Mar 13, 2024
by Karl Smith
Can Nike Change the Narrative on Sustainability?
by Karl Smith
Mar 13, 2024

Following on from the surprise news of Nike’s brutal and sustainability-gutting layoffs, the Oregon-based mega brand has also now released its yearly Impact Report.

An announcement with a distinctly more positive slant, the cynical view here would be to suggest that the report – which contains some genuine progress on the Earth-friendlier front – is some attempt at damage control. But, while it may well have that soothing effect, it’s important to note that the Impact dossier arrives this time every year – and that, sometimes, most times even, what may seem like conspiracy is just regular old coincidence.

This, then, is a chance – coming at either an opportune moment or quite the opposite, depending on your perspective – for Nike to reaffirm its commitment to the planet and to shore up its green credentials.

That being said, what exactly can be gleaned from the 210-page report?

First and foremost, what it shows is progress. And, while there is perhaps some sleight of hand on the top-line figures, the granular detail also shows a company moving in the right direction.

Two of the biggest headlines here concern, as you’d expect, focus on waste and on emissions – specifically the 69% absolute reduction in greenhouse gasses at owned and operated facilities, and an impressive 100% diversion from landfill with regard to Tier 1 manufacturing.

The 69% marks a further 4% on the numbers posted in the FY22 Impact Report and keeps Nike on target for its 2025 target of a 70% reduction, also seeing an increase in renewable energy usage at these facilities – now up to 96% from last year’s 92%.

It’s important to remember, however, that these are only Scope 1 and 2 emission – categories which exclude huge parts of the Nike value chain and, therefore, large emissions values as well.

That’s not to say it isn’t progress – it is. But it’s a more specific (and considerably less broad) level of progress than that 69% marquee number might suggest.

Also on the carbon front, it’s very much worth noting that Nike has already made its 2025 target – and then some – when it comes to emissions reduced through environmentally preferred materials, having cut CO2 release by 736,000 metric tons on a goal of 500,000 against the 2020 baseline; that’s a reduction of 37,000 metric tons on 2022 and a total of 832,000 for the year 2023.

When it comes to waste, however, there has been what looks like some stagnation: specifically, toward the target of 10% “waste reduction per unit in manufacturing, distribution, headquarters and packaging through improved design and operational efficiency,” where the FY23 report sits at the same 8% as FY22.

But, while the % may be unchanged, putting the 2025 target in question, it’s important to note that the actual data shows improvement. It may not be much, but FY22’s 269.4 grams of waste per unit has shifted positively, now measured at 268.5. It’s not a headline-worthy jump, but it is progress.

Now, about that 100% landfill diversion: much like the Scope 1 and 2 emissions issue, this only applies to Tier 1 manufacturing and only counts the most essential parts of the production process. This slight vagueness, however, doesn’t hide as much of an inconvenient truth as you might expect.

In fact, across Nike’s extended supply chain, 98% of waste is now diverted from landfill or incineration, up from 97% in 2022 and 2% up on the baseline number – positive change which puts the company on track to meet its actual 100% target by 2025.

Most impressively, the report also notes a third consecutive year of 100% footwear waste diversion and a non-consecutive 100% apparel waste diversion rate, increasing the overall recycling rate of footwear and apparel manufacturing from 60% to 64% in the process.

That 75% of this diverted waste is now recycled, mostly back into Nike – up 3% on 2022 and 7% on the 2020 baseline – is also no mean feat for a company of this magnitude. And, in this same vein, the figure of 17,900,000 units of finished product waste collected and recycled (or donated) is not only well above expectation – up from 3.1 million just last year – but also worthy of serious kudos.

What happens next remains firmly in the hands of the Beaverton brand. Capitalizing on these wins – and they are wins – and continuing the momentum is imperative for Nike, which now, more than ever, needs to show a serious commitment to reducing its impact and to proving that February’s layoffs aren’t indicative of a profit over planet mindset.

As always, we’re rooting for Nike – because, as always, we’re rooting for progress in an industry where it simply can’t happen without them.