Our Carbon Footprint and Our Next Steps

sustainability

Our Carbon Footprint and Our Next Steps

April 13, 2021

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NIKE, Inc. Chief Sustainability Officer Noel Kinder on ambitious climate targets and our strategies to meet them.

'When I think about the global climate crisis and the role of a company like Nike, I think about our mission and values.'

Over the years, I've seen sustainability shift from a matter of compliance into a core value at the heart of Nike. Since starting my role as Chief Sustainability Officer, I've been blown away by the energy and passion that teams all across the company bring to helping protect our planet.

But we don't yet have all the answers. And when it comes to some of our most ambitious goals, we have a lot more work to do to close the gap.

In the global race to reduce greenhouse gas emissions, we're partnering across our industry and beyond to create solutions. For a full breakdown of Nike's carbon footprint, check out our FY20 Impact Report.

The science is clear. To protect the future for athletes everywhere (and if you have a body, you are an athlete), everyone needs to do their part in keeping global warming below 1.5°C. To do that, the world's greenhouse gas emissions need to be cut by half this decade, and we need to reach net-zero by 2050.

That's why Nike joined the Science Based Targets initiative, which calls for business to lead the way toward a zero-carbon economy. By 2030, our commitment is to reduce greenhouse gas emissions by 65 percent in our owned or operated spaces, and by 30 percent across our extended supply chain.

At our scale, it's an ambitious goal, and many of our toughest challenges still lie ahead. But with clear targets and clear strategies, ambitious does not have to mean aspirational.

Over the next five years, we will work to reduce our carbon footprint by focusing on:

• Low-carbon materials: Reducing 0.5 million tons of greenhouse gas emissions by increasing our use of environmentally preferred materials to 50% of all key materials.
• Decarbonizing our supply chain: Bending the curve of greenhouse gas emissions from key suppliers' operations, flatlining at 2020 levels or below despite anticipated business growth, through renewable energy, energy efficiency, and alternative fuels.
• 100% renewables: Driving 70% absolute reduction of greenhouse gas emissions across our owned or operated facilities through 100% renewable electricity and fleet electrification.

70 percent of Nike's carbon footprint comes from the production, manufacturing, and finishing of the materials that make up our products. That's why we're accelerating research and development around new sustainable materials, while bringing low-carbon alternatives to market at scale.

As we move forward, we'll draw on lessons learned from our journey so far - including setbacks as well as breakthroughs.

Looking back over the past five years, for instance, we fell short of meeting our FY20 carbon reduction goals. Despite reducing material waste and expanding renewable energy, we faced challenges with shifts to more complex materials and product designs, inbound airfreight, and changes to the electric grid in some of our primary manufacturing regions. In relying on aggregate metrics, such as average product carbon footprint, we missed opportunities to sharpen focus on our biggest carbon 'hotspots.'

So, we're changing our approach. Through our 2025 carbon targets, we're stepping up with more clarity and precision. Across the company, our teams are pulling together with surgical focus on our biggest challenges - and our biggest opportunities: sustainable materials, renewable energy, and energy efficiency.

We know that materials matter, for instance, because they account for 70 percent of our carbon footprint. We're rising to the challenge by accelerating research and development around sustainable materials, and exploring opportunities to bring low-carbon alternatives to market at scale.

We're also pushing deeper into our extended value chain, which generates the vast majority of our greenhouse gas emissions, to slow the trajectory of emissions - even as our business grows. To do this, we're teaming up with suppliers, industry partners, and even competitors to invest in solutions such as solar power and alternative fuels. (By contrast, if we were to follow a 'business as usual' approach, our analysis shows that our emissions would increase over 30 percent by 2025.)

And all across Nike, we're raising the bar for accountability with annual benchmarks; quarterly scorecards; and for the first time, executive compensation tied to our progress.

'To drive real change, our climate goals can't just be words on a page. They have to move us into action.'

To drive real change, our climate goals can't just be words on a page. They have to move us into action. They have to shift how we think, plan, operate, and adapt. Most of all, they have to hold us accountable.

That's why we're sharing our next steps here, and it's why we'll continue sharing our journey as we go. Every company has a footprint. Our goal is, and always will be, that Nike's footprint helps to shape a better world.

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