Leveling the playing field: Nike closes the loop

While Nike is known as a major international force for producing long-lasting athletic gear, innovative marketing tools to spread the word about new products and celebrity campaigns, and a leader in getting America to move, the $19.2 billion company is also continuously investing within to promote an overarching philosophy around sustainability to “innovate toward a better world.”

Nike’s increased interest on Sustainable Business and Innovation (SB&I) has been seamlessly integrated across the company’s business strategies to provide greater returns to the company’s business, communities, contract factory workers, consumers and the planet as a whole.

“There are two aspects to the work we do,” Sarah Severn, Director of Stakeholder Mobilization, Sustainable Business and Innovation at Nike, says. “One is around our product and developing a closed-loop business model, and the other is framed around the ‘access to sport.’” Severn recently was a guest panelist at the Innovative Products for Sustainable Societies third annual summit at the University of San Diego.

In 2005, Severn became Director of Horizons, through which she identifies trends and opportunities for business and sustainability. For the past 10 years, Severn has lead Nike’s efforts surrounding climate change and is also focused on developing the company’s climate change advocacy strategy.

CLOSING THE LOOP
“How will we thrive in the future when it comes to sustainability? We have to refrain from using scarce resources,” she says. “Our biggest footprint, some 60 percent, is in the raw materials that actually go into our products, rather than manufacturing or the transportation of our goods.” Nike is currently working on four efforts to reduce the impact of its product and to improve its environmental footprint by reducing waste, toxics released, energy consumption and water.

“With our closed loop innovation model, we look at the way things are produced and make them with the intention of bringing them back, or recycling them, to reuse the raw materials for future products in some capacity,” Severn says. “You could build products to be biodegradable for future compost, but we believe our products still have value after they’ve been used and would rather take them back for future use.” For instance, Nike designed the jerseys for the World Cup 2010 and constructed them from 100 percent recycled polyester from plastic bottles.

The company believes the future will demand closed-loop business models that assist in moving closer to achieving zero waste by reusing, recycling or composting all materials.

LOOKING AHEAD AT INNOVATION
Nike continues its North Star ambition for an entirely closed-loop system, especially with their “Reuse A Shoe” program, in which Nike takes shoes back, recycle its materials and puts the components into the creation of sport surfaces, such as installed basketball courses and soccer fields.

“We’re using this as a shift in our business model, to change the structure of our supply chain, and we need a whole ecosystem of people to do this,” she says. “We continue to encourage the democratization of innovation.”

Further the company’s philosophy for embracing innovation, Nike will launch its Green XChange (GX) program that brings together companies, people and ideas to create sustainable change. “Green XChange will be the home to over 400 patents and act as a space for patent exchange and licensing, while allowing for the flourishing of innovation and shared knowledge,” she says.

“Nike is committing to placing more than 400 of our patents on GX for research, demonstrating our belief that the best way to stimulate sustainable innovation is through open innovation,” said Mark Parker, NIKE, Inc. president and CEO. “Our hope is that this will unleash new innovation to help solve current obstacles to sustainability issues.”

Innovation is at the heart of Nike’s business growth strategy and its focus to becoming better also improves their mission for a sustainable economy; one where people, profit and planet are in balance.

With GX, Nike hopes to make it easier for individuals, businesses, academia and researchers to collaborate and share best practices in an effort to share intellectual property, and create and adopt technologies that have the potential to solve global sustainability challenges.

Nike continues to be a growth company by aligning its strengths and taking advantage of opportunities given. With a clear business strategy for sustainability and innovation toward a better world, the company will surely continue to identify new ways to create value and positive returns on investment for the business, shareholders, employees and ultimately, the environment.