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CR Strategy

A New Model and Shift to Sustainable Business and Innovation

During FY07-09, Nike announced and executed its shift to focus on categories of sport, prompting a company-wide organizational review. We completed a major reorganization at the end of FY09 and emerged a flatter, simpler organization aligned across geographies, categories, functions and retail. This new structure prepares Nike for the future by aligning our greatest strengths against our biggest opportunities.

As part of the review, we focused on two key areas for advancing "corporate responsibility" as part of this business plan.

  1. Help the company fast- track integration of corporate responsibility into its business
  2. Develop scalable solutions to enable Nike's evolution to a closed-loop business model

To support Nike's strategic evolution and better enable Nike to transition to sustainable business models, we have transformed the corporate responsibility function into something altogether different. It's now called Sustainable Business and Innovation (SB&I). SB&I's mission is to enable NIKE, Inc. to thrive in a sustainable economy.

How We're Organized

We formed SB&I from several separate functions: the former Corporate Responsibility team, and the Lean, Energy and Compliance teams that work with our suppliers. SB&I focuses on our key business priorities - sustainable products, sustainable manufacturing and sustainable marketplaces - and on elements of our strategy. We do this through a matrix structure, with defined priorities for each team. The SB&I function reports to our vice president of Sustainable Business & Innovation, who reports directly to the NIKE, Inc. CEO and to the Corporate Responsibility Committee of the Board of Directors.

The SB&I team is made up of about 130 people who work closely with dedicated sustainability specialists who are integrated into other parts of the organization, such as retail, logistics and information technology.

Our Strategy

Our vision for SB&I is to enable NIKE, Inc. and our consumers to thrive in a sustainable economy, one where people, planet and profit are in balance. To do this, we will:

  • Innovate to deliver enterprise-level sustainability solutions
  • Integrate sustainability into the heart of the NIKE, Inc. business model
  • Mobilize key constituents (civil society, employees, consumers, government and industry) to partner in scaling solutions

Building on what we've learned on our corporate responsibility journey, we're thinking in new ways about each element of our strategy.

Innovate

NIKE, Inc.'s corporate responsibility strategy draws heavily from insights we've gained from our rich experience with innovation. Over the last three years, we have used these insights to experiment with innovative sustainability solutions including our Considered Design ethos, which has enormous potential to drive sustainability best practices throughout NIKE, Inc. and our industry. Our long-term vision for Considered is to design products that are fully closed loop: products produced using the fewest possible materials, designed for easy disassembly and capable of being recycled into new products or safely returned to nature at the end of their life. In the spirit of collaboration, during FY10, Nike intends to share our Considered Index with the intention of creating industry-wide scale.

Our challenge now is to innovate consistently and systematically throughout our business; from design to manufacturing to marketplace to recapturing, recycling and reusing. To bring discipline and focus to this quest for systemic change, we've created our "Innovation Lab" with the mission to deliver enterprise- and industry-level sustainability solutions.

Integrate

Integrating corporate responsibility into the Nike business has been a consistent effort since 2004. Integration requires everyone in the company to share a common understanding of Nike's corporate responsibility challenges, approaches and vision. In essence, it requires a cultural change that inspires employees across the organization to consider how they can contribute to building a more sustainable organization. We are seeing some success. For example, our procurement function, which buys products and services for our corporate operations, is developing a system to rate suppliers' sustainability performance and include these ratings as a factor in making buying decisions.

Most importantly, we have continued to push further into upstream decision making, realizing that the more integrated sustainable thinking is at the point of strategic intent, the greater the impact. Today we are proud to see sustainability as a core component of NIKE, Inc.'s growth plans and corporate strategy and as a key priority for each of our affiliate companies.

Mobilize

Considering the size, scope and complexity of the systems that create the world we live in, it is clear that collaboration is imperative to future success. Investment in innovation will realize the greatest returns if the results are shared and brought to scale - within Nike and across industries. As we've learned, without scale we simply cannot achieve systematic change. And scaling innovation means mobilizing those we touch - our employees, consumers and business partners - and collaborating with others who are committed to innovation.

Consider our efforts to improve working conditions across our supply chain. We have made incremental improvements, but real, long-term solutions lie in changing systems. Systemic change requires fundamental shifts in working conditions across the entire apparel and footwear industry. The work of a single brand or manufacturer is not enough. Yet, as an industry leader, we can begin to change the behaviors and expectations of those who work in the industry through influencing policy and encouraging collaboration between civil society, industry and government.

We've also determined that we need a concentrated focus on collaboration, open source platforms, advocacy and consumers - all of which are required to create real system change. Our early work in each of these four areas has built our capabilities and understanding of creating scale. These include:

  • New forms of collaboration. We are part of the International Labour Organization's Better Work program, which provides a forum for developing a coordinated approach by multiple companies to improve conditions in their shared supply chain. Working with member companies, we hope to achieve improvements on a greater scale than our individual initiatives
  • More platforms. We have been working with Creative Commons as well as other brands to build a digital platform that enables the sharing of sustainability innovations on a global scale. Scheduled to launch in FY10, the GreenXchange creates a collaborative network promoting the creation and adoption of technologies that have the potential to solve important global problems and industry-wide sustainability challenges
  • More advocacy. We've helped create coalitions to advocate for key policies that will enable scale. For example, Nike is a founding member of Business for Innovative Climate and Energy Policy (BICEP). Through BICEP, we have committed to calling for strong U.S. climate and energy legislation to spur the clean energy economy and reduce global warming pollution. We're advocating for the World Bank, International Finance Corporation and other global institutions to create safety nets for supply chain workers displaced due to the global recession
  • Engaging consumers. Through our brand, we have a powerful position of influence with young people. To help inspire consumers to take action around sustainability, we launched nikegamechangers.com, a digital platform for engaging and empowering consumers to join us and others in tackling social and environmental issues. Through this and other means of engagement, we hope to strengthen our relationships with consumers and help to multiply the impact of their individual actions

Our SB&I structure, which creates a dedicated team to build on these initiatives and use these tools to scale innovation across Nike, our industry and our global communities.