III. Impact Areas

Water

Introduction

Water stewardship – including attention to water quantity and quality – is an essential part of our sustainability strategy. Freshwater supplies around the world are under pressure, which is pushing costs up. Since water is essential for communities to survive and thrive, water scarcity has potentially far-reaching effects. 

Some parts of our value chain can be water-intensive. Dyeing and finishing facilities that supply fabric for our apparel, for example, use and discharge 12 to 24 gallons of water per pound of textile. Therefore, we are working to design products from materials that require less water to produce, help material vendors and contract factories to reduce their water-related impacts, and eliminate hazardous substances from discharging into water.

Our Approach, Progress and Performance

In all of our sustainability efforts, we focus on the areas in our supply chain where we have the greatest potential to make significant improvements. For water, that’s primarily in the growing, production and processing of materials, followed by contract manufacturing. Our greatest opportunity to change use is in materials processing and contract manufacturing.

Material Vendors

We launched the Nike Water Program in 2001 to help our material vendors address their wastewater quality. In the first year, about 50 vendors participated; in FY11, more than 500 took part1 (see chart below).

Vendors enrolled in the Water Program must supply detailed data regarding the processes they employ, the materials they produce and how much water they use and discharge. If they discharge more than 50 cubic meters of wastewater per day (as about half of them do), we also require copies of wastewater discharge permits and laboratory water-quality testing results. Vendors self-report this information using H2O*Insight, an online data-collection system Nike developed.

The data and documentation that vendors provide allow the Water Program to first assess whether vendors are compliant with their own discharge permits and local environmental standards, and then whether they also meet Nike’s water-quality guidelines (see chart), which were developed jointly with other apparel brands through Business for Social Responsibility’s Sustainable Water Group. (Business for Social Responsibility is a U.S.-based membership organization focused on corporate responsibility). If vendors are not compliant, we require a plan and timeline for improvement. 

Product Design

The new Nike Materials Sustainability Index (MSI) – described in the Materials section – assigns sustainability scores to materials based on multiple criteria, including how much water is required to produce them and the water stewardship of vendors that process them. The Nike MSI creates a strong incentive for material vendors to enroll in the Nike Water Program and reduce their water-related impacts by recycling process water or implementing innovative low- or no-water coloring processes – as these activities help to increase their Nike MSI scores. Water-efficient materials from water-efficient vendors receive more points on the MSI, and, therefore, stand a better chance of being selected by our product creation teams than otherwise similar materials.

Contract Manufacturers

Some finished-goods manufacturing facilities are also significant users of water, so reduction is an important part of our environmental sustainability strategy for our contract factories as well. In 2011 we conducted our first-ever water-use baseline for footwear manufacturers. The baseline measured water usage in production, kitchens and on-site dormitories, among other uses. We learned that contract factories in our supply chain together use approximately 3.5 billion gallons of water annually.

We are working to reduce this number with a variety of approaches, spanning from leak detection and elimination, to setting standards for cleaning, to green technology innovation in mid-sole washing.

Expanding Our Impact

Our efforts to affect water use and wastewater discharge extend well beyond our own value chain. Nike’s material vendors also supply textiles for many other apparel brands. The Nike Water Program is currently tracking more than 60 billion gallons of water use per year, but only about one-tenth of that volume is likely related to fabrics used to make NIKE Brand or Affiliate Brand apparel. So in practice, our Water Program is helping to make other companies’ supply chains more sustainable too – whether they know it or not.  

Because we share so many of the same supplier facilities with other brands, we are seeking to drive broader industry impact through the release of the H2O*Insight online reporting system. We developed this robust data-collection tool for the Nike Water Program, but in 2011 we turned it over to C*Insight, the software development company that built the system, which is now making it available to Nike and other companies by subscription. The system uses a single questionnaire for each manufacturing facility, a shared database of water use and discharge data, and secure online access for brands and retailers to evaluate their suppliers’ performance. Our hope is that sharing this tool with the industry will enable a much larger group of companies and suppliers to evaluate and improve water quality and efficiency in the apparel and footwear industries.

Looking Ahead

We recently set new targets for water use, including a 15 percent increase in efficiency at footwear manufacturing and in materials dyeing and finishing – two top areas of use. We are also in the process of aligning our Nike water sustainability programs for material vendors and contract manufacturers. Going forward, we will be phasing contract manufacturers into the Nike Water Program, in addition to material vendors. Also, the Water Program will be presented in Nike’s global supplier training agenda, along with other sustainability topics. And, new global water resource data will allow us to renew our focus on prioritizing and accelerating program activities in water-scarce regions. 

Nike’s Sustainable Manufacturing & Sourcing team is continuing to work with our apparel and equipment contract factories, including helping them to improve water-use measurement and data management as building blocks for reporting and to achieve reduction targets. Furthermore, the new Nike Sourcing & Manufacturing Sustainability Index (discussed in the Manufacturing section) will serve as a leverage point for contract factories to improve their own water stewardship, as well as that of sub-vendors.


Resources
Notes

1 - The NIKE Water Program first included only apparel material vendors; footwear material vendors were invited to participate beginning in FY10.

With the increase in enrollment, we see an initial decrease in percentage of vendors that are fully compliant. Vendors that have poor/average performance during the first year of enroll typically move to better performance as they continue to participate annually.

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