Nike has been addressing the issues associated with chemical use in its products since 1998. For example, the company has created a rubber formulation that contains 95% fewer toxins, which is now used in over 75% of the company’s footwear. Additionally, volatile organic compound usage per pair of shoes has been reduced by 95% since 1995. Nike has set aggressive targets for the incorporation of environmentally preferred materials into its products. The company has been an industry leader in incorporating organic cotton into its products and supporting the development of the organic cotton industry. Nike recognizes the need to take responsibility for the environmental footprint of its contract manufacturers. It is actively working to ensure that facilities are making the necessary investments to address energy saving, wastewater, hazardous waste, and lean manufacturing techniques.
Nike acknowledges the inevitability of a carbon-constrained economy, and is planning for the associated business challenges. Historically, Nike has purchased renewable energy credits (RECs) in an effort to offset its climate impact; however, given the rising criticism of RECs, Nike will pursue climate neutrality through the combination of energy efficiency initiatives and the purchase of more direct forms of renewable energy. While Nike’s environmental achievements are clear, there is significant progress yet to be made, as illustrated by the company’s goals for expanding its carbon neutrality efforts.
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 1/31/13 and may not reflect current opinions or subsequent events.