Nike is one of the leading consumer brands in the world and is also a long time leader in environmental sustainability issues.
Nike has been addressing the issues associated with chemical use in its products since 1998. For example, the company created a rubber formulation that contains 95% fewer toxins, which is now used in over 75% of the company’s footwear. Additionally, volatile organic compound usage per pair of shoes has been reduced by 95% since 1995. Nike has set aggressive targets for the incorporation of environmentally preferred materials into its products. The company has been an industry leader in incorporating organic cotton into its products and supporting the development of the organic cotton industry. Nike recognizes the need to take responsibility for the environmental footprint of its contract manufacturers. It is actively working to ensure that facilities are making the necessary investments to address energy saving, wastewater, hazardous waste, and lean manufacturing techniques.
A 2014 study by Massachusetts Institute of Technology Researchers found that the adoption of lean manufacturing at more than 300 Nike contract factories resulted in a 15% reduction in serious labor violations from 2009 to 2013. The company has a commitment to require contract factories to adopt lean manufacturing and demonstrate progress toward a lean culture to move beyond compliance by the end of fiscal year 2015. According to the company’s own analysis, growing cotton represents 67% of Nike’s embedded water use. An area for improvement includes developing a water policy based on water scarcity.
Industry: Consumer Discretionary
Country: United States
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 9/30/14 and may not reflect current opinions or subsequent events.