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NIKE shares the widely held view that climate change is a serious challenge requiring immediate and meaningful action by government, industry, consumers and society as a whole. In response, we have made eliminating greenhouse gas emissions across our operations a cornerstone of our sustainability initiative. We firmly believe this will help create innovative, sustainable and more profitable business processes.
Considering climate change and our climate footprint are not new for Nike. They are issues we have focused on for more than a decade as we’ve seen how our business is shaped by change and has a role in making our impact a positive one. To that end, we have established environmental programs and policies across our business and integrated into the design function—at the very core of our business.Partnership with the World Wildlife Fund
In October 2001 Nike joined the World Wildlife Fund’s Climate Savers program as a founding partner. This program provided us with an aggressive internal target to reduce CO2 emissions in two of its biggest areas of impact: Nike-operated facilities (of 20,000 sq ft or more) and business travel. By December 31, 2005, Nike successfully achieved its target and then some, reducing CO2 emissions 18 percent from a 1998 baseline.
Nike-Owned Facilities: Energy-efficiency projects (funded with savings from prior energy-efficiency efforts) have lowered our total facility emissions below 1998 levels even while facilities grew by approximately 6 percent. Over the same period, we have steadily increased our purchase of green power credits to cover more than one-half of the power used by major Nike facilities.
At our European distribution center in Laakdal, Belgium, we worked with the local power supplier to install six wind turbines with the capacity to power the center (approximately 2 million square feet). The turbines produce a combined 9 megawatts of power, amounting to an estimated 22 million kilowatt hours of energy—the equivalent needed to power about 8,000 households. The project is the result of two years of partner and community dialogue and nine months of construction. It also reset the bar for renewable power in Belgium as the first company of its size to operate solely on green energy produced on site.
Business Travel: Nike delivered significant amount of offsets through its business travel CO2 emissions efforts. These efforts partnered with airlines, rental car companies, government energy departments and the CO2 retail market to track and deliver offsets to company travel. Moving forward, all Nike business travel emissions will be offset through investments in high-quality offset projects.
Future Direction
Nike’s current climate change mitigation strategy is broken down into two broad areas of focus: Nike owned and operated operations and our work with business partners.
In Nike Owned and Operated Operations
Every Nike employee and every Nike-owned facility (e.g. our corporate headquarters/facilities, retail stores, distribution facilities and in-house manufacturing) together represent an estimated 5.7 percent of our overall CO2 emissions footprint.
We have now set targets to achieve climate-neutral status by 2011 for Nike brand facilities and by 2015 for all NIKE, Inc. facilities. To accomplish this goal, we are increasing energy efficiency projects, direct renewable energy purchases, and renewable energy credit or “greentag” purchases. We also will explore the carbon trading market and add new preferred travel suppliers to our company’s Eco-Class program which sets aside funding from every journey to invest in offset projects.
With Our Business Partners
We recognize that the climate change impact of our business extends far beyond the boundaries of what we directly own and operate. The vast majority of our climate change impact comes from the operations of our business partners—often in emerging economies— that may or may not be subject to national regulation.
We recognize that reducing CO2 throughout our supply chain and logistics is, by far, our greatest challenge. This challenge comes from the fact that we do not own or control supply chain or manufacturing operations. We realize this is where the bulk of reductions need to occur if we are to meet our goals of dramatically reducing our overall climate footprint.
To this end, we work with business partners to measure the CO2 footprint of our contract manufacturing and logistics and have made some meaningful progress with our business partners in raising awareness and introducing innovations to reducing the overall environmental impact. In addition, we have set some reaching targets:
- For inbound logistics (from factory to distribution center) we aim to achieve a 30 percent absolute reduction in our inbound logistics footprint from a 2003 baseline by 2020.
- For outbound logistics (distribution to retail) we are working to develop models that will measure our overall footprint.
- In footwear contract manufacturing, we expect to set significant reduction targets by January 2008.
- In manufacturing, we are working to assess the carbon embedded in the materials from which products are made.
Climate change is our greatest sustainable development challenge. It is inextricably linked to many other important sustainable development issues: water scarcity, agricultural productivity, coastal flooding, migration and poverty.
Left unchecked, we believe we will experience an erosion not just of environmental capital, but of built, human and social capital, the scale of which we are only just beginning to see.
James Hansen, chief scientist at NASA believes we have only a 10 year window of opportunity for decisive action. The cost of early action, which so many give as an excuse for doing nothing, will be far exceeded by the costs of a delayed response.
Our industry is no exception. We will be impacted by all of these issues in multiple ways and need to work together—sharing knowledge, mobilizing resources, harnessing new technologies, lobbying governments and encouraging consumers to participate in the race against climate change.
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