Nike is doubling down on waste. In its annual sustainability report, issued on Wednesday, the sportswear giant revealed that 71 percent of its shoes and apparel today contains recycled materials, some of it derived from its own production leftovers. Writing in his “Letter from the CEO,” Mark Parker hailed “low-impact and regenerative materials” such as manufacturing scrap as the linchpin of closed-loop products that are big on performance yet lithe of footprint. “From an impact standpoint, materials matter the most,” Parker said, adding that materials account for 60 percent of a Nike shoe’s environmental impact. “One of the keys to our success will be to develop a new palette of sustainable materials. Coupled with smarter designs, we can create products that maximize performance, lighten our environmental impact, and can be disassembled and easily reused.”


Rather than go it alone, Parker said that Nike is partnering with likeminded initiatives, such as the Sustainable Apparel Coalition and the NASA– and U.S. Agency for International Development-backed Launch, to “make the next step in [Nike’s] closed-loop vision”: to divert, by 2020, 100 percent of its footwear manufacturing waste from landfills or non–energy recovery incinerators. Nike is on its way to achieving that benchmark; it managed to reclaim 92 percent of its trash in 2015.

The reframing of waste as resource has far-reaching implications.

“Excess materials in the manufacturing of Nike shoes will fuel a future closed-loop model, where waste becomes a product input,” Parker said.

But personal garbage isn’t all Nike has its eye on. The Oregon-based firm is also the world’s biggest user of recycled polyester in the apparel industry, according to Textile Exchange. (About 39 percent of the Swoosh’s garments contained the stuff in 2015, Nike noted.)

Plus, as of 2016, all of the core yarn for its seamlessly constructed, not to mention waste-eliminating, “Flyknit” shoes consist of recycled polyester made from post-consumer plastic bottles. Trash, it seems, is the new treasure.

Other ambitious targets Nike has set for itself over the next four years include increasing its overall use of sustainable materials, such as gleaning 100 percent of its cotton from certified-organic, recycled, or Better Cotton sources.

Another 2020 objective? Sourcing 100 percent of its products from suppliers that meet the company’s definition of “sustainable.”

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Parker said Nike has cut back on the number of factories it works with in order to better engage with those it employs in terms of labor and manufacturing standards. As it stands, 86 percent of Nike’s contract factories have achieved a minimum bronze rating on its internal Sustainable Manufacturing & Sourcing Index, which assesses conduct based on environmental performance (water, energy, carbon, waste), worker health and safety, and progression toward the Fair Labor Association’s definition of a “fair wage” approach.

“We have worked alongside others for over 20 years to improve labor standards in contract factories. We’ve learned a lot in that time. And we’ve seen the limitations of the existing system,” Parker said. “Compliance to our code of conduct is a foundational requirement, but it can’t end there. We expect any contract factory partner we work with to understand that an empowered and engaged workplace is a productive and profitable business model. The factories that make these investments will be the ones that join the manufacturing revolution.”

In a similar vein, Nike said it plans to achieve “100 percent usage” of renewable energy, such as solar, geothermal, and wind, at company-owned and -operated facilities by the end of 2025.

Also on its docket are items like identifying low-water and no-water dyeing processes, using fewer and better chemicals to process materials, and finding other opportunities to reuse product waste.

Hannah Jones, Nike’s chief sustainability officer, said that sustainability as a driver of innovation rather than a constraint.

“We’ve set a moon-shot challenge to double our business with half the impact,” she said in a separate statement. “It’s a bold ambition that’s going to take much more than incremental efficiency—it’s going to take innovation on a scale we’ve never seen before. It’s a challenge we are setting for ourselves, our collaborators and our partners as we move toward a circular economy future.”

+ Nike