Waste

Footwear Target

Stated as FY07 baseline and 155 gpp target in FY05/06 report. Reviewing data and matching reduction target and percentages revealed an error. Target should be, and has been restated as, a comparison to the FY06 baseline.

Apparel Target

Packaging Target

Point of purchase means the packaging the consumer takes home with the product. The vast majority of our consumer packaging is corrugated cardboard, this caused us to focus the 2007 reduction target on corrugated cardboard point-of-purchase packaging, where our standard shoebox is already composed of 100-percent recycled cardboard. Corrugated cardboard is also used for all shipping packaging. We have now expanded on the original target to include a reduction in the weight of shipping cartons

Background

We define waste as any product or material purchased anywhere in the supply chain that does not ultimately end up in the consumer's closet. This definition includes non-product waste (such as packaging), manufacturing waste (such as scrap material in contract factories) and product waste (such as samples).

By reducing this waste, we believe we can both considerably reduce our impact on the environment and realize significant cost savings. We focus on both reduction and reuse/recycling in eliminating solid waste.

Waste is created at every step of our supply chain. No individual or Nike group oversees all waste streams from corporate offices to manufacturing to shipping and retail.

In FY06, we began to understand the physical waste across our entire company by performing a waste mapping study of more than 100 sources. We found that nearly 75 percent of all waste came from parts of the supply chain outside of the factory. When measured by weight, we found that more than 40 percent of the materials and products that we buy ended up as waste by our broad definition.

Our Waste Picture

Nearly one-third of our waste footprint comes from retail packaging and the same amount from shipping manufacturing. Nike is focusing effort on reducing all waste streams, especially in the greatest areas of impact.

This analysis has helped us understand our waste impact and set targets for reduction in the areas that have the greatest impact. We incorporate waste measures into our Considered Index, assessing the waste of each product and providing guidance and tools for reducing it. In FY05/06, we shared targets for reductions in footwear manufacturing and packaging, two of our greatest areas of impact. In FY07-09 we increased our focus further on high-volume materials to concentrate our reduction efforts on those items that have the most impact.

Waste Management Centers

Knowing the value of measuring and managing waste streams, we have worked with contract manufacturers to help them play an active part in assessing waste from their processes and understanding the lost value represented by waste. Beginning in 2000, we led the development of waste management centers near clusters of contract factories, which we began in 2000. We did this to provide critical mass for efficient recycling of wastes that could not be reduced or reused in factories.

By FY06, five waste management centers operated in four countries, serving more than 85 percent of Nike-contracted footwear factories in Asia. The waste management centers consolidate more than 50 factory waste materials that are shipped back to the materials vendors to be recycled back into the materials that we buy. Waste rubber from making shoe outsoles and foam-backed materials are processed and shipped to sports surfacing manufacturers. New recycling markets are continually being investigated to divert even more waste from shoe production to more sustainable uses.

Solutions in Design

We have found it is more effective to reduce waste at the design stage rather than use resources to manage unneeded materials downstream in the supply chain. In apparel, for example, waste reduction is achieved largely through increased efficiency in pattern cutting at the factory. Products that achieve waste reductions score points in the Considered Index tool, boosting their overall score. Reducing designed-in waste also cuts costs and the quantity of waste materials created.

Designers have also found ways to reduce packaging by using less and different materials. In some cases, such as sunglasses, we have found ways to reduce both packaging material costs and the end-of-life recycling costs - a clear example of an exponential return on investment.

We continue to look for solutions that can be applied across our products, and can be tested and proven. We also aim to find solutions that offer clear cost savings.

Closed-Loop Materials

The waste management centers consolidate factory waste of more than 50 materials that are shipped to the materials vendors to be recycled back into the materials that we buy. Nike has worked with seven vendors to create closed-loop materials used in footwear manufacturing including heel counters, toe boxes, strobels and lining. Between FY06 and FY09, closed-loop materials and take-back programs within footwear increased by 51 percent, to a total of more than 4.6 million kilograms. In FY09, 11 percent of manufacturing waste was recycled back into closed-loop materials in FY09.

Recovered Product: Nike Reuse-A-Shoe

Nike processes defective returns, counterfeits and post-consumer shoes into Nike Grind, a material used to resurface playing fields. Since Reuse-A-Shoe was established in 1990, we have recycled more than 23 million pairs of shoes and contributed to 320 sport surfaces.

We are seeking ways to improve the viability of recycling used and defective shoes. The volume of processing is limited and the cost of collection and shipping can be high. We are exploring new partnerships and technologies that will make the process more efficient. The recycling of used shoes will continue to improve as designers use fewer materials. We are hopeful that other brands in the industry follow Nike's lead in adopting Restricted Substance Lists, reducing the toxicity of materials going into footwear and making their way into Nike Grind.

Footwear

Representing 17 percent of our overall waste footprint, footwear manufacturing has potential for improvement. Some highlights of our performance include:

Solid Waste and Waste Management Efforts in Footwear

Footwear Waste Management Methods (gpp)

Solutions in Systems

Our approach to identifying and addressing all types of waste has led to systems improvements as well. The Considered ethos is not only removing waste from product design but is also helping Nike examine waste at every step of our business processes.

What we learned from our packaging and corrugated cardboard project caused us to rethink the shoebox. But we also applied that thinking to our business systems. We began to look at our purchase of corrugated cardboard across Nike, not only in footwear but in apparel and equipment, and not only in Nike-branded product but across our affiliates. In each of these areas, we purchased various cardboard products separately for different needs.

We came to see that, viewed together, corrugated cardboard was one of NIKE, Inc.'s largest materials purchases. By buying separately, we failed to share developments in design and waste reductions, and unnecessarily limited the scale to which we could apply new findings and approaches.

Combining these areas and purchasing cardboard as a commodity we believe will allow Nike to achieve scale and to influence our supply chain to consider using new materials and lighter-weight construction.

On the Horizon

Our experience in measuring, managing, recycling and eliminating proves what we've said before regarding our sustainability efforts: there is no finish line. We can always improve. We can continually improve every process: in design we can use materials more efficiently; in packaging we can further reduce or find ways to eliminate over time. These are incremental improvements. We also continue to work on more radical approaches to reach our North Star: What are the ideal materials, ones that can be created in ways that allow them to become the feedstock for future products? How can we get just the pieces and parts that we need, without cutting them from a roll of material? What closed-loop systems are needed in a society where waste is not acceptable and how do we help to develop them? We are asking these questions and seeking out answers, in our business and in our industry to help move toward a sustainable society.

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