The carbon footprint is the overall mix of greenhouse gas emissions generated by a product through the entirety of its life cycle, from conception and design until it is eventually used and discarded or, hopefully, recycled. The carbon footprint is a useful tool in measuring the affect that a business, or nation for that matter, has on the greater climate as our Earth continues to be affected by climate change. Multinational corporations like Nike can be huge contributors to global carbon emissions if a system of measuring, reporting, and accountability are not put in place. Nike has set an official goal of reducing carbon emissions per unit by 20% through the fiscal year 2015 as compared to a baseline measurement taken in 2011. Through Fall 2014 Nike has already made significant progress towards achieving that goal through many sustainability initiatives across the entire value chain. To achieve this goal they have placed an emphasis on the decoupling of green house gas (GHG) emissions from profit growth.
With a focus on sustainability Nike uses a comprehensive approach in addressing GHG emissions within avenues of the supply chain they either own or they influence. The materials scoring index as well as the supplier rating and verification systems both seek to address carbon emissions from avenues of the supply chain not directly within Nike’s control. They have also attempted to ensure the design of all new corporate buildings and retail locations adheres to the Leadership in Energy and Environmental Design (LEED) standards and have worked with their partners to attempt to optimize transportation methods and related carbon output. It is worth noting that this program aims to mitigate greenhouse gas production within the product life cycle of their footwear line but has not been applied to their greater apparel lineup. Some initiatives do overlap as Nike’s dedication to sourcing 100% sustainable cotton also assists in the sustainability of apparel production. That being said footwear manufacturing is the main contributor to Nike’s overall carbon footprint at 57%, with a recent MIT study suggesting that the production of one pair of running shoes could account for as much as 30 pounds of carbon dioxide emissions. That is the same amount discharged through the operation of a 100-watt light bulb for one full week. These efforts have yielded a 2.8% reduction in total carbon emissions since 2011 and a 13% reduction in CO2 emissions on a per-unit basis for footwear during the fiscal year 2013, effectively allowing Nike to “...reduce [their] consumer and [their] businesses’ energy footprint, to enable both to thrive in tomorrows low carbon economy.” Nike is currently on pace to deliver on or beyond their goal of a 20% reduction in per-unit GHG emissions by 2015, already achieving a total 17% reduction against that benchmark and a 33% reduction against measurements taken in 2008.
Concurrently, a comprehensive business model and approach has allowed Nike Inc. to deliver on shareholder expectations while still striving to meet these lofty goals. A better planned and mapped supply chain does not necessarily need to be less cost effective, especially given the scope of Nike’s operations. Nike’s revenue growth since 2011 has “significantly outpaced” that of energy output and emissions. Since 2011 energy use has declined by 5% and carbon emissions by 2.8% in absolute terms, while profits have risen as much as 26% during that same period. A comprehensive infographic on how Nike has been able to deliver such high returns while still focusing on sustainability is provided below. An example includes a mentality shift towards ocean based shipping over express air. Water based shipping requires less fuel consumption which translates to cost. Although the voyage may take longer it is more cost effective when considering CO2 emissions associated with shipping via air. Nike is currently in the process of developing comprehensive baseline measurements for their apparel and equipment lines in order to make yearly comparisons for those business units moving forward as they continue to focus on delivering on two key objectives: 1) growing profits and 2) growing sustainability.
With a focus on sustainability Nike uses a comprehensive approach in addressing GHG emissions within avenues of the supply chain they either own or they influence. The materials scoring index as well as the supplier rating and verification systems both seek to address carbon emissions from avenues of the supply chain not directly within Nike’s control. They have also attempted to ensure the design of all new corporate buildings and retail locations adheres to the Leadership in Energy and Environmental Design (LEED) standards and have worked with their partners to attempt to optimize transportation methods and related carbon output. It is worth noting that this program aims to mitigate greenhouse gas production within the product life cycle of their footwear line but has not been applied to their greater apparel lineup. Some initiatives do overlap as Nike’s dedication to sourcing 100% sustainable cotton also assists in the sustainability of apparel production. That being said footwear manufacturing is the main contributor to Nike’s overall carbon footprint at 57%, with a recent MIT study suggesting that the production of one pair of running shoes could account for as much as 30 pounds of carbon dioxide emissions. That is the same amount discharged through the operation of a 100-watt light bulb for one full week. These efforts have yielded a 2.8% reduction in total carbon emissions since 2011 and a 13% reduction in CO2 emissions on a per-unit basis for footwear during the fiscal year 2013, effectively allowing Nike to “...reduce [their] consumer and [their] businesses’ energy footprint, to enable both to thrive in tomorrows low carbon economy.” Nike is currently on pace to deliver on or beyond their goal of a 20% reduction in per-unit GHG emissions by 2015, already achieving a total 17% reduction against that benchmark and a 33% reduction against measurements taken in 2008.
Concurrently, a comprehensive business model and approach has allowed Nike Inc. to deliver on shareholder expectations while still striving to meet these lofty goals. A better planned and mapped supply chain does not necessarily need to be less cost effective, especially given the scope of Nike’s operations. Nike’s revenue growth since 2011 has “significantly outpaced” that of energy output and emissions. Since 2011 energy use has declined by 5% and carbon emissions by 2.8% in absolute terms, while profits have risen as much as 26% during that same period. A comprehensive infographic on how Nike has been able to deliver such high returns while still focusing on sustainability is provided below. An example includes a mentality shift towards ocean based shipping over express air. Water based shipping requires less fuel consumption which translates to cost. Although the voyage may take longer it is more cost effective when considering CO2 emissions associated with shipping via air. Nike is currently in the process of developing comprehensive baseline measurements for their apparel and equipment lines in order to make yearly comparisons for those business units moving forward as they continue to focus on delivering on two key objectives: 1) growing profits and 2) growing sustainability.