Nike: Moving Down the Sustainability Track Through Chemical Substitution and Waste Reduction

4 Pages Posted: 21 Oct 2008

See all articles by Andrea Larson

Andrea Larson

University of Virginia - Darden School of Business

Jeff York

University of Virginia - Darden School of Business

Abstract

This is a minicase, one of 10 in a set of short cases written to illustrate the business benefits companies realize through adopting sustainable business strategies. This minicase discusses the formation and implementation of Nike's sustainability strategy in the 1990s through 2006 including changes to product designs and supply chain policies.

Excerpt

UVA-ENT-0098

Nike: Moving Down the Sustainability Track Through

Chemical Substitution and Waste Reduction

“Nike Air®,” “Nike Shox®,” and “Nike®+iPod®” are iconic reminders that the athletic apparel industry is a hotbed of innovation. Nike in particular is known for its innovative culture. From the cofounder on down, the Nike staff has embarked on a journey toward corporate sustainability, the long-term goals of which (by 2020) include zero waste, zero toxics, and 100% recovered product. It was understood that the only way that effort would succeed was if the$ 15 billion (FY06) company supported and extended its successful growth and its market share in primary markets (for example, its 40% market share in athletic shoes), while improving its cost position relative to competitors and extending the Nike brand worldwide. Not surprisingly, there were many opportunities for sustainability practices and strategies to serve Nike's broad business interests.

The firm's efforts to move beyond basic compliance and philanthropic approaches to environmental concerns began in the early 1990s with a small group of Nike employees that morphed into the Nike Environmental Action Team. The initial focus was on a small number of modest, environmentally oriented programs such as recycling and education. Nike reported its team experienced an “epiphany” that accelerated company learning following a 1995 presentation by Paul Hawken, well-known author of the The Ecology of Commerce. By 1998, the company had established an official sustainability policy.

The Nike story is one of movement from standard compliance approaches to an across-the-board corporate sustainability strategy accompanied by new sustainable design concepts yielding measurable financial, brand, and health and environmental benefits. The goals, processes, and results have been described in reports from Nike's partners and the firm's own corporate reports. But Nike's transformation went far beyond the narrow definitions of social responsibility that still dominate public debate on corporate behavior.

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Keywords: Innovation, entrepreneurship, sustainable business, sustainability, triple bottom line, natural environment, environmental, ecology, ecological, strategy, implementation, financial returns, green, greening

Suggested Citation

Larson, Andrea and York, Jeff, Nike: Moving Down the Sustainability Track Through Chemical Substitution and Waste Reduction. Darden Case No. UVA-ENT-0098. Available at SSRN: https://ssrn.com/abstract=1278411

Andrea Larson (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/larson.htm

Jeff York

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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