Case Study: Nike
In practice, sports apparel and footwear production is rarely managed directly by brand owners, but is contracted out to supplier factories, many of whom further sub-contract the work to other factories and to home-workers. By the early 1990s, it became clear that the rights of many contracted workers were not adequately protected by the state or contract factory. Nike, as one of the biggest brands in the business, drew heavy criticism for contracting to factories which allegedly violated minimum wage and overtime laws and used child labor. Nike directly employs 30,000 people around the world, 6,000 of whom work at Nike World Headquarters. As of 2006, Nike products were manufactured by nearly 800,000 workers in 700 contract factories located in 52 different countries.
Nike drafted its first code of conduct for contract labor in 1991 and distributed it to factories the next year, making it the first code of its kind for the sporting apparel industry. All contract factories were required to sign the document, which banned the use of forced or child labor and committed them to compliance with local laws on wages, benefits, overtime, and environmental protection. The code was later amended to include the right to free association and collective bargaining. In 2005, Nike became the first company to publicly release supplier details of Nike branded products. In addition, they developed a long-term sustainability goal, their North Star. Today, sustainability, performance and innovation are an integrated part in Nike’s organization. They work in the spirit of industry-wide collaboration towards sustainability.
Nike’s North Star Innovation Goals
Closing the Loop
Athletes as Change Agents
Nike’s Reuse-A-Shoe program grinds used athletic shoes and uses the recycled materials in surfaces for basketball courts, athletic tracks, artificial soccer fields, playground fall protection, and other recycled products. It has kept more than 21 million postconsumer and defective shoes out of landfills.
Nike’s Considered shoe line, marked a shift in the way sustainability was addressed. It is best described as a design ethos that focuses on creating products made with fewer toxics, less waste, more environmentally preferred materials and sustainable product innovation.
In order to better evaluate the environmental footprint of all Nike products and develop incentives for change amongst the design teams, the Nike Considered Index was developed. It uses a lifecycle approach to examine design and production factors. Considered products are rated as gold, silver or bronze.
Prominent athletes such as Steve Nash and Michael Jordan have promoted gold standard shoes, adding star power to the Considered line. The Steve Nash “Trash Talk” shoe was among the first sports performance shoes to be rated gold under the Considered Index. It is made from manufacturing waste.
The Natural Step
In 1998, The Natural Step began to work with Nike to help it apply the principles of sustainability to its business operations, and the company formalized its commitment to sustainable commerce with an official policy statement later that year. Hundreds of Nike employees were trained to use The Natural Step Framework between 1998 and 2001, leading to numerous innovative programs to further its sustainability goals. In 2008, Nike partnered with The Natural Step again to help assess and further develop its approach to product innovation by defining a long-term vision for sustainable products. The resulting North Star vision and innovation goals position Nike to become a leader in sustainable product innovation and navigate toward a sustainable future.
“We see corporate responsibility as a catalyst for growth and innovation. It is an integral part of how we can use the power of our brand, the energy and passion of our people, and the scale of our business to create meaningful change.”
“What really impressed me working with [TNS] in the past year was their ability to take the principles of sustainability, understand the business model they were being plugged into and come up with clear and concise statement of what that means for the business.”
“For me the big piece was watching younger generations of designers and developers go through the TNS workshops. It was great to see them get so excited about sustainability. They agreed that we need to be working toward sustainability as a company, and they could see how the TNS training would be meaningful in their jobs.”
- Manufacturing waste in the shoe “Trash Talk” 100%
- Reduction of harmful chemicals in Nike’s environmental rubber formula 97%
- Reduction of total solvent use between 1995-2003 95%
- Glue or chemicals in the PreeCool vest 0%
Shaping the Future
Nike will continue to refine its innovation goals and create action plans to move forward on each individual goal. An important element of their work is to understand how they can contribute to healthy communities and human needs by designing more sustainable products. The innovation goals address the social component of sustainability by emphasizing the importance of returning clean water to communities and removing toxic materials from the waste stream that might otherwise end up in landfills.
Nike has already begun to collaborate across the industry through work with Levi Strauss and the Organic Cotton Exchange. They have shown a lot of leadership, and are trying to change the industry and engage other companies to do the same.