Facilities and Travel

Our Approach

We began our path toward climate neutrality with an ambitious target made in 2001: to achieve a 13-percent reduction in emissions from our owned facilities and business travel from 1998 through 2005. We met that target, and more, achieving an 18-percent reduction.

Since that time, we have continued to track and reduce our footprint. We have accomplished this through energy efficiency measures as well as carbon offsets and Renewable Energy Certificate (REC) purchases.

Currently, there is substantial scrutiny of the use of RECs, in particular related to whether they in fact help create new renewable power, or whether they are simply payment to a project that would have existed anyway. We have operated under the belief that our purchase of RECs has been in good faith and that we are helping create incentives for the production of renewable energy through the use of these certificates. Moving forward, however, our preference is to achieve climate neutrality through a combination of energy efficiency and the purchase of more direct forms of renewable energy, through on-site applications and other means. During FY10 we will be exploring a range of new options.

We historically tracked our facilities information on a calendar-year basis but have transitioned to fiscal year in FY09 for comparability with our other tracking and reporting.

Facilities

In FY09, we saw a 15-percent decline from FY07 in the carbon impact of our owned facilities, while the reported square footage of the reported facilities grew by 41 percent. Savings realized through energy efficiency projects such as HVAC and lighting systems at NIKE, Inc.'s World Headquarters in Oregon funded the purchase of RECs.

CO2 Emissions (tCO2) at NIKE, Inc.-Owned Facilities (>20,000 square ft)

* Facility data includes information from WHQ, U.S. Niketown retail stores, and Nike's 10 larger DC's over 20,000 square feet. FY09 includes energy data from additional DC's (Japan, Northridge, Mexico, Canada, Golf and Cole Haan).

The net carbon impact of NIKE, Inc.'s owned facilities from FY07 to FY09 declined 15 percent even as the reported square footage of facilities grew 41 percent.

Business Travel

From FY07 to FY09, we saw a 7-percent increase in emissions from business travel. In 2008, we counterbalanced 37 percent of those emissions through offsets we purchased from Climate Clean.

In FY09 we made a strategic decision to move away from offsets and instead focus on reducing miles flown. Nike is a global company, and our deep connections with employees, customers and suppliers around the world are a key part of our success. While reducing miles flown and maintaining these deep connections may seem at odds, we feel investing in teleconferencing and remote meeting capabilities is a solution that presents a number of potential benefits:

In FY10 we are increasing our investment in new teleconferencing systems by 15 percent over FY09. By FY11 we anticipate a total of 200 videoconferencing systems in Nike offices around the world.

NIKE, Inc. Business Travel CO2 Emissions (tCO2)

Data captured by Nike's global travel vendor and includes global business travel. Business travel emissions were externally verified by David Shearer, chief scientist at California Environmental Associates.

NIKE, Inc., emissions from business travel increased 7 percent from FY07 to FY09. The net impact increased 88 percent from FY07 to FY09 with the cessation of travel offset purchases in FY09.

Performance Highlights

Travel Program

From 1998 through 2008, even as NIKE, Inc.'s business grew, we kept CO2 emissions from business travel at 1998 levels, largely by purchasing offsets. During that time, we offset 41 percent of all business travel by purchasing 179,000 tonnes of CO2 offsets. In FY09 we changed our approach. While we achieved a decline in CO2 emissions from travel before offsets between FY08 and FY09, our net impact grew.

Corporate Facilities

Efforts made at NIKE, Inc.'s world headquarters in Oregon and in other key locations continue to showcase innovative examples of energy savings and renewable technologies. Some highlights completed during FY07-09 include:

Distribution Centers

In FY09 we updated our distribution facilities; decommissioning an older facility in Oregon and opening a new facility in Tennessee (Northridge). The new facility was designed for sustainability and has been awarded LEED Silver certification by the U.S. Green Building Council (USGBC). This facility features many environmental innovations, including:

Where possible, we are retrofitting existing apparel and footwear distribution facilities in Tennessee with improvements demonstrated in the Northridge facility. The results from sustainability projects from FY06 to FY09 at U.S. distribution centers are an achievement considering a 23-percent net increase in square footage: energy consumption levels increased only 3 percent, CO2 emissions increased 5 percent and carbon intensity (CO2 emissions per unit processed) improved 14 percent.

We now operate four distribution facilities in the U.S. that collectively have a much higher capacity for growth. We saw significant reductions in each of our centers, due to projects aimed at reducing our consumption of energy and other resources.

Retail

Nike-owned retail, including Niketown and employee stores, has also made progress, though our tracking to date does not incorporate factory stores. In Nike retail stores, we have worked to adopt and incorporate energy-efficiency measures in both newly-built and existing facilities.

In Houston, we built a new Niketown to LEED-CI (commercial interiors) certification standards. Measures incorporated into the design and construction delivered sizable reductions from standard plans: 45 percent less water use and 25 percent less energy. In addition, 96 percent of construction waste was recycled and we used low-VOC paint and finishes throughout. We are beginning to apply what we have learned to other newly-built Niketown and factory stores.

We participated in the LEED-CI for Retail Portfolio program with the goal of integrating LEED standards into our factory store construction program. We are still working to fully integrate LEED documentation requirements into the program and are continuing work with our key partners to implement the program across the U.S.

Eventually we hope to share learnings across the range of brands in the NIKE, Inc., portfolio to apply to other retail settings.

Information Technology

We began looking at information technology (IT) separately from facilities in FY08. Our strategy for technology is two-pronged: run NIKE, Inc.'s information technology business unit more sustainably and use information technology as an enabler for the rest of Nike to achieve their sustainable business goals. We are still developing our overall strategy. We know that running IT more sustainably means addressing two main categories: data centers and end-user computing. Some efforts in FY07-09 include:

Over the next two years, we will explore a number of areas including education across all of NIKE, Inc. IT on sustainable business thinking in process and technology, partnership with procurement in surveying major suppliers on their sustainability practices, establishing standards for computer purchases and continued efforts at data centers and in printing.

On the Horizon

We have reexamined our goal of climate neutrality in light of the following: