Brand CasesReducing Nike Supplier Emissions through Boiler Elimination

Publication Date:2021-02-25
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Climate change is affecting athletes across the world as rising temperatures make participation in some sporting events more difficult, and in some cases, more dangerous. An extreme heat wave in 2019 led to the cancellation of the New York Triathlon and warm temperatures during the Sochi 2014 Winter Olympics resulted in fewer skiers finishing their events and more athlete injuries.[1]  Nike recognizes today’s need to reduce emissions across the entire value chain to address climate change.

In August 2019, Nike committed to a science-based target (SBT) aligned with a 1.5 degrees Celsius pathway, which is what science tells us is needed to limit global temperature rise and avoid the worst impacts of climate change. This includes reducing emissions from direct operations (Scope 1), purchased electricity (Scope 2) and from across the extended supply chain (Scope 3).  Nike’s SBT includes reducing Scope 1 and Scope 2 emissions by 65% and Scope 3 emissions by 30% by 2030. Our supply chain accounts for a majority of our emissions, with finished goods manufacturing and materials manufacturing accounting for as much as two thirds of Nike’s supply chain emissions. To achieve these goals, Nike’s Sustainable Manufacturing & Sourcing (SM&S) Climate & Energy Program is working with our global suppliers to reduce emissions and improve energy efficiency, building on a program that has been in place for over a decade.

One pillar of the Climate and Energy Program is our Steam Boiler Elimination Initiative to remove centralized steam boilers from footwear manufacturing. Steam boilers are a major source of emissions in footwear manufacturing. Historically, steam has been used to provide the heat necessary to mold rubber midsoles and bottoms for footwear. Heating accounts for roughly 40% of a factory’s energy consumption, although molding is just one of dozens of steps to produce footwear. In addition, steam is often generated through burning fossil fuels such as natural gas or coal, and its transport from the boiler to point of use can be very inefficient, as energy loss and steam leaks occur across kilometers of piping needed to deliver the steam across the factory.  As part of this initiative, Nike field consultants help suppliers develop their business case – calculating energy and cost savings, and the carbon reduction potential of projects – to motivate factory leadership to make the needed investments. Then they provided technical support and project management assistance to help suppliers keep the projects moving forward.

Nike found that converting facilities to electrically heated bottom-making processes significantly reduced on-site emissions. By electrifying these processes, factories could also avoid losses associated with steam pipes, further improving energy efficiency. In addition, greater electrification means additional opportunity for factories to source renewable energy, such as on-site rooftop Solar Photovoltaic (PV) and grid-based renewable electricity. By eliminating centralized boilers, we realized we could reduce on average the total energy use at a footwear finished goods factory by 15-20%. The program launched in 2008 in Vietnam and a major push to eliminate centralized steam boilers among suppliers in China began in 2016.

Through the Steam Boiler Elimination Program, suppliers globally successfully eliminated, optimized, or decentralized 50 centralized boiler systems. Over the past five years, three out of Nike’s seven supplier groups in China conducted a total of 11 boiler projects (9 boilers eliminated + 2 purchased steam eliminated). The initiative has reduced on-site energy use and also halted the direct use of coal in the manufacturing of Nike footwear finished goods. Eliminating coal in footwear manufacturing also helps Nike meet its commitment under the UN Fashion Charter, which seeks to eliminate new coal use in finished goods and materials manufacturing by 2025.[2] Additionally, it has contributed to reductions in Nike’s Scope 3 emissions, including a 65% decline in the energy used per pair of footwear globally over the past decade. By the end of 2018, footwear manufacturers in China eliminated all boilers and purchased steam. These efforts resulted in $13M in energy savings and 49,000 MT CO2 equivalent reductions at footwear finished goods supplier facilities in China over the past five years.

The program also generated significant benefits for individual suppliers, as demonstrated in the case of the Feng Tay Group, which has several facilities in Fujian Province. Feng Tay has a decades-long partnership with Nike and is a strong leader in the energy and environment space. By the end of 2017, Feng Tay eliminated steam boilers at their three finished goods manufacturing facilities in China. As illustrated in the charts below, they reduced energy consumption by 16-21% per factory, resulting in 12,200 MT CO2e emissions reduction over the past 5 years.

Although good progress has been made, Nike still has significant work ahead to meet our SBT commitment to reduce supply chain emission by 30% by 2030. In addition, Nike has committed to a 30% absolute reduction in our extended supply chains through the UN Fashion Charter, which is expected to drive further collaboration and accelerate solutions in the industry.[3] Nike looks forward to continued partnership with suppliers to deploy cost-effective and scalable win-win solutions that reduce energy and emissions, save money, and protect the future of sport.  

NOTE: The charts below indicate collective performance of Feng Tay’s three facilities located in China.

                         






[1] Goldblatt, David. “Playing Against the Clock: Global Sport, the Climate Emergency and the Case for Rapid Change,” Rapid Transition Alliance, June 2020.

[2] UNFCCC, “About the Fashion Industry Charter for Climate Action,” https://unfccc.int/climate-action/sectoral-engagement/global-climate-action-in-fashion/about-the-fashion-industry-charter-for-climate-action, accessed 09.01.2020.

[3] Ibid.

If any divergences arise between the English and the Chinese versions of this report, please refer to theEnglish version.

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