{"id":26939,"date":"2017-11-15T23:07:00","date_gmt":"2017-11-16T04:07:00","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/nike-the-sustainability-transformation-of-the-decade\/"},"modified":"2017-11-24T13:24:51","modified_gmt":"2017-11-24T18:24:51","slug":"nike-is-it-the-sustainability-transformation-of-the-decade","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/","title":{"rendered":"NIKE: Is it the Sustainability Transformation of the Decade?"},"content":{"rendered":"

Industry Challenges<\/strong><\/h3>\n

The $3 trillion global apparel industry remains the second largest industrial polluter, following oil & gas [1].\u00a0 The industry is a complicated business involving long and varied supply chains.\u00a0 Each step of the chain requires tremendous consumption and puts pressure on our carbon footprint.\u00a0 The industry accounts for 10% of global carbon emissions and 25% of the world\u2019s chemical usage [2].\u00a0 The compiled pollution releases toxic chemicals into our air, water, and soil, resulting in the creation of greenhouse gases and diminution of our water resources.<\/p>\n

As one of the largest apparel brands, Nike has a significant role to play in shaping the climate change conversation for two primary reasons: corporate social responsibility and business performance.<\/p>\n

<\/h3>\n

Corporate Social Responsibility<\/strong><\/h3>\n

Operating 566 factories, employing over a million workers, Nike is responsible for the well-being of those workers and the communities they live in [3].\u00a0 In the late 90s, the company suffered from negative allegations regarding harsh labor and factory conditions.\u00a0 Since then, Nike has made one of the greatest image turnarounds in the recent decade.\u00a0 And focus on sustainability has been the means to achieve it.\u00a0 The company revamped its management tools \u2013 one such example includes the Sourcing & Manufacturing Sustainability Index (SMSI), a tool used to evaluate factories on health, safety, and environmental dimensions.\u00a0 By 2020, Nike targets to have 100% of its factories improve to the highest required SMSI scores [4].<\/p>\n

<\/h3>\n

Business Performance<\/strong><\/h3>\n

By minimizing the environmental footprint, improving product innovation, and transforming manufacturing, Nike has repositioned its supply chain to use sustainability as a strategic growth engine.<\/p>\n

To minimize waste in 2015, Nike used 54 million pounds of factory scrap and transformed it into premium material.\u00a0 Additionally, the company reduced water use per unit in footwear by 43% [6].\u00a0 These initiatives introduced Nike\u2019s Closed Loop Ecosystem, a new method for designing, finishing, and processing materials (See Figure 1).<\/p>\n

Figure 1 \u2013 Nike\u2019s new way of thinking about a sustainable product lifecycle<\/p>\n

\"\"<\/a><\/p>\n

As of September 2017, Nike announced the launch of Nike Flyleather, a new super material made with ~50% recyclable leather fibers, using 90% less water, and an 80% lower carbon footprint.\u00a0 The product is created to maximize performance as it’s 5x more durable and 40% lighter than regular leather [7].\u00a0 As Nike expands this new material to its leather sneaker portfolio, it’ll have a strong impact on cost reduction and production waste.\u00a0 Similar to the impact the Flyknit technology created post 2012, reducing waste by ~3.5 million pounds.<\/p>\n

In manufacturing, Nike diverted 92% of total waste from landfill and incineration without energy recovery.\u00a0 And in Q1 of 2014, Nike reached a major step by introducing a water-free dyeing facility in Taiwan.\u00a0 The factory features high-tech equipment designed to eliminate the use of water and process chemicals from fabric dyeing \u2013 Nike names the innovation \u201cColorDry.\u201d\u00a0 See Figure 2 for an image of the factory [9].<\/p>\n

Water is outpacing population growth, and over the next decade, water demand will exceed the general population growth 4 to 1, implying two-thirds of the world\u2019s population could be living in water-stressed areas [8].\u00a0 The ColorDry investment marks Nike\u2019s strong commitment to taking a future outlook and reducing its reliance on constrained resources.<\/p>\n

Figure 2 \u2013 ColorDry technology at new facility in Taiwan<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

What\u2019s Next?<\/strong><\/h3>\n

Nike set a prime example of using sustainability as a competitive driving force.\u00a0 As a result, the sustainability initiatives have created a solid foundation to adapt to climate change pressures (e.g., emission cuts, constrained supply of cotton and leather).\u00a0 Nike should now use these same sustainability principles and apply them to its dotcom business, which is an important strategic focus for the next 5 years.\u00a0 Nike plans to grow its E-Commerce business to $7 billion by 2020 (a $5 billion increase over today\u2019s position).\u00a0 The growth will meaningfully increase the number of packages shipped per day, and hence will be compounded by number of packages returned.\u00a0 The growth will inadvertently create lots of waste in the system.\u00a0 In the short-term, I\u2019d like to see Nike use its sustainability best practices in packaging and shipping.\u00a0 A few years ago, Nike hired a design firm to help it rethink packaging, but those ideas haven\u2019t been fully realized in the mainstream [11].\u00a0 I hope to see Nike expedite the innovation on that front to ride its next wave of growth.<\/p>\n

As alluded to earlier, the company has done a great job at incorporating synthetic fabrics to address cotton and water supply shortages, but in some cases, synthetic fibers can emit gases like n20, which are 300x more damaging to the environment compared to co2 [12].\u00a0 I\u2019m sure Nike has processes in place to monitor such effects, but I\u2019d make sure these reactions aren\u2019t offsetting the hard work.<\/p>\n

This brand has truly lived and breathed its sustainability mission and I’m confident it will continue to innovate and set the standard, but can Nike actively expand this standard and help other industry players realize its benefits?\u00a0 Should Nike even play this role?\u00a0 The big question I pose for you, is how can we now create a movement within the apparel industry and get other key players to set high sustainability standards?<\/p>\n

 <\/p>\n

Word Count<\/strong><\/span><\/p>\n

800<\/p>\n

 <\/p>\n

Sources<\/strong><\/span><\/p>\n

[1] EcoWatch \u2013 Fast Fashion is the second dirtiest industry in the world, (August 2015), \u201chttps:\/\/www.ecowatch.com\/fast-fashion-is-the-second-dirtiest-industry-in-the-world-next-to-big–1882083445.html\u201d<\/p>\n

[2] Forbes \u2013 Making Climate Change Fashionable, (December 2015) \u201chttps:\/\/www.forbes.com\/sites\/jamesconca\/2015\/12\/03\/making-climate-change-fashionable-the-garment-industry-takes-on-global-warming\/#65145f9379e4\u201d<\/p>\n

[3] Nike, Inc., The manufacturing map of global factories, (August 2017) \u201chttp:\/\/manufacturingmap.nikeinc.com\/\u201d<\/p>\n

[4] Shoes & Accessories (Factiva), Market Trends: Footwear Consumer 2030 – Incorporating Global Trends to Foresight Footwear Market (August 2017)<\/p>\n

[5] Quartz, Nike proves cleaning up your act is smart business, (August 2015) \u201chttps:\/\/qz.com\/485333\/nike-north-americas-most-sustainable-big-brand-proves-that-cleaning-up-your-act-is-smart-business\/\u201d<\/p>\n

[6] Nike, Inc., Sustainability Report, (August 2017) \u201chttps:\/\/about.nike.com\/pages\/environmental-impact\u201d<\/p>\n

[7] Nike, Inc., Transforming Manufacturing, (August 2017) \u201chttps:\/\/about.nike.com\/pages\/transform-manufacturing\u201d<\/p>\n

[8] Huffington Post, Shocking Environmental implications of Fashion (August 2015) “http:\/\/www.huffingtonpost.co.uk\/heidy-rehman\/shocking-environmental-fast-fashion_b_8009850.html”<\/p>\n

[9] Nike, Inc., ColorDry technology, (December 2013) “https:\/\/news.nike.com\/news\/nike-colordry”<\/p>\n

[10] Nike, Inc., Investor Day Report, (August 2017) “http:\/\/s1.q4cdn.com\/806093406\/files\/images\/irday\/Heidi-Adam-Transcript-with-slides.pdf”<\/p>\n

[11] Esquire, The Man Who’s Making Nike More Sustainable, (June 2017) “http:\/\/www.esquire.com\/style\/mens-fashion\/news\/a55854\/nike-arthur-huang\/”<\/p>\n

[12] Eco Textiles, January 2011, \u201chttps:\/\/oecotextiles.wordpress.com\/2011\/01\/19\/estimating-the-carbon-footprint-of-a-fabric\/\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

“how can we double our business with half the impact on the world?”
\n-NIKE CEO, Mark Parker<\/p>\n","protected":false},"author":10392,"featured_media":26940,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-26939","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","hck-taxonomy-organization-nike","hck-taxonomy-industry-apparel-and-accessories","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nNIKE: Is it the Sustainability Transformation of the Decade? - Technology and Operations Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"NIKE: Is it the Sustainability Transformation of the Decade? - Technology and Operations Management\" \/>\n<meta property=\"og:description\" content=\""how can we double our business with half the impact on the world?" -NIKE CEO, Mark Parker\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/\" \/>\n<meta property=\"og:site_name\" content=\"Technology and Operations Management\" \/>\n<meta property=\"article:modified_time\" content=\"2017-11-24T18:24:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"728\" \/>\n\t<meta property=\"og:image:height\" content=\"515\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/\",\"name\":\"NIKE: Is it the Sustainability Transformation of the Decade? - Technology and Operations Management\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg\",\"datePublished\":\"2017-11-16T04:07:00+00:00\",\"dateModified\":\"2017-11-24T18:24:51+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/wp-content\\\/uploads\\\/sites\\\/4\\\/2017\\\/11\\\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg\",\"width\":728,\"height\":515},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/nike-is-it-the-sustainability-transformation-of-the-decade\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"NIKE: Is it the Sustainability Transformation of the Decade?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/\",\"name\":\"Technology and Operations Management\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-rctom\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"NIKE: Is it the Sustainability Transformation of the Decade? - Technology and Operations Management","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/","og_locale":"en_US","og_type":"article","og_title":"NIKE: Is it the Sustainability Transformation of the Decade? - Technology and Operations Management","og_description":"\"how can we double our business with half the impact on the world?\" -NIKE CEO, Mark Parker","og_url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/","og_site_name":"Technology and Operations Management","article_modified_time":"2017-11-24T18:24:51+00:00","og_image":[{"width":728,"height":515,"url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/","url":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/","name":"NIKE: Is it the Sustainability Transformation of the Decade? - Technology and Operations Management","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg","datePublished":"2017-11-16T04:07:00+00:00","dateModified":"2017-11-24T18:24:51+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg","contentUrl":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2017\/11\/four-steps-to-sustainability-as-a-strategic-asset-5-728-1.jpg","width":728,"height":515},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/nike-is-it-the-sustainability-transformation-of-the-decade\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-rctom\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/"},{"@type":"ListItem","position":3,"name":"NIKE: Is it the Sustainability Transformation of the Decade?"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-rctom\/#website","url":"https:\/\/d3.harvard.edu\/platform-rctom\/","name":"Technology and Operations Management","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-rctom\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/26939","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/users\/10392"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/comments?post=26939"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/hck-submission\/26939\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media\/26940"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/media?parent=26939"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-rctom\/wp-json\/wp\/v2\/categories?post=26939"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}