{"id":8139,"date":"2016-11-03T14:24:57","date_gmt":"2016-11-03T18:24:57","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/sustainability-in-the-apparel-industry-just-do-it\/"},"modified":"2016-11-03T14:24:57","modified_gmt":"2016-11-03T18:24:57","slug":"sustainability-in-the-apparel-industry-just-do-it","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/sustainability-in-the-apparel-industry-just-do-it\/","title":{"rendered":"Sustainability in the apparel industry: Just do it."},"content":{"rendered":"

Sustainability in the apparel industry: Just do it.<\/strong><\/p>\n

A Case Study on Nike<\/em><\/p>\n

The apparel industry accounts for 10% of global carbon emissions and is the second largest industrial polluter. [1]<\/a> This can be partially explained by the size of the apparel industry, with estimates as high as $3 trillion, given that 150 billion garments, or 20 per person, are produced annually.[2]<\/a><\/p>\n

Context: Apparel Industry and Climate Change<\/strong><\/p>\n

Carbon Emissions<\/em><\/p>\n

A 2009 report estimated that the global apparel industry consumed nearly 1 billion kWh of electricity or 130 million tons of coal.[3]<\/a> Nike can focus on materials, since the company uses more than 16,000 materials products each year, one pair of shoes can have up to 30 materials, and the below 4 materials are found in 98% of its products.[4]<\/a><\/p>\n

Chart 1: Carbon Emissions by Material<\/em>[5]<\/a><\/p>\n

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Water Waste<\/em><\/p>\n

There will be an imbalance between the demand for new clothes and the supply of water to produce these clothes, with demand predicted to exceed supply by 40% in 2030. The 28 billion kilograms of textiles that are dyed per year require over 5 trillion liters of water (2 million Olympic-sized swimming pools). Furthermore, countries that are part of the textile supply chain, such as China, India, and Bangladesh, are already stressed by insufficient water supply.[6]<\/a><\/p>\n

Chart 2: Water Waste by Stages[7]<\/strong><\/a><\/em><\/p>\n

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Regulatory Risks<\/em><\/p>\n

The COP21 Climate Agreement, effective in 2020 to address global warming, increases the risk that companies will be held to sustainability goals. [8]<\/a><\/p>\n

Profitability Risks<\/em><\/p>\n

Climate change results in extreme weather conditions that disrupt Nike\u2019s supply chain. For example, in 2008, floods temporarily shut down four Nike factories in Thailand, and there is concern about droughts for cotton-producing regions.[9]<\/a><\/p>\n

Similar to what happened in the food industry, customers are starting to care about whether their clothes were produced sustainably. Customers may choose to shop at companies that have incorporated sustainability practices into their business model.[10]<\/a><\/p>\n

Nike: Steps Taken<\/strong><\/p>\n

Nike\u2019s mission is to double the business while halving the impact.<\/p>\n

Product\/Materials<\/strong><\/p>\n

Nike focused on increasing sustainable materials, resulting in the greatest environmental impact in the entire product cycle. The Material Sustainability Index lets teams compare the environmental impacts of 57,000 materials across 741 vendors, resulting in 26% sustainable cotton and 17% recycled polyester. Flyknit technology has reduced waste by 60% and expanded into 28 products across 6 categories.<\/p>\n

Carbon\/Energy<\/strong><\/p>\n

Nike committed to decreasing its carbon footprint, especially during the high-impact, materials stage of the value chain: materials growing, processing, and finishing. In addition to using low-carbon materials, the company developed an energy-efficient resource toolkit for dyeing and finishing facilities to be rolled out in FY16\/17. The company scaled renewable energy at its own factories, while encouraging manufacturers to decrease emissions. These actions resulted in an 18% per-unit reduction in CO2 emissions.<\/p>\n

Waste<\/strong><\/p>\n

Nike reduced waste by designing better products from the start. Its Flyknit technology reduced waste by 2M pounds, and recycled polyester yarn diverted >182M plastic bottles from landfills. Nike used recycled materials in 71% of its footwear and apparel products, while encouraging material vendors to ship pre-cut pieces and recycle scraps at their own factories. The company achieved 6% per-unit savings across categories and reduced the shoebox weight by 6.3%.<\/p>\n

Water<\/strong><\/p>\n

Nike collaborated with material vendors with water-intensive textile dyeing and finishing operations to help manage water and reduce waste. Nike was incentivized to work with suppliers since the latter\u2019s performance was incorporated into Nike\u2019s sustainability index. The ColorDry technology was used by a Taiwanese facility to dye fabrics without water, saving 20M liters of water. Results included an 18% per-unit water reduction in apparel, and a 43% per-unit water reduction in footwear manufacturing.[11]<\/a><\/p>\n

Nike: Other Ideas<\/strong><\/p>\n