Nike defines Environmentally Preferred Materials (EPMs) as materials that have significantly lower impact on the environment in one or more categories of chemistry, energy, water or waste. We can only achieve sustainable products if we address the materials used to make product. Therefore, we weigh the use of EPMs heavily in our product index system. Shifting to greater use of EPMs requires close partnership with suppliers to ensure they deliver against all of Nike's needs, including aesthetics, performance, price and compliance, as well as sustainability.
To bring more sustainable products from design to consumer we face a number of challenges, ranging from the variety of materials used to managing resulting waste. For each challenge, we have assessed the risks involved and have developed and applied an appropriate approach that seeks ways to reduce consumption of materials and handle them responsibly throughout the manufacturing process.
One way to optimize the use of materials is to continually assess and reduce the overall number used in our products. This focus also helps to manage cost and complexities in both the design phase and the supply chain. Replacing traditional materials with EPMs is rarely a straight-across exchange. It requires understanding characteristics of the material as well as its availability. Just because we find a material that works does not mean it is available at the quantity and price when and where we need it.
To define Nike EPMs and quantitatively evaluate and rank our material choices, we developed a Material Analysis Tool (MAT) based on lifecycle thinking. Each material is assigned a numeric value that translates into a sustainability score for our products. The MAT framework is comprised of a set of environmental impact questions, in four categories:
Just as we did with our Considered Index tool, we have opened access to our MAT tools to help us define and measure sustainability of material choices and finished product. Our goal is to encourage collaboration across our industry and accelerate the use of EPMs.
We have simplified our complex metrics-based Material Analysis Tool (MAT) into a color-coded version that is accessible online. The red-yellow-green coding of environmental impacts provides an easy way to identify life cycle phases in which materials have relatively low impacts (green) or areas of opportunity for focused research and improvement (red). This version of MAT was completed in 2007 and is the basis for scoring environmentally preferred materials for apparel. We are currently working on the next version of MAT, which will include criteria that drive our material choices and move our supply partners toward our North Star goals.
In FY09 we developed and released Nike Considered Suppliers' Guide to Environmentally Preferred Materials (EPMs) that guides suppliers' research and development efforts for Nike EPMs. Common understanding helps us jointly set and manage EPM goals with our suppliers. The guide educates suppliers about Nike-defined EPMs, our goals and the metrics we use. The guide also explains Nike's expectations of our material supply partners and provides additional resources that suppliers can access to learn more about EPMs.
Early in FY09 we shared the Guide with our material managers and key external suppliers. Response has been very positive and has sparked additional dialogue about materials, our goals and the suppliers' own approaches. Based on feedback, we updated the Guide and have issued it broadly - at strategic meetings, through direct supplier contact with material managers and through our supplier Web site.
We defined and discussed a range of EPMs in our FY05/06 Corporate Responsibility Report. Here, we have updated some of the more significant materials -organic cotton, recycled polyester, leather, environmentally preferred rubber, PVC and phthalates.
Organic cotton is a natural fiber grown and harvested without the use of synthetic chemical pesticides, fertilizers and defoliants. It looks, feels and wears just like conventional cotton. Using organic cotton is a natural fit for Nike as we continually look for ways to integrate environmental responsibility in our products.
Since 1997, when we sourced 250,000 pounds of certified organic cotton, we have steadily increased the use of organic cotton in our materials. Nike set a long-term goal in 2001 of blending a minimum of 5 percent organic cotton in all cotton-containing apparel products by 2011. We are currently on track to achieve this ambitious goal. Based on estimates for FY09, 86 percent of the cotton-containing apparel we produced contained a minimum of 5-percent organic cotton. More than 14 percent of the cotton we used globally was organic, representing more than 21 million pounds of organic cotton fiber. This figure ranks Nike as the third-largest retail user of organic cotton in the world, according to the Organic Exchange, an NGO committed to increasing production and use of organically grown fibers.
Nike's support of organic cotton as a positive alternative to conventionally grown cotton remains strong. Looking to the future and ways we can continually increase our use of organic cotton, we have reset our blended organic goal and have initiated communication with our suppliers to begin making the transition.
Our refocused effort is to move to a minimum blend of 10 percent organic cotton in all cotton-containing apparel products by 2015. We have challenged ourselves by doubling the blend requirement in half the time required of our original goal. Benefits of our blended approach continue to be: ease of participation across our cotton supply base and product categories, planned and thoughtful increase in organic cotton demand over time, and growth that keeps pace with supply. Nike was the first major brand to adopt a 5-percentblended organic cotton goal. Since the yarn suppliers that we use to create the blends also supply to a wide variety of other brands, the 5-percent organic blend became the standard for the industry. We expect that the same will happen as we move to 10-percent organic cotton blend. Our greatest impact will be the change that we drive within the industry.
In addition to our blended organic goal, we continue to strategically expand our offering of 100-percent certified organically grown cotton apparel products across our range.
Nike's organic cotton supply chains use third-party accredited auditors to certify that the cotton has been grown and harvested according to recognized organic growing standards.
The organic cotton used in Nike products is sourced through supply chains across the globe, with sourcing primarily from China, India, Turkey and the United States. Details about organic agriculture standards, certification and accreditation can be found at: .
We have incorporated recycled polyester into Nike's products for more than five years. Recycled polyester use results in fewer environmental impacts compared to virgin polyester because of reduced energy use, raw material extraction and less waste going to landfills or incineration. Nike's use of recycled polyester has grown 15-fold from FY05 to FY09. The number of Nike garments containing recycled polyester increased from 3,000 in FY04 to nearly 5.5 million in FY09 and included products designed for and inspired by the Olympics.
Nike is the one of the world's largest users of white leather for footwear. Waste from cutting leather constitutes one of our largest solid waste streams and we continue to seek ways to use this material as efficiently as possible.
Recognizing our impact in the athletic footwear industry, we collaborated with tanners and other footwear brands and retailers to establish the Leather Working Group (LWG) in 2006 (facilitated by BLC Leather Tech). The environmental assessment protocol developed by this group was peer reviewed in FY06. The LWG protocol was specifically developed for footwear tanners and is aimed at ensuring compliance and promoting best stewardship practices in the industry. In FY07, we actively supported the launch of the LWG protocol by recommending its use to tanners in our supply chain.
As of FY08, 14 footwear tanners had been audited against the protocol, representing approximately 25-percent of tanners in the Nike supply chain. In FY09, we mandated LWG screening of all of our tannery suppliers. Screening will help us to identify suppliers that meet our threshold for environmentally preferred leather manufacturing practices. By the end of FY09, 48 percent of Nike tanneries had completed the screening process.
At the end of FY09, Nike, in collaboration with our leather suppliers, created a sourcing policy related to supply chains to exclude hide sourced from within the Amazon Biome. This policy addresses the Greenpeace findings that Amazon deforestation is driven by cattle production. (See Nike Press Release for more on this)
In 1998 Nike began researching environmentally preferred rubber and developing formulations that could be applied to footwear. By 2002, that work was ready for commercial use and was making its way into limited shoe production.
In FY04 Nike launched the first environmentally preferred rubber formulation for use in footwear products. We shared our formulations with the industry at the International Conference on Green and Sustainable Chemistry/9th Annual Green Chemistry and Engineering Conference. By FY07 we had expanded to three environmentally preferred compounds with different properties to meet a range of sport performance requirements for other products. In FY09, 76 percent of Nike shoes contained environmentally preferred rubber, up from 3 percent in FY04.
Nike has been actively working to remove PVC from product since the late 1990s. By FY06, few PVC-containing product types remained in our apparel portfolio, and these were limited to screen print inks.
In FY09 we began implementing a detailed phase-out plan to eliminate PVC-containing screen-prints with alternative, non-PVC inks. We are working with printers and their ink suppliers to innovate, and new products are in development globally, particularly in the area of special effects inks. New regulations around use of phthalates have helped to expedite the phase-out and encourage new processes.
We require all contracted factories to test 10 percent of all screen prints strike offs and to begin random testing of screen print ink systems. Our phase-out process includes targets to eliminate PVCs and phthalates in all flat inks by FY10, and eliminate from all inks and all products in FY12.