In 2015, NIKE products were produced in 700 factories, across 42 countries, by over 1 Million factory workers . To say that they have a global impact – whether positive or negative, on natural resources – is an understatement.
To put their impact into perspective, in 2013, 10 billion kilograms of cotton was used by the global apparel industry; this resulted in 107.5 million tons of CO2-eq – or the impact equivalent of 24 million miles driven by a passenger car (a few other conversions are below) .
Equivalent impacts to the cradle-to-gate impact of one cotton t-shirt.
Equivalent greenhouse gas impacts of cotton’s use in the global apparel industry
Keep in mind that this only refers to the cotton material used by manufacturing companies. In addition to the materials used, companies such as NIKE use water in their supply chain, generate manufacturing waste, and have less than optimal renewable energy as part of their owned and operate facilities.
This leaves NIKE in a particularly vulnerable position, given the realities of Global Climate change. For example, in 2008, weather-related irregularities, like floods shut down four NIKE factories in Thailand. Furthermore, the rise of droughts in regions that produce cotton, means less cotton is produced, the price of cotton increases, and more market volatility is introduced, which all negatively the company’s bottom line. This water issue is of paramount importance; the World Economic Forum has flagged water quantity and quality as the biggest threat facing the planet over the next decade .
NIKE has not stood idle versus these climate change challenges; they’ve adopted new approaches to (1) minimize the impact of changing climate conditions and (2) reduce their environmental footprint. For example, Nike is using more synthetic material that is less dependent on weather conditions. NIKE is also “using lower-impact, high-volume materials – such as recycled polyester and certified Better Cotton (cotton grown according to the Better Cotton Initiative Standard System) – that drive energy efficiency and water efficiency” .
A summary of NIKE’s 2020 Environmental Impact goals 
- A 10% reduction in the average environmental footprint
- Reach 100% renewable energy in owned or operated facilities through FY25 and encourage broader adoption, as part of an effort to control absolute emissions
- Eliminate footwear manufacturing waste to landfill or incineration, while continuing to reduce overall waste
- Innovate and adopt new approaches to reduce water use in the supply chain, with a 20% reduction in freshwater use in textile dyeing and finishing (l/kg) per unit of production
- Zero discharge of hazardous chemicals
While these efforts have helped reduce their overall carbon footprint, there is still much room for NIKE to improve. For example, the company’s CO2 2020 emissions goals remain weak targets at best.
As evidenced by the exhibit above, very little progress has been made since 2000. Just as NIKE continues to have aggressive revenue and bottom line financial goals, the same rigorous approach should be applied to their Global Carbon Footprint commitments. As a starting point, NIKE should reduce their 2 Million mTons of CO2 Target to about 1.5 Million mTons.
While NIKE continues to make strides in their efforts to reduce their carbon footprint, a few questions should remain top of mind for executives. How much will these efforts impact their bottom line, and how will shareholders react if NIKE decides to up the spend on these efforts? Secondly, will increased attention to environmental impact have an adverse effect on their product quality? For example, will the adoption of synthetic non-cotton materials decrease the performance aspect of NIKE’s apparel?
On the grander scheme of things, not taking steps to further combat the impacts of global warming will have a wide range of effects, the most important of which are:
- Rising Sea Levels
- Changing Weather Patterns and extreme weather
- Pressure on water and food
- Political and security risks
- Human Health risks
- Impact on Wildlife and Ecosystems
NIKE’s mission statement is “To bring inspiration and innovation to every athlete in the world” , but if NIKE and other corporations don’t accelerate their efforts, there might not be a world left.
 Sustainable Apparel Materials | Materials Systems Laboratory Massachusetts Institute of Technology Cambridge, MA | October 7, 2015
 NIKE 14/15 Sustainable Business Report
 Climate Change in 2016: Implications for Business | Harvard Business School Press | October 14, 2016