NIKE, Inc (NYSE:NKE) released its fiscal 2007 to 2009 Corporate Responsibility (CR) report which outlines the next evolution of its CR strategy from a risk management, philanthropic and compliance model to a long-term strategy focused on innovation, collaboration, transparency and advocacy to prepare the company to thrive in a sustainable economy.

The company’s increased focus on Sustainable Business and Innovation (SB&I) will be more seamlessly integrated across Nike’s business strategies, creating a more sustainable approach aimed at providing greater returns to its business, communities, factory workers, consumers and the planet.

The report also details progress on Nike’s five-year CR goals and provides a comprehensive review of its CR efforts over the past three years.

“Sustainability is key to Nike’s growth and innovation,” said Mark Parker, NIKE, Inc’s, President and CEO. “Making our business more sustainable benefits our consumers who expect products and experiences with low environmental impact, contract factory workers who will gain from more sustainable manufacturing and our employees and shareholders who will be rewarded by a company that is prepared for the future.”

Recognizing the impacts of declining natural resources and the need to move to a low-carbon economy, Nike also uses the report to share its vision of reaching a closed-loop business model where the goal is to achieve zero waste in the supply chain and have products and materials that can be continuously reused – no pre or post consumer waste. This vision is designed to drive innovative and sustainable business processes and models.

“The link between sustainability and Nike as a growth company has never been clearer,” said Hannah Jones, Vice President, SB&I. “There are serious potential impacts of social, environmental and economic shifts on labor forces, youth sport, supply chains and products. This gives Nike the opportunity to use our power of innovation and our commitment to transparency and collaboration to tackle these complex issues.”

The report announces progress against Nike’s five-year targets set in 2007. The company has made sound progress on many fronts such as implementing Lean and Human Resource Management training in contract factories and reducing waste and toxics and increasing its use of environmentally preferred materials throughout Considered Design performance products.

The report also details where progress against other goals remains more challenging such as managing overtime in contract factories. Nike has also revised or clarified targets in a few instances due to a better understanding of the complexities of the issue or a change in strategy.

The CR report outlines some important initiatives for the company including:

1. Considered Design

Considered Design combines sustainability principles and innovative performance products for athletes by reducing or eliminating toxics and waste and increasing the use of environmentally preferred materials.

2. GreenXchange (GX)

GX is a web-based marketplace designed to share intellectual property which can lead to new sustainability business models and innovation. It is a system for capturing, sharing and licensing patents that, when used by someone else, could lead to unlimited innovation in helping solve current obstacles to sustainability issues. By making private intellectual property visible and usable, the aim is to accelerate the development of green innovation.

3. Lean and Human Resource Management (HRM)

Nike has been working with contract factories to train them in the implementation of specialized Lean manufacturing and HRM. Lean principles put the decision making closer to the worker through skill building, teamwork and understanding quality over quantity. HRM builds the factory’s managerial capacity and helps them value an empowered workforce. While only one aspect of Nike’s work with contract factories, it is an important pillar of Nike’s strategy to build a more lean, green, empowered and equitable supply chain.

4. Sport for Social Change

Nike has furthered its strategy of using sport as a powerful movement for social change. Sport is undervalued for its capacity to build networks of social entrepreneurs and community innovators and for its ability to drive positive social, economic and cultural change. One powerful example of a program Nike partners with is Grassroot Soccer in Africa. It is a community program which is directly addressing a dire social need through raising awareness and education of HIV/AIDS by enabling young people to make informed decisions, using sport as a catalyst to engage and communicate to boys and girls.

5. Energy and Climate Change Strategy

In 2009 Nike instigated the formation of new coalition of consumer companies called Business for Innovative Climate and Energy Policy (BICEP) which is advocating for strong U.S. climate and energy legislation with the aim of creating a level playing field through a cost on carbon and unlocking innovation that is essential to creating technology and infrastructure solutions. Nike aims to be ahead of the curve of mandatory regulation, energy price increases and volatility and consumer pressure.

In addition, in 2008 Nike launched a footwear energy efficiency program with five contract manufacturers. Nike’s commitment to collaboration on this project has shown excellent early results: the contract factories absolute CO2 footprint was down 6 percent despite a 9 percent increase in production.

Nike’s corporate responsibility report, available online at nikeresponsibility.com, provides greater detail on progress against targets and provides a comprehensive review of the company’s efforts for fiscal years 2007, 2008 and 2009.

www.nike.com – www.nikebiz.com.

To review Nike’s FY07-09 CR Report, click here

The government today committed to consult on the introduction of display energy certificates (DECs) which show the energy use of shops and offices. Responding to the Committee on Climate Change’s First Progress Report, ministers said that DECs should be rolled out to give everyone a better understanding of carbon emissions.

It is significant because a DEC is based on actual energy use, meaning that even if a top brand occupied a state of the art, A-rated green building, if it wasted heat by leaving he doors open or left the lights on all night, it would get a poor rating. The BPF has said that mandatory DECs would help to focus both owners and occupiers on efficient use of the building, which could save around a third of energy bills.

Currently, such certificates are only required for public buildings over a certain size.

Patrick Brown, assistant director for sustainability said:

‘The BPF has long been campaigning for a roll-out of display energy certificates and today’s announcement is very welcome. It is vital that we motivate both owners and occupiers to use buildings effectively. Building up energy performance data on buildings would allow us to easily benchmark and compare properties and would also give the public a greater insight into how well their own offices or chosen retailers are performing.”

The bio-crude oil can be used to produce high value chemicals and biofuels, including both petrol and diesel replacement fuels.

“By making changes to the chemical process, we’ve been able to create a concentrated bio-crude which is much more stable than that achieved elsewhere in the world,” says Dr Steven Loffler of CSIRO Forest Biosciences.

“This makes it practical and economical to produce bio-crude in local areas for transport to a central refinery, overcoming the high costs and greenhouse gas emissions otherwise involved in transporting bulky green wastes over long distances.”

The process uses low value waste such as forest thinnings, crop residues, waste paper and garden waste, significant amounts of which are currently dumped in landfill or burned.

“By using waste, our Furafuel technology overcomes the food versus fuel debate which surrounds biofuels generated from grains, corn and sugar,” says Dr Loffler.

“The project forms part of CSIRO’s commitment to delivering cleaner energy and reducing greenhouse gas emissions by improving technologies for converting waste biomass to transport fuels.”

The plant wastes being targeted for conversion into biofuels contain chemicals known as lignocellulose, which is increasingly favoured around the world as a raw material for the next generation of bio-ethanol.

Lignocellulose is both renewable and potentially greenhouse gas neutral. It is predominantly found in trees and is made up of cellulose; lignin, a natural plastic; and hemicellulose.

CSIRO and Monash University will apply to patent the chemical processes underpinning the conversion of green wastes to bio-crude oil once final laboratory trials are completed.

The research to date is supported by funding from CSIRO’s Energy Transformed Flagship program, Monash University, Circa Group and Forest Wood Products Australia.

National Research Flagships

CSIRO initiated the National Research Flagships to provide science-based solutions in response to Australia’s major research challenges and opportunities. The nine Flagships form multidisciplinary teams with industry and the research community to deliver impact and benefits for Australia.

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