless textile dyeing machines. [xii]
Conventional textile dyeing requires substantial amounts of water. An estimated 100-150 liters of water is needed to process one kg of textile materials. [xiii] With waterless dyeing, the amounts of water used in conventional textile dyeing will no longer be needed, nor will the commensurate use of fossil fuel-generated energy be required to heat such large sums of water. [xiv]
The benefits and impacts of waterless dyeing are significant. Waterless dyeing saves water, energy and eliminates the need for added chemicals in the fabric dyeing process. [xv] Additionally, because there is no need for drying, the process of dyeing becomes twice as fast, provides greater control over the dyeing process and allows fabric dyeing to take place in just about anywhere. [xvi] As of 2015, Nike had produced 600,000 yards of fabric with waterless dye and saved 20 million liters of water. [xvii]
Nike is a great example of a company that is adapting to challenges presented by climate change. The company has transformed its supply chain by using low impact materials, reducing waste and experimenting with new manufacturing methods. Beyond those measures, Nike also embedded sustainability into its long-term strategy: established Sustainability Team, implemented various sustainability indexes and provides incentives for improving product sustainability. [xviii]
Since the company has ambitious sustainability targets for 2020-2050, the company could also consider two additional initiatives to advance its sustainability agenda:
- Market its products differently to consumers to create behavioral change and increase demand for more sustainable apparel
- Lobby for government policies that favor or provide incentives for the production of more sustainable products.
[i] Nike, Inc., FY 14/15 Nike, Inc. Sustainable Business Report, (Beaverton: Nike, Inc., 2015).
[ii] Coral Davenport, “Industry Awakens to Threat of Climate Change,” New York Times, January 23, 2014, http://www.nytimes.com/2014/01/24/science/earth/threat-to-bottom-line-spurs-action-on-climate.html?_r=0, accessed November 2016.
[iv] Ceres, “Physical Risks from Climate Change: A guide for companies and investors on disclosure and management of climate impacts,” https://www.ceres.org/resources/reports/physical-risks-from-climate-change, accessed November 2016.
[v] Coral Davenport, “Industry Awakens to Threat of Climate Change,” New York Times, January 23, 2014, http://www.nytimes.com/2014/01/24/science/earth/threat-to-bottom-line-spurs-action-on-climate.html?_r=0, accessed November 2016.
[vi] Nike, Inc., “Nike Introduces First Product with Colordry Technology”, http://news.nike.com/news/nike-introduces-first-product-with-colordry-technology, accessed November 2016.
[vii] Nike, Inc., FY 14/15 Nike, Inc. Sustainable Business Report, (Beaverton: Nike, Inc., 2015).
[viii] Christopher Klimovski, “The Complete History of Nike’s Flyknit Technology,” Hypebeast, https://hypebeast.com/2016/2/nike-flyknit-technology-history, accessed November 2016.
[ix] Nike, Inc., “Nike Engineers Knit for Performance”, http://news.nike.com/news/nike-flyknit, accessed November 2015.
[xi] Nike, Inc., FY 14/15 Nike, Inc. Sustainable Business Report, (Beaverton: Nike, Inc., 2015).
[xii] Nike, Inc., “Nike, Inc. Announces Strategic Partnership to Scale Waterless Dyeing Technology”, http://news.nike.com/news/nike-inc-announces-strategic-partnership-to-scale-waterless-dyeing-technology, accessed November 2016.
[xiii] Kirsten Korosec, “Nike’s Waterless Dye Factory Cuts Energy Use 60%,” Environmental Leader, December 3, 2013, http://www.environmentalleader.com/2013/12/03/nikes-waterless-dye-factory-cuts-energy-use-60/#ixzz4P0m97hi0, accessed November 2016.
[xiv] Nike, Inc., “Nike, Inc. Announces Strategic Partnership to Scale Waterless Dyeing Technology”, http://news.nike.com/news/nike-inc-announces-strategic-partnership-to-scale-waterless-dyeing-technology, accessed November 2016.
[xvii] Nike, Inc., FY 14/15 Nike, Inc. Sustainable Business Report, (Beaverton: Nike, Inc., 2015).
Two photos are sourced from: Christopher Klimovski, “The Complete History of Nike’s Flyknit Technology,” Hypebeast, https://hypebeast.com/2016/2/nike-flyknit-technology-history, accessed November 2016.