50 Years In, Nike Continues to ‘Raise the Bar’ on Purpose
Despite decades in the ESG game and countless externalities, Nike is constantly raising the bar on purpose.
Nike has had its head in the ESG game for quite some time, but that doesn't mean change isn't constant.
Nike's Purpose strategy — comprising people, planet and play — has been ingrained since Nike's inception 50 years ago despite just over 20 years of formal
ESG reporting. Yet the footwear giant is navigating the new holistic sustainability landscape with more agility and quickness than ever before — and everyone's involved.
Clocking in at around 75,000 employees, Nike said its people actively engage in the footwear giant's sustainable goals.
“There's so much desire within the employee base at Nike to participate in all of our areas,” Noel Kinder, Nike Inc. chief sustainability officer, said in an interview with WWD alongside other Nike Purpose leaders. “When we were still on campus I had people coming weekly to talk to me, saying: ‘Hey, I don't work in sustainability but how can I help?' I think that ‘impact' is a really important word.”
Today, Kinder said, Nike embodies an “operationalization of sustainability” rather than a top-down approach with few leaders calling the shots.
Jorge Casimiro, Nike Inc. chief public policy and social impact officer echoed his reasoning. “It's the people that make this all happen. It's always been the case… There's always been externalities and there always will be externalities. I think for us it's how are we committed responsible leaders that are part of the solutions? We can't solve everything on our own, we have to work together.”
The people component also materializes into investor speak. Last year, Nike linked its purpose targets to executive compensation, including aims to invest
$125 million in organizations supporting racial equity by 2025 ($36.6 million in fiscal year 2021). In 2021 alone, Nike committed $36.6 million to community organizations.
On the environmental side, Nike was the first in the footwear industry to publish a list of its contract factories and was a founding member of the Sustainable Apparel Coalition. Given its sizable footprint, the company already diverts
100 percent of manufacturing waste from tier 1 footwear suppliers from landfill and is pioneering new pathways to circularity like its upcoming “Link” (debuting in
June 2022) and “Link Axis” sneaker (the latter more for show and not arriving until 2023). The novel sneakers are glueless and built for disassembly.
“Circularity is a really important unlock,” said Kinder. “The nirvana would be that you buy a pair of shoes and use them to the point that they're worn out, take them back and have them disaggregated so their core compounds are reconstituted into another shoe. We're not quite there yet, but a lot of the elements of that concept of circularity exist, like Space Hippie, where we're starting to use waste as a feedstock. You see that in those crazy Axis shoes that can be decomposed back into original parts. I really feel like that is the future of innovation in sustainability.”
With the anticipation of the Nike Link sneaker, any Nike store with the Recycling & Donation service will be able to take back the shoes.
However, all that forward momentum is not without its obstacles.
Climate is one area of increasing obligation, given the company's size and influence over the footwear industry. In Nike's latest impact report, employee and supplier engagement were two areas where slippage occurred at the company last year due to increased scope.
Pointing to the supply chain nuance and pandemic challenges, Kinder said, “We've expanded the scope of what we audit in our supply chain to include our textile manufacturers, even some of our third-party logistics providers… and unsurprisingly there's been some challenges when you start to expose new partners to that level of evaluation. And we saw a dip in performance, and that was what we expected because we take a partnership approach to everybody that we work with. We work hand in hand to ensure that they understand the nuance, they understand what we're holding them accountable for and they remediate appropriately.”
Mayo stressed similar nuance in internal employee engagement weathering the changes brought on by the pandemic.
“We have gone through a lot of change within the two years. We've recognized that, we've really not waited for the annual engagement surveys, we're pulsing our employees — like many other companies are doing — on a regular basis to better understand where they are because the change is happening so quickly…We want to ensure we meet our employees where they are as they return to office,” said Mayo, stressing the importance of mental health, consistent time off for retail workers, corporate child care services and a host of other needs. (Not to mention Gen Z coming in full force to influence workplace culture).
Since last year, Nike has increased the amount of U.S. racial and ethnic minorities at the director level and above by more than four percentage points to 30.3 percent, while also increasing the amount of women in leadership roles globally by nearly four percentage points to 43 percent.
“DEI equates to innovation,” Mayo said. “We recognize that here at Nike. It's been part of our journey, and in the next 50 years you're going to see that explode.
That is truly exciting… From a people perspective, people are asking for so much more. Purpose is squarely front and center on decisions; what company to work for, where they decide as consumers to give their dollar…Going forward we have to sweat purpose for the next 50 years.”