November 19, 2011

Nike Roadmap Toward Zero Discharge of Hazardous Chemicals

NIKE, Inc. outlines specific actions being taken as a Company toward the goal of zero discharge of hazardous chemicals.

– November 2011

NIKE, Inc. Commitment
NIKE, Inc. (Nike) has long been committed to developing products and business models that contribute to a more sustainable supply chain and our long-term vision is to create products and business models that are decoupled from constrained resources. Through innovative design, science, technology and process changes, we believe we can minimize waste, remove hazardous chemicals 1 and reduce non-renewable energy consumption in our supply chain.

This roadmap outlines specific actions that NIKE, Inc. is taking as a Company toward the goal of zero discharge of hazardous chemicals for all products across all pathways in our supply chain by 2020. These actions are in addition to those detailed in the joint brand collaboration roadmap (Joint Roadmap toward Zero Discharge of Hazardous Chemicals; adidas, C&A, H&M, Li Ning, Nike, and Puma, November 2011) (Joint Roadmap - PDF).

We recognize collaboration and participation from the industry is essential to support broad system change and Nike encourages others in supporting zero discharge of hazardous chemicals. Nike is committed to work with brands, material suppliers, the broader chemical industry, NGOs and other stakeholders to drive towards these goals.

Nike Roadmap Approach
Nike is committed fully to the actions outlined in the Joint Roadmap.  Meeting the Joint Roadmap’s goal of zero discharge of hazardous chemicals by 2020 requires a coordinated and collaborative approach throughout the NIKE, Inc. supply chain and with others in our industry. Nike will or has already initiated the following near-term (18 month horizon) actions in support of this goal (the actions are described in greater detail below):

Chemicals management and awareness training for Tier 1 factories and Tier 2 material suppliers focused on the Nike Restricted Substances List (RSL), Sustainable Chemistry Guidance (SCG) and Nike Water Program.

Continued expansion of the Nike Water Program.

Chemical preparation (mixture) screening pilot.

Participation in the Better Cotton Initiative (BCI).

Public release of the Nike Materials Sustainability Index (MSI).

Participation in a collaborative pilot project with the Green Chemistry and Commerce Council (GC3) on tools for supply chain chemical information exchange.

Chemicals Management and Awareness Training
Nike will conduct training to raise awareness and understanding of issues surrounding chemical management focused on the Nike Restricted Substances List (RSL), Sustainable Chemistry Guidance (SCG) and Nike Water Program. Specific emphasis will be given to raising the level of awareness of the hazardous chemical discharge.
This training will:

Demonstrate our public commitment on zero discharge of hazardous chemicals and emphasize the importance with factories.

Encourage participation in the Nike Green Chemistry Program, an important element of the Nike Materials Sustainability Index (MSI).

Be mandatory for all Tier 1 factories with which we have direct, contractual relationships. All Tier 2 material suppliers, printers, licensees will also be guided to attend. The trainings will be conducted for NIKE, Inc. factories and suppliers in Southeast Asia in early 2012.

Expansion of Nike Water Program
Nike has been working on water stewardship for more than a decade. In early 2011, Nike launched our global water program and released the H2O-Insight Water Tool to allow it to become an independent industry tool. We believe this will enable a much greater pool of brands and suppliers to participate in tracking water quality, quantity, and efficiency.
The Nike Water Program will also take the additional following specific actions in support of the Nike, Inc. commitment toward zero discharge of hazardous chemicals:

Incent full participation throughout the supply chains for Nike apparel, Nike footwear, Nike equipment and Nike affiliates and enroll key suppliers. The priority of new enrollments based on findings of pilot testing, benchmarking and material-specific initiatives (described in Joint Roadmap).

Develop a standard for WWTP (waste water treatment plant)  requirements at facilities using PFC (perfluorinated chemical) based water repellents

Adapt Nike wastewater quality guidelines, parameters and limits based on outcomes of the Joint Roadmap and Nike Pilot studies.

Expanding the Use of Positive Chemistries
In 2010, we introduced a Sustainable Chemistry Guidance (SCG) section to our RSL documentation that highlights “positive” chemistries. Nike believes that elements of an independent standard for the textile industry could be used to expand this program by significantly increasing the number of chemical preparations listed. Nike will:

Evaluate screening tools that could allow rapid expansion of our SCG with recommended chemical preparations and technologies.

Pilot the targeted use of a chemical screening tool for a select set of Nike vertically integrated suppliers

Participation in the Better Cotton Initiative (BCI)
In October 2011, Nike joined the Better Cotton Fast Track Program as part of its long-term strategy to improve the environmental and social impacts of global cotton production. The program is a pilot approach supporting BCI’s efforts to reach farmers and support them in developing sustainable agricultural practices. BCI standards address better management of inputs and improving livelihoods for farmers and their communities.

Material Traceability Pilot
In August 2011, Nike launched a material traceability pilot for organic cotton and recycled polyester with six of its strategic supply chain partners. Pilot objectives include evaluation of process certification standards, traceability software tools, and resource requirements to scale a material traceability program across material supply chains.

Materials Sustainability Index (MSI) release
In September 2011, Nike released all the documentation, worksheets, primary data and algorithms that comprise the Nike Materials Sustainability Index (MSI) to the members of the Sustainable Apparel Coalition (SAC) under open intellectual property licenses. The goal of the Nike MSI tool is to help Nike designers select environmentally better footwear and apparel materials supplied by environmentally better vendors. The tool evaluates significant impacts—in the areas of chemistry, energy and greenhouse gas intensity, water and land use intensity, and physical waste—associated with the most commonly used materials, from the plant, animal or fossil-fuel source to the finished material ready for use in footwear or apparel.

The index calculates science-based quantitative scores based on physical attributes as well as qualitative indicator scores using a 100-point scale. The quantitative portion of the score is for generic materials, such as conventional cotton, from assumed supply chains. The qualitative indicator portion of the score is derived from environmentally positive attributes, such as recycled and organic, and the environmental practices of the vendor supplying the material and as such drives positive behavior around the issue of chemicals management.

The Nike MSI pre-release provides complete transparency to SAC and the Technical Review Committee sanctioned by SAC and led by a Duke University professor. This committee, comprised of leading materials assessment academics, will perform a detailed review of Nike MSI. They will submit their findings in a report to SAC along with their recommendation regarding use of the Nike MSI in SAC product indexes. We anticipate that this report will be released in early 2012. At that time, Nike will make all of the information contained in the pre-release publicly available, and we hope that SAC will release the report publicly as well.

Participate in GC3 Data Exchange Pilot Project
Disclosure and chemical inventories are among the most challenging of issues to be addressed moving toward the zero discharge of hazardous chemicals by 2020. Although we see potential value in disclosure, we also believe that the strategy will require tools for data exchange that reflect the decentralized structure and legal and regulatory conditions of the industry’s supply chains.

As a member of the GC3 (Green Chemistry and Commerce Council), Nike will participate in a pilot project to evaluate the feasibility and benefits of standardizing chemical data types/formats/collection systems across supply chains. The pilot project will utilize a simple consumer product to gather chemical data from the supply chain to populate a chemical data superset (to the greatest extent possible/practicable) in a specified format. This project will help inform our strategy for tracking chemicals in the apparel and footwear supply chain.

1Hazardous chemicals are those that show intrinsically hazardous properties (persistent, bio-accumulative and toxic (PBT); very persistent and very bio-accumulative (vPvB); carcinogenic, mutagenic and toxic for reproduction (CMR); endocrine disruptors (ED); or equivalent concern), not just those that have been regulated or restricted in other regions.