Anything we or our contract manufacturers buy that does not end up in our product (or have another essential purpose) represents waste and related resources - whether it’s excess materials that result in unnecessary handling and shipping, excess corrugated cardboard in boxes, or shopping bags not needed with consumer purchases.
Our products themselves eventually become waste, as was made clear in our footprinting effort. The disposal phase - that is, when our products reach the end of their useful lives and are thrown away - makes up 59% of the total waste in our value chain. (See footprint graph below.) To help our shoes “play on” in the form of new products, we began Reuse-A-Shoe in 1990. Since then, we have collected and reground 28 million pairs into NIKE Grind for use in more than 450,000 locations around the world - in applications ranging from running tracks and playgrounds to carpet backing and soles for new footwear.
At the same time, we are working to reduce waste by focusing on what goes into our products and packaging. We aim to design our products to limit the creation of waste in manufacturing, rather than figuring out how to repurpose waste after the fact. This ultimately helps to reduce waste all along our value chain, including at end of life. NIKE Flyknit, introduced in 2012, represents a small portion of our production line today, but we believe it holds great potential in helping us advance toward our goal of reducing waste, especially at scale. The technology uses knit construction that allows for a lightweight upper that reduces footwear waste. The Flyknit Lunar 1+ running shoe reduces footwear waste by 80% on average when compared to typical NIKE running footwear.
Our progress toward our waste-related targets has been mixed. We are working toward 10% reductions in waste from finished goods manufacturing across NIKE, Inc. and in shoebox weight per unit, from our FY11 baseline through FY15. These targets build on the 35% reduction we had already achieved in footwear manufacturing waste from FY01 to FY11.
We have made good progress toward our total manufacturing waste reduction target, having achieved an 8.6% reduction in this waste from FY11 to FY13, through consultation between our field teams and contract factories on the application of our index, including data management, identification of opportunities and setting targets, developing action plans and implementing process changes. While overall waste has declined, the contract factory-level diversion rates have improved.
Our shoebox target will be more difficult to meet. Our boxes need to be lightweight and waste-efficient, but they still must retain their integrity and structure from the factory to the consumer. Starting in 1995, our shoebox has been made of 100% recycled content. Since that time, we have worked to reduce the weight of the box, developing different alternatives with varying degrees of success. The new NIKE Brand box is a 3% weight reduction against our FY11 baseline, building on a 6% savings from a previous box redesign. We are in Phase 3 of rollout and will be at full implementation of the new box design by the end of FY15. That’s good progress but not enough to meet our 10% reduction target by FY15. We are exploring additional options, including changes to the master carton - so that the smaller and lighter shoeboxes can be shipped in a leaner outer box. Additionally, we have other shoebox initiatives in various stages of implementation that will reduce overall shoebox weight.
Converse launched its redesigned box in FY12, achieving a 13% reduction in average weight per box compared to the previous design. This reduction was achieved through a design overhaul that enabled the use of less material and lighter-weight corrugate fiber.
One of the primary ways we help to drive waste reductions in our supply chain is via our NIKE Materials Sustainability Index and our footwear and apparel indices. By measuring the environmental impact of chosen materials and the waste efficiency of designs, our designers can make better choices. In NIKE Brand apparel, our average pattern efficiency rates at the end of FY13 were more than 80%. In NIKE Brand footwear, this rate improved to 71% average efficiency – resulting in a nearly 13% reduction in waste compared to FY08.
Closing the Loop
For manufacturing waste that we cannot yet eliminate, what we do with it matters. We make every attempt to drive waste as high up the value chain as possible - ideally back into our own product through closed-loop innovation. Examples include material vendor take-back programs and grinding rubber outsoles back into new outsoles, including testing and exploring new ways to increase the level of scrap content that can be mixed back into new outsole rubber. The next best options are NIKE Grind applications, basic recycling solutions, and then energy recovery.
Our corporate offices also produce waste, though the amount is minimal compared to that from manufacturing and packaging. At our World Headquarters (WHQ) campus, our waste has grown 4% compared to 14% growth in our campus square footage since FY11. We are monitoring the increased amount of waste we produce and are including waste assessments and reductions in our long-term planning. We are also focusing on the diversion of waste to compost and recycling, away from landfill. Our WHQ diversion rate in FY13 was 69% - our best on record despite dropping to 57% in FY12 from previous rates above 60%. Our ability to maintain or improve these diversion rates in the future depends in part on external factors such as the efforts of our food service suppliers, and proposed regulatory changes regarding acceptable materials for composting and recycling.