Brand CasesNike Supplier Climate Action Program

Publication Date:2022-09-15

Given the urgency of addressing climate change, Nike has set a Science-based Target (SBT) of reducing Scope 3 emissions by 30% by 2030. This ambitious target cannot be accomplished by Nike alone and requires engagement with all parts of our supply chain. We recognize that meaningful climate action requires long-term commitments. Fortunately, Nike has built longer-term relationships and with our manufacturing partners over the course of the past few decades. These partnerships have allowed us to develop innovative products and manufacturing capabilities, and now we are leveraging those relationships to drive action on climate change. 

In May 2020, Nike launched a new climate program with Nike’s Supplier Sustainability Council (SSC), a group of strategic partners committed to sustainability to enhance their operational performance, mitigate risk, and drive collective action. Challenges related to climate change were among the top sustainability issues raised by the SSC, such as the rising cost of energy, increased intensity and frequency of extreme weather events, and new policy and regulation introduced by governments to mitigate greenhouse gas (GHG) emissions. 

With those concerns in mind, Nike developed the Supplier Climate Action Program (SCAP). The program encourages suppliers to address climate change strategically through development of their own company-wide long-term climate mitigation plans. The SCAP provides a management framework that includes the following key elements: 

·      Develop a company-wide GHG inventory

·      Set a science-aligned emissions target for Scope 1 and Scope 2 emissions for all footwear and apparel activity, including production for other brands  

·      Publicly disclose climate-related information through CDP 

·      Collaborate with Nike to explore climate-related risks and opportunities in the extended supply chain.

Thirteen of Nike’s largest finished goods and materials suppliers have committed to the program, and those groups account for approximately 65% of emissions from Nike’s strategic suppliers. Given that the program’s ambition reaches beyond Nike-related production, combined Scope 1 & 2 corporate-level emissions from SCAP are equivalent to about 30% of Nike’s entire Scope 3 emissions footprint. Viewed from another lens, combined global emissions from SCAP members are more than 5 times greater than emissions from Nike-related finished goods and materials manufacturing in China. 

Science-aligned targets require suppliers to reduce emissions in line with a 1.5-degree Celsius pathway, which is an annual reduction of 4.2% or a 42% reduction over 10 years. Therefore, cumulative emission reductions from SCAP suppliers’ baseline emissions of 3.2 MMT CO2e are expected to be at least 1.4 million metric tons CO2e over the next decade – equivalent to the annual emissions that would be avoided by shutting down over 3 natural gas-fired power plants. As Nike grows, the emissions avoided by manufacturing partners will grow in tandem because of reductions achieved through absolute carbon targets. 

Over the past year, Nike and the suppliers participating in SCAP have worked to create a joint climate action plan, which will serve as a roadmap for emissions reductions over the next 10 years and help drive further action toward our shared climate ambition. This includes continuing to drive action through the Nike Responsible Supply Chain Climate & Energy program by expanding technical assistance and sharing of best practices among suppliers to maximize their energy efficiency as a continuation of the Nike Energy Minimum Program. In addition, Nike plans to explore opportunities related to emerging technologies with SCAP members, such as piloting digital energy management tools to further enhance efficiency or renewable thermal systems to support coal elimination. It also involves expanding supplier use of on-site renewable energy and increasing policy advocacy, and engaging suppliers in those advocacy efforts, in key markets to enable procurement of offsite renewable electricity.

Of the suppliers committed to SCAP, one quarter of their Nike-related emissions occur in China. The program participants have 20 facilities located in China and those facilities are reducing emissions faster than other manufacturing partners operating in China already. For example, during Nike’s 2021 fiscal year apparel manufacturers in China that were participating in SCAP achieved per unit emission reductions that were three times greater than Nike suppliers as a whole (-27% vs -8%). 

Nike plans to expand the SCAP program to all strategic suppliers next year, growing ambition collectively across the supply chain, resulting in direct impact on its supply chain emissions while catalyzing change across the footwear and apparel industry. 

(The above content is provided by the brand, and the authenticity of the data is the responsibility of the brand. This article has both Chinese and English versions. If there is any inconsistency, the English version shall prevail.