March 11, 2010

Ceres report delivers road map for companies

Blog post by Sarah Severn, Director of Stakeholder Mobilization for NIKE, Inc.

When Nike first began incorporating sustainability into its business practices, the risks and opportunities we grappled with seemed distant – indeed, even non-existent to most businesses. There was no “best practices” path to follow. So out of necessity and using our culture of innovation we experimented with different approaches, invited a few select partners to join with us, and hoped that our passion and ability to innovate would carry us forward.

Fifteen years later, the risks and opportunities that businesses face from environmental and social challenges are more obvious than ever. We are surrounded by strong signals and data on the far-reaching impacts of climate change, population growth and resource scarcity. Adding to the complexity is the increasingly globalized economy that has us making and selling products in all corners of the world.With the release of its new report, 21st Century Corporation: Roadmap for Sustainability, Ceres is paving the way for all companies to embark on a sustainability journey, but are not sure where to start. The report also provides a clear compass for companies like Nike, who have been on this journey for a while, to check their bearings and progress.

We have had the opportunity to experiment, refine and course correct on our journey. We have learned some key essentials, including: the need to establish Nike’s social and environmental footprint; the value of partnership and collaboration in solving tough problems; and above all, the necessity of integrating sustainability into Nike’s business operations and having governance and oversight at the board level.

The Ceres roadmap discusses the need to embed environmental and social concerns into the corporate DNA. Nike’s culture is one of innovation, so we have very consciously moved away from the concept of corporate responsibility as a risk and reputation management approach to one that stresses sustainability as an opportunity for innovation and business growth.Nike has brought this work to life through a number of opportunities outlined in the Ceres roadmap, including board oversight, proactive stakeholder engagement and product sustainability.

Below are a few highlights of how Nike is integrating sustainability in its governance systems and product innovation:

GovernanceNike’s Corporate Responsibility Committee of the Board of Directors was established in 2001 to review significant policies and activities and to make recommendations regarding labor and environmental practices, community affairs, and sustainability initiatives. The Committee meets throughout the year to review strategies, plans and develop targets. Either the company chairman or the CEO attends the CR Committee meetings. GreenXchangeAt this year’s World Economic Forum in Davos, Nike announced the launch of the GreenXchange (GX). GX (greenxchange.force.com) is a web-based marketplace designed to share intellectual property which can lead to new sustainability business models and innovation. Nike teamed up with other organizations that understand the value of making private intellectual property visible and usable, to ultimately accelerate the development of green innovation. The system is used for capturing, sharing and licensing patents that, when used by someone else, could lead to unlimited innovation in helping solve current obstacles to sustainability issues. Through these partnerships with diverse organizations, stakeholders and companies, we will all be able to move the needle forward in developing a more sustainable future.

Considered DesignNike’s Considered Design ethos marries performance and innovation with sustainability principles to produce all of our products with a lower environmental footprint. We are undertaking this company-wide effort because we know our largest environmental impact lies in the materials used to make our products. We have evolved our work along two tracks; improving the current status by reducing our impact, but also looking for the disruptive innovation that can help us achieve a closed loop business model and a radical reduction of resource consumption.

Nike’s path to sustainability is one of constant change, innovation and discovery. The same should be true for all other businesses embarking on this journey. The Ceres roadmap allows us all to come together and share this expertise. We now have a roadmap, we know what needs to be done, and all that is missing is the collective will to move into a new future.