Sustainability and ethics in fashion garment industry

Introduction

Sustainability management in terms of environmental and social is the responsibility of the corporate brand to expand their business and gain high competitive advantage. Through environmental and social sustainability management as well as ethical practices, it is possible for the organisations to sustain in the market and fulfils the brand commitment towards the entire stakeholder (Fung, Choi, & Liu, 2020). The study focuses on analysing the environmental sustainable practices in the fashion garment industry where it would be possible to evaluate the sustainability practices of the brand. In this study, the sustainable practice of the famous brand Nike will be evaluated for understanding their ethical code of conduct and green environmental footprint management. Additionally, there would be recommended suggestions for the company to improve their product life cycle and ensure environmental sustainability in long run so that it would be possible to secure future sustainable development for Nike.

Company background

Nike is the American multinational corporation that is efficient to design, develop manufacture and distribute the high quality footwear, apparel, accessories and equipment. In 2020, there are more than 76700 people employed in the company. The major products of the organisation athletic footwear, apparel, athletic and recreational products and sports equipment and the brand is successful to run their operations worldwide and deliver the best quality shoes and apparels to the customers. The organisation is efficient to manufacture high quality products and maintain the global supply chain and distribution network to achieve the future success (Nike, 2021a).

The vision of the company is “To bring inspiration and innovation to every athlete in the world.” And the mission of Nike is to “do everything possible to expand human potential”. The organisation maintains the manufacturing network consisting of 700 factories across 42 countries and each products move from 57 distribution centres across a network of 18500 accounts and 140000 retail doors. Nike has 42 factories in the USA as well as Nike lists 124 plants in China contracted to make its products, 35 in South Korea, 73 in Thailand, 34 in Vietnam and others in Asia. Hence, the factories are situated at reputed markets and the organisation is successful to arrange quality raw materials, upgrade the technical infrastructure and maintain cloud based integrated system to handle the operations online (Nike, 2021c).

Manufacturing methods of the brand

Sustainability and ethical code of conduct are mandatory to sustain in the market and run the operations efficiently. Nike is an innovative organisation with design creativity and technological innovation for better organisational activities. In 2013, it has been recognized as the most innovative company beating the position of Amazon and Uber. The lean management principles and supply chain are useful for Nike to sustain in the competition and expand their operations across the international markets and in this regard the major factors that the brand focuses on are raw materials, manufacturing, distribution and end customers handling. Nike utilises six major raw materials which are polyester, rubber, foam, cotton and synthetic leather as well as original leather. The organisation is successful to source the materials through lean system and supply chain management. The distribution network of Nike is also efficient to deliver the final goods to the customers and these operations have environmental impacts due to energy consumption and increasing carbon footprint (Sroufe, 2018). 71% of the Nike footwear and apparel products use at least some recycled materials. Nike is also efficient to cut their energy consumption where in 2015, 54M pounds of factory scrap was transformed into premium materials used in Nike footwear and apparel products (Nike, 2021b).

By 2025, Nike focuses on 100% renewable energy in its owned and operated facilities which is already implemented through on-site renewable energy generation at some of its largest facilities. Nike’s “Reuse a Shoe” Program has recycled approximately 30 million pairs of shoes which are also considered as great strategy of the firm to improve recycling practice and reduce waste. The distribution sustainable practices are also effective where upstream focus suppliers are efficient to maintain 785 contract factories, 900 million units produced annually, lean manufacturing activities. Downstream focused on consumers are also beneficial to handle the clients across the globe and create community programs for brand interaction. Improved working relationship is also another ethical practice, where Nike is successful to main follow employment opportunity and fair labour association are beneficial to maintain strong employee base and operate the manufacturing activities strategically (Nike, 2021c).

Technologies and innovation

The technological innovation is the major strategic planning of Nike to explore alternative ways for developing green environmental footprint. Nike Air is one of the latest technologies utilised by Nike to use gases encased in urethane plastic to provide cushioning. The make-up of the gas and the strength of the plastic as well as their placement within the shoe, gives great cushioning without losing performance (Sroufe, 2018). On the other hand, Nike Fly wire is also new innovation of the organisation, where Fly wire is the result of many years of research and trials, and is effectively a shoe made of thousands of stitches, rather than pieces of fabric. The company is also efficient to tackle the issue of water consumption and in this regard the latest innovations are fruitful for Nike to reduce water usage and develop water friendly fabrics to produce their products. The strategies of innovating low water materials and technologies are beneficial to process the materials in the products. Using less to build, the capabilities of the supply chain is also possible and the goal of reusing principle is also implemented successfully by scaling up the closed loop water supply with the materials to eliminate the water withdrawals (Nike, 2021c).

Managing scale through industry collaboration mainly in water stresses areas further help the brand to improve the standard of the operations and run the business ethically. New technologies boost the efficacy of the organisation in recycling process, water treatment and industry collaboration for using the materials successfully and produce the best quality products (Dupree, 2020). Development of the Sustainable Apparel Coalition’s Higg 3.0 Facility Environment Module and proliferation of the Zero Discharge of Hazardous Chemicals (ZDHC) Foundation’s wastewater guideline also provide an opportunity to the organisation for better management. These latest innovation and technological advancement further help the organisation to identify the key performance indicators and achieve the future success. In manufacturing, Nike diverted 92% of total waste from landfill and incineration without energy recovery. In 2014, Nike has reached a major step by introducing a water-free dyeing facility in Taiwan. The factory features high-tech equipment designed to eliminate the use of water and process chemicals from fabric dyeing and the innovation “ColorDry” is hereby effective to reduce water usage and enhance green environmental footprint (Nike, 2021d).

Product life cycle management

Nike has taken sustainability beyond its supply chain and embedded it as innovation in the business. For example Nikes Flyknit shoes is the great innovation of the organisation where the shoes are made from specialised yarn that knits the shoe body into one piece rather than stitching together multiple pieces of a traditional shoe (Elisa et al., 2020). This process is efficient to maintain lighter weight, higher performance shoe while reducing 60% less fabric waste than that of a traditional shoe. It is hereby a great innovation towards managing environmental sustainability. The organisation also produces soccer kits for the Euro Cup from recycled water bottles that also have great environmental impacts towards green footprint.

In order to maintain product life cycle and run the business ethically, the organisation focuses on shifting the entire supply chain towards a closed loop ecosystem embedding sustainable innovation from design to its finish. Nike is successful to renovate the whole supply chain system and develops a close loop where there are 600 manufacturing partners outside of the USA who are cooperating for having a tremendous environmental sustainability impact on the world. Nike aims at reuse a shoe, as well as managing the sustainability projects through maintaining emission, energy use, water and waste management (Schönauer, 2018). Through leadership and management, research and development as well as maintaining transparency and accountability, the organisation tries to develop product life cycle and ensure sustainable practices in running their business ethically.

The product life cycle strategy of Nike are focusing from raw materials to disposal, water resource management and recycling the external consumer goods, for balancing the design innovation and maintaining good product life cycle, the organisation focuses on sustainability led to an innovation, where the designers encourage to think about the entire process of sourcing the materials to consumer use or disposal, there are 1500 material vendors who supply the raw materials to Nike, among them 57% have signed contracts to utilise green chemistry. As per product innovation at Nike, there are recycle polyester in 31.5 million garments and it is considered a great movement towards recycling process of Nike and it further enhances sustainability practices. Additionally, utilising organic cotton is also a sustainable solution to maintain product life cycle as well as the organisation utilises 100% certified leather working group for producing the shoes, accessories and apparels. The organisation has developed 2 sustainable rubber formulations as well as Nike colordry towards zero water used save 30 litters of water per shirt (Nike, 2021d).

Effects of sustainable practices on key performance indicators

The major innovation of Nike is commitment to reducing the carbon footprint as well as innovation manufacturing system, keeping human voice at the heart of everything from manufacturing to marketing. Developing the new palette of sustainable materials, inventing close loop supply chain management, moving towards renewable energy resource and diverse workplace and inclusive culture are useful for the organisation to maximise the organisational performance in a sustainable way (Yadav & Veettil, 2021). The above mentioned sustainable practices of Nike are useful for the brand to improve their performance and maximise revenue. The major key performance indicators of Nike are earning per share, digital sales, footwear sales, gross margin and profitability as well as market share. The organisation in the year of 2018-2019, it is successful to ensure rise in 18% earning per share as well as the digital sales of the company has also been increased by 36%. The footwear sales were increased by 10% and Nike purchased 17.8 million shares in the global market. In fiscal 2020, digital sales increased 47%, or 49% on a currency-neutral basis, with all geographies growing strong double-digits (Nike, 2021d).

Conclusion

Nike is hereby an innovative company ensuring green environmental footprint by latest technological advance, utilising renewable energy resources, quality materials with recycling scope and high quality shoes. The latest technologies including close loop, Nike Air and new palette of sustainable materials are beneficial for Nike to maintain sustainable practices and maximise their performance in long run. The major constraints of Nike are lack of skilled workforce; slow implementation has toward zero carbon footprint and lean supply chain management. It is crucial to recommend some strategies for Nike to renovate the business and make the vision and mission fulfilled.

Recommendations

Nike needs to focus on Less Energy and Reducing Emissions to secure future sustainable development. The organisation must implement close loop supply chain system to reduce water usage and increase the practice of water-free dyeing facility across the factories around the international markets. Nike must implement electric cars in managing global supply chain and distribution network, where it would be possible to reduce greenhouse gas emission and ensure green environmental footprint. Transformation towards eco-friendly materials including organic and recycled cotton and polyester would be the best strategy for Nike to manage the sustainable practices and maintain the manufacturing units efficiently. Nike also needs to focus on ethical practise by implementing Human Rights practise, maintaining transparency and accountability. The company must improve recycling process by using paper packaging system and utilising recycling materials to manufacture the sustainable products. In all the factories across the globe, Nike must invest high tech equipment such as water free dying facility through Nike colordry, Nike Flyknit for reducing waste and recycled polyesters.

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Reference List

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Sroufe, R., (2018). Integrated management: How sustainability creates value for any business. London: Emerald Group Publishing.

Yadav, N. & Veettil, N.M.K., (2021). Developing a comprehensive business case for sustainability: an inductive study. International Journal of Organizational Analysis.