Nike Climate Story


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  • Nike Climate Story

    1. 1. Innovate for a Better World <ul><li>Nike Climate Plan </li></ul><ul><li>September 27th, 2007 </li></ul>
    2. 2. Timeline G L O B A L N I K E 1992 Nike first learns about the global warming potential of SF6. 2003 Nike develops a baseline of inbound logistics and subcontracted manufacturing 1988 The World Meteorological Organization and the United Nations Environment Program establish IPCC 2001 (September) The IPCC releases its Third Assessment. Reaffirms warming trend and human impact 1995 The IPCC’s Second Climate Assessment is published,serving as the basis for Kyoto Protocol. 1997 (December) Kyoto Protocol adopted. 2005 (February) The Kyoto Protocol begins. The United States, refuses to ratify 2007 (Feb) IPCC 4th assessment 1997 (September) Nike commits to fully phase SF6 out of footwear and begins to transition some models to Nitrogen 2001 (October) Nike joins WWF Climate Savers. Sets CO 2 emissions reduction targets for owned operations and business travel. 2005 Nike exceeds WWF target of 13% reduction - reaches 18% CO2 reduction 2006 (June) Nike completes phase out of all f gases in Nike branded footwear 2007 (May) Nike sets new targets
    3. 3. 2001 MOU with WWF <ul><li>WHERE WE WORK & </li></ul><ul><li>MOVING PEOPLE: </li></ul><ul><li>Reduce carbon dioxide (CO 2 ) emissions 13% below 1998 levels by 2005. </li></ul><ul><li>Includes: </li></ul><ul><ul><li>CO 2 from Nike-owned facilities and business travel </li></ul></ul><ul><ul><li>Conserving energy, buying green power, and investing in community energy-efficiency projects </li></ul></ul><ul><li>MAKING PRODUCT & </li></ul><ul><li>MOVING PRODUCT: </li></ul><ul><li>Supply Chain CO 2 baseline—2003 </li></ul><ul><ul><li>Footwear and Apparel contracted manufacturing </li></ul></ul><ul><ul><li>Logistics </li></ul></ul><ul><li>Remove GHG from Products (pre-existing commitment) </li></ul>
    4. 4. COMMITMENT: Reduce carbon dioxide (CO 2 ) emissions 13% below 1998 levels by 2005. Achieved Goal FACILITY AND TRAVEL CO 2 SUMMARY 110,610 96,961 GOAL 103,996 26,312 (13,299) (8,143) 47,754 77,684 (17,475) 10,750 84,409 2005 120,448 31,755 (15,040) (4,000) 50,795 88,693 (8,259) 10,740 86,212 2004 89,812 (8,154) (46,263) 0 38,109 97,966 (3,637) 12,370 89,234 2003 121,868 20,952 (15,331) 0 36,283 100,916 (846) 12,493 89,269 2002 124,901 25,167 0 (5,067) 30,234 99,734 (771) 12,610 87,895 2001 128,816 26,277 0 (4,341) 30,618 102,539 (771) 13,157 90,152 2000 127,575 29,648 0 0 29,648 97,926 (450) 12,585 85,791 1999 127,138 30,177 0 0 30,177 96,961 0 12,364 84,597 1998 TOTAL CO 2 Total travel TCO 2 BETC Projects TCO 2 Travel Offset TCO 2 Travel TCO 2 Total Facilities GHG TCO 2 Green Power Facility Gas TCO 2 Facility Electricity TCO 2 YEAR
    5. 5. SF6 Elimination from Product <ul><li>Began R&D in 1995, Completed phase out in 2005 </li></ul><ul><li>Measured and verified by ERT </li></ul>
    6. 6. Our Climate Goals WHERE WE WORK MOVING PEOPLE MAKING PRODUCT (Footwear contracted manufacturing) Reduction Target TBA MAKING PRODUCT Apparel contracted manufacturing MOVING PRODUCT (Logistics to first point of distribution) 30% Absolute Reduction in CO2 footprint from 2003 Baseline by 2020 Tier 1 Tier 2 (2005) (2005) (2003 baseline) MAKING PRODUCT (Equipment contracted manufacturing) Nike Footprint: 1.36 m metric tons WHERE WE WORK Nike Brand Climate Neutral Facilities by 2011 Nike, Inc. Climate Neutral Facilities by 2015 MOVING PEOPLE Climate Neutral Business Travel by 2011 MAKING PRODUCT (Apparel contracted manufacturing)
    7. 7. Climate Counts
    8. 8. Moving People <ul><li>REDUCE </li></ul><ul><li>Invest in IT: Make virtual communication a viable alternative to travel </li></ul><ul><li>Build awareness of travel proliferation and environmental consequences </li></ul>USE RENEWABLE ENERGY N/A OFFSET Buy offsets for each flight HIGH Brand HIGH ROI HIGH Control <ul><li>Challenges: </li></ul><ul><li>Global growth and matrix structure makes meaningful communication and relationship building necessary. </li></ul><ul><li>On-site commercialization encourages developers and designers travel to factories. </li></ul><ul><li>Opportunity: </li></ul><ul><li>Rapidly increasing SG&A make travel reduction a financial priority. </li></ul>MOVING PEOPLE Nike Brand Climate Neutral Business Travel by 2011 Nike, Inc. Climate Neutral Business Travel by 2015 LOW CO2
    9. 9. Nike, Inc. rated a top commuter workplace by EPA Global HQ building awarded Oregon’s first LEED EB Gold Europe HQ runs on 100% renewable energy EMEA Dist. Center uses 6 windmills for all of its energy Global HQ purchases renewable energy credits for 100% of energy used Where We Work <ul><li>Nike energy consumption has not increased since 1998 despite a 25% increase in square footage. (USA) </li></ul><ul><li>2% absolute decrease with 6% growth in facilities. (Global) </li></ul><ul><li>Green power and “tags” grew from 1% in 2002 to 52% in 2007. </li></ul>
    10. 10. Where we work: Facilities and Retail HIGH Brand HIGH ROI HIGH Control <ul><li>Challenges: </li></ul><ul><li>Rapid growth of factory stores. </li></ul><ul><li>Many small NLO’s dispersed around the world. </li></ul><ul><li>Engage affiliates. </li></ul><ul><li>Opportunity: </li></ul><ul><li>LEED certified factory stores makes a statement in each community where a store is based. </li></ul><ul><li>Global presence lets us advocate for renewable and green design globally. </li></ul><ul><li>REDUCE </li></ul><ul><li>Energy Efficiency upgrades </li></ul><ul><li>LEED certified retail and offices </li></ul><ul><li>USE RENEWABLE ENERGY </li></ul><ul><li>Invest in Wind and Solar </li></ul><ul><li>Regional opportunities to buy green power directly from utility </li></ul><ul><li>OFFSET </li></ul><ul><li>Renewable Energy Credits (RECs) offset % of CO2 footprint </li></ul><ul><li>WHERE WE WORK </li></ul><ul><li>Nike Brand Facilities are Climate Neutral by 2011 </li></ul><ul><li>Nike, Inc. Facilities are Climate Neutral by 2015 </li></ul>MED. CO2
    11. 11. Moving Product HIGH Brand LOW Control <ul><li>Challenges: </li></ul><ul><li>Shrinking lead times and customer requirements make airfreight attractive. </li></ul><ul><li>Factories are located far from retail. </li></ul><ul><li>Fuel prices going UP </li></ul><ul><li>Constrained fuel availability in the future – Peak Oil scenario </li></ul><ul><li>Taxation and regulation on the increase </li></ul><ul><li>Opportunity: </li></ul><ul><li>Reducing airfreight aligns financial and CO2 objectives – ROI 2 </li></ul><ul><li>REDUCE </li></ul><ul><li>Airfreight discipline </li></ul><ul><li>Partner with logistics providers </li></ul><ul><li>Baseline our Outbound logistics footprint </li></ul><ul><li>Packaging redesign project </li></ul><ul><li>USE RENEWABLE ENERGY </li></ul><ul><li>Partners utilizing alternative fuels (i.e. biodiesel) </li></ul>OFFSET With regions, develop an offset strategy <ul><li>MOVING PRODUCT </li></ul><ul><li>30% Absolute Reduction in CO2 footprint from 2003 Baseline by 2020 </li></ul>HIGH CO2 MED. ROI
    12. 12. Making Product HIGH Brand LOW ROI LOW Control <ul><li>Challenges: </li></ul><ul><li>Heavy reliance on Coal in developing countries, especially China. </li></ul><ul><li>NIKE has indirect influence over energy reduction projects. </li></ul><ul><li>Financial returns are indirect. </li></ul><ul><li>Understanding of the complexity of embedded energy </li></ul><ul><li>Opportunity: </li></ul><ul><li>Suspect that current operations are inefficient. Lots of “low-hanging fruit” </li></ul><ul><li>Global presence lets us advocate for renewable energy and energy efficiency globally. </li></ul><ul><li>Greater understanding of carbon impact of raw materials </li></ul><ul><li>REDUCE </li></ul><ul><li>Baseline energy use in footwear factories </li></ul><ul><li>Leverage WHQ expertise in energy efficiency projects </li></ul><ul><li>USE RENEWABLE ENERGY </li></ul><ul><li>Research local options </li></ul>OFFSET <ul><li>MAKING PRODUCT </li></ul><ul><li>Footwear Reduction Target TBA </li></ul>HIGH CO2