Nike: Driving Down Supply Chain Impacts

In 2001, the Nike Water Program was created to evaluate and reduce the water quality impacts of roughly 50 of the dyeing and finishing facilities that supply Nike's contract factories. Full compliance requires participating supplier facilities with wastewater volume greater than 50 m³ per day to demonstrate wastewater quality that meets all local/national discharge standards or BSR Water Quality Guidelines, whichever are stricter.

Since then, the program has grown to enroll more than 500 supplier facilities and subcontractors, which produce or process materials used to manufacture Nike-branded apparel, footwear and equipment, and Nike affiliate brand products. The program has also been strengthened with the implementation of H2O Insight, an online data collection system that requires participating suppliers to report detailed production and water management data in addition to water volume and quality data. The Water Program today continues to set limits on a variety of water quality indicators (including pH, biochemical oxygen demand, and suspended solids, for example). Lab test results for these indicators are managed through a third party and uploaded through the online reporting system into a central clearinghouse-style database that allows Nike to track progress facility-by-facility and year-by-year. The results are also used to identify instances of non-compliance and prioritize action by suppliers.

Because most of Nike's material suppliers also process textiles for other retailers and brands, the company recognizes that its efforts to collect data and work toward improved supplier performance will also benefit the broader industry. To that end, Nike is releasing the H2O Insight system to the industry and encouraging other brands to leverage this powerful tool to gain insight into their own supply chain water use and impact, and to work toward greater sustainability, traceability and visibility into their impacts on water resources.

Beyond regulated environmental impacts, many textile manufacturing processes continue to burden water resources through the discharge of unregulated and persistent chemical compounds. In recognition of these impacts, the company recently announced a goal to achieve zero discharge of hazardous chemicals from its supply chain by 2020.

Nike acknowledges that it will be challenging to meet this commitment, but the company's aim is to reach its goal through innovation, the application of green chemistry, and collaboration both with the chemicals industry and Nike's counterparts in the footwear and apparel industry.