Professional Services

The Natural Step – Sustainability Life Cycle Analysis

Challenge

Overview

The Natural Step has developed the Sustainability Life Cycle Assessment (SLCA) tool for assessing product sustainability. The SLCA can be described as tool that provides a strategic overview of the full scope of social and ecological sustainability at the product level. It results in an analysis – using colors instead of numbers – that allows the company to see the major impact of today’s product through the whole lifecycle in relation to principle requirements of sustainability.

Rationale Behind the SLCA Tool

Traditional assessments of sustainability often begin with a particular problem. This can lead to
incremental efforts to be ‘less bad’ with insufficient consideration of strategic pathways towards full
sustainability. The SLCA tool uses an alternative approach that defines system boundaries in relation to
the objective of sustainability. This encourages us to consider everything relevant to sustainability and
not just look for and assess the most visible or currently known impacts.

The key issue is to enable designers and decision makers to focus upon the sustainable development
potential of the product and thereby ‘design out’ unsustainable aspects throughout the whole life cycle.
The question we ask is: How can the product be developed to meet human needs in a sustainable society
while reducing the risk of societal violation of the basic sustainability principles?

How it Works

The SLCA analysis begins with an overview of the whole system, considering all issues in the lifecycle that
are in conflict with Basic Principles of Sustainability (the four system conditions described on page 3). A
series of questions are completed for each life cycle stage to assess adherence to the system conditions.
The results from the questions are displayed in a five by four matrix with colors assigned based on the
answers. The colors provide a visual clue to where sustainability ‘hotspots’ occur in the product life cycle.

Multiple Uses of the SLCA Tool

The SLCA can be used for different purposes including, assessment, education and communication,
depending on the needs of the user.

Assessment

• Assess on a product level the companies current impacts and current initiatives with respect to the
  TNS Framework
• The summary matrix will indicate the areas of concern and identify of areas for future action and
  prioritization
• The questions can be revisited after a period of time, allowing a team to see where progress has
  been made on addressing “don’t know” areas and turning “no’s” into “yes’s”.

Education

• The process of completing the questionnaire raises awareness amongst the participants of
  sustainability in general and of the impacts of their own product.
• By gathering a range of people from across the whole lifecycle of a product, the process of
  completing the SLCA transfers learning across the team.

Communication

• Internal communication of sustainability issues can be enhanced by visual color representation in the
  SLCA summary matrix.
• The summary matrix can quickly and easily communicate the major areas of concern to people who
  may not have been involved in completing the questions.
• The SLCA can be used on any product, allowing separate product teams to communicate with a
  shared understanding after following a consistent process.

Background: SLCA and its Relationship to TNS Framework

The Natural Step Framework is often presented as a step by step planning process called the ABCD
planning methodology, as depicted below:

In the A-step, we undertake training to share the framework, including the funnel metaphor
representing the sustainability challenge, the process of backcasting, and the four system conditions.
These are the conditions for sustainability towards which we are working to comply in the long term:

In a sustainable society, nature is not subject to systematically increasing:

 

2. Concentrations of substances produced by society

3. Degradation by physical means

and, in that society, people are not subject to

4. Conditions that systematically undermine their capacity to meet their needs.

1. Concentrations of substances extracted from the earth’s crust

The SLCA tool corresponds to the B-step (baseline analysis) whereby sustainability issues can be
assessed with respect to the goal of sustainability using the sustainability principles above. It helps to tell
us our starting point and what we need to address from a sustainability perspective.

Creating a vision within the constraints of the sustainability principles is necessary (Step C) to establish a
more specific direction and set of goals to work towards.

Finally, actions can be prioritized by considering the gap between B and C (where we are and where we
want to be in the future) in the D-step.

Using the SLCA

Outline of a participatory Process

The development of the SLCA is intended as a participatory process, with relevant key functions and
input from the company’s personnel. Standard process for performing a Sustainability LCA for a product,
is within a period of 2-4 months. The process is important for creating awareness, knowledge and
understanding of the product and sustainability. Between meetings the SLCA will be continuously
developed for the specific product. During the process the project group will have “homework” and TNSI
will act as facilitator and give feedback.

SLCA Tool

The SLCA tool creates a matrix with each square representing the adherence to the system conditions
against each life cycle stage. Underpinning each square is a series of questions to ascertain the key
impacts of the life stage for each of the system conditions.

By utilizing the system conditions for sustainability, the SLCA has been developed with a focus on
‘designing out’ unsustainable aspects throughout the whole life cycle. This is a more strategic and
systematic approach, as opposed to a focus on simply minimizing the known negative impacts. It reduces
the chance that by creating a ‘solution’ in one part of the system that problems are simply transferred
somewhere else or that entirely new and unforeseen problems are being unintentionally created. It is of
little use to create an assessment tool focusing on only one point in the life cycle of products if the
solutions generated problems elsewhere in the rest of the supply chain.

SLCA Questions

There is an e-version of the SLCA questionnaire that has been created as an excel file. There is a set of
questions for each cell of the SLCA matrix. In total there are around 140 questions. The Questions deal
with both:

1. Current status with respect to sustainability principles; and

2. Actions to make progress

The questions are designed to be answered in a ‘yes’ or ‘no’ manner and are categorized 3 ways:

 

2) by system condition – to assess how products are unsustainable from a full systems perspective

3) by ‘current status’ and ‘progress’ – to provide a full measure of where we are today by recognizing

both sustainability impacts and activities already initiated to address them.

1) by life cycle – to provide a life cycle view of product impacts

The bullet points listed below gives the big picture and summarizes the areas covered by the questions
for each life cycle stage, with examples from one company.

The questionnaire should be answered by a team that has knowledge across the lifecycle of their product
or service (e.g. marketing, logistics, production manager, supply manager, design). The length of time it
takes to complete the questionnaire depends on the depth of knowledge available on the day and the
amount of discussion that takes place. The questionnaire can be completed in one afternoon or
completed over a period of time by coming back to it with additional information that may change an
answer.

From the answers a colour-code is automatically allocated to each cell and this builds to reveal a
completed matrix showing where there are ‘red’ problem areas through to ‘green’ areas where they are
doing well (see below).

Strategy

Result

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Transportation

OOCL – Fuel Reduction

Challenge

The driving force behind our initiative is the recognition that as a responsible corporate citizen we needed to reduce our greenhouse gas emissions from all OOCL owned vessels. The main stakeholders are our customers, employees, and vendors throughout the supply chain.

Strategy

In 2001, we voluntarily began a fuel saving program, which is the most effective way to reduce greenhouse gas emissions, especially C02. Actions and initiatives taken include the following:

− Weather routing systems to provide shorter routes safely

− Regular maintenance helps to keep the vessel clean and maximize its efficiency and fuel burn

− Optimum trim (balance of cargo) and minimum ballast water, helping to minimize fuel consumption

− We conducted a case study of the OOCL China which managed to sail with zero ballast and we endeavour to achieve this or minimal ballast

− Slow steaming to minimize fuel consumption: By changing a 5-ship to a 6-ship loop in the Transpacific trade or a 9-ship to a 10-ship deployment in the Asia Europe trade:

 

Results

 

These results prove our successful initiative to reduce fuel consumption. The business case is also that reduced fuel consumption means cost savings for the company.

This action drove innovation in terms of strategy and technologies on board our vessels.

Site Link:
OOCL.com

Result

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Professional Services

Schneider Electric – David Suzuki

Challenge

Schneider Electric helps the Dr. David Suzuki Public School make the most of their energy

The Greater Essex County District School Board has awarded Schneider Electric and its partner H&E Comfort Controls a contract to provide building automation, power monitoring and lighting control systems for the school board’s Windsor, Ontario-based Dr. David Suzuki Public School.

Currently under construction, the Dr. David Suzuki Public School will showcase innovative and proven environmental and energy efficient technologies – such as recycled grey water, green roofing, solar and geothermal heating, daylight harvesting and renewable energy sources demonstrating a new world of possibilities in educational facility design. Its goal is to become Canada’s first LEED Platinum educational institution.

The Dr. David Suzuki Public School is one of many themed schools. Unique to the Greater Essex County District School Board, each new school built by the Board since 2003 has been given a theme, which not only provides an instant identity, but also ensures the building is part of the students’ educational experience.

Complete, integrated technologies will maximize building energy efficiency

To achieve their goal of creating a LEED Platinum school that is also a learning tool for its students, the Greater Essex County District School Board selected suppliers who could offer innovative energy management solutions.

H&E Comfort Controls, a TAC partner, has a proven track record with the Greater Essex District School Board, having installed Building Controls in 79 of their buildings. This firm has also provided building automation to many projects at Windsor Regional Hospital and the University of Windsor. So when the school board decided to build the Dr. David Suzuki School, they automatically included H&E Comfort Controls in their discussions.

Proposing the TAC Continuum Building Control platform with its seamless integration into the Schneider Electric suite of products (lighting, VFD, metering) H&E Comfort Controls and Schneider Electric Canada were awarded this high visibility project. This complete portfolio of integrated technologies will maximize building energy efficiency, thereby minimizing the carbon footprint of this facility.

For more information about the Dr. David Suzuki Public School Project visit:

http://www.gecdsb.on.ca/schools/newschools/suzuki

http://www.gecdsb.on.ca/schools/newSchools/suzuki/webcamWest.htm

For more information on Schneider Electric, visit www.schneider-electric.ca/services

Strategy

Result

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Professional Services

The Natural Step – Nike

Challenge

Running a Cleaner Race

With annual revenues of $18.6 billion, Nike, Inc. is the world’s leading manufacturer of athletic shoes, apparel and equipment. Nike directly employs 30,000 people around the world, 6,000 of whom work at Nike World Headquarters near Beaverton, Oregon. As of 2006, Nike products were manufactured by nearly 800,000 workers in 700 contract factories located in 52 different countries.

As one of the biggest brands in the business, Nike became a lightening rod for criticism in the 1990s when activists began to publicly denounce labor conditions in its overseas contract factories. Like others in the industry, Nike’s initial responses were defensive and reactive. In the years that followed, however, the company’s policies and practices reveal a marked shift toward proactive responsibility and engagement with stakeholders.

In 1998, The Natural Step began to work with Nike to help it apply the principles of sustainability to its business operations, and the company formalized its commitment to sustainable commerce with an official policy statement later that year. Hundreds of Nike employees were trained to use The Natural Step Framework between 1998 and 2001, leading to numerous innovative programs to further its sustainability goals. In 2008, Nike partnered with The Natural Step again to help assess and further develop its approach to product innovation by defining a long-term vision for sustainable products. The resulting North Star vision and innovation goals position Nike to become a leader in sustainable product innovation and navigate toward a sustainable future.

From Humble Beginnings to Global Player

Nike began as a partnership between University of Oregon track coach Bill Bowerman and one of his runners, Phil Knight. Bowerman thought he could improve runners’ performance with better equipment, while Knight, a graduate student at Stanford Business School, wanted to test out his plan to import high-tech, low-priced athletic shoes from Japan. Calling themselves Blue Ribbon Sports, the pair invested $500 each for their first shipment of Japanese shoes to Oregon in 1962. Less than a decade later, the company‟s revenue had grown from $8000 to nearly $2 million and its staff had increased to 45.

Re-named Nike, after the winged goddess of victory, the company went public in 1980, by then representing 50% of the US running shoe market. By the end of 1982, every world record in men‟s track was being set by athletes wearing Nike shoes, establishing the company as the dominant global force in athletic shoes and apparel.

Responding to Changing Expectations

In practice, sports apparel and footwear production is rarely managed directly by brand owners, but is contracted out to supplier factories, many of whom further sub-contract the work to other factories and to home-workers. By the early 1990s, it became clear that the rights of many contracted workers were not adequately protected by the state or contract factory. Nike drew heavy criticism for contracting to factories which allegedly violated minimum wage and overtime laws and used child labor.

As one of the most visible brands in the world, and the dominant player in its market, revelations such as these brought Nike into the centre of unprecedented controversy over labor rights in a globalized economy. In an article by the Clean Clothes Campaign about Nike’s labor and environmental practices, US activist Max White explained the reasons many activists were focusing their efforts on Nike. “Nike is not the worst company on the planet. Reebok and others use the same workers and contractors in the same countries. Nike is, however, the largest such company…If Nike reforms, they will trumpet the change and other manufacturers will have to follow.”¹

The controversy of the 1990s compelled Nike’s management to re-evaluate the company‟s standard operations. Nike drafted its first code of conduct for contract labor in 1991 and distributed it to factories the next year, making it the first code of its kind for the sporting apparel industry. All contract factories were required to sign the document, which banned the use of forced or child labor and committed them to compliance with local laws on wages, benefits, overtime, and environmental protection. The code was later amended to include the right to free association and collective bargaining. In 2005, Nike became the first company to publicly release supplier details of Nike branded products.

In 1993, the Nike Environmental Action Team (NEAT) was formed as an umbrella for all environmental staff and functions in the company. NEAT’s mission was to develop answers to the problems that Nike’s production – and the sports industry as a whole – pose to the environment, and to integrate the solutions into the company’s business practices. Many at Nike viewed the formation of the NEAT division as building on a tradition of honoring nature in Nike‟s physical surroundings. “The ethic was always there,” notes Sarah Severn, Director of Corporate Responsibility Horizons for Nike, “but we didn’t see early-on how it applied systematically to the business.” This organizational realignment set the stage for a re-visioning of the company’s environmental policy, led by Severn.

“Corporate responsibility must evolve from being seen as an unwanted cost to being recognized as an intrinsic part of a healthy business model, an investment that creates competitive advantage and helps a company achieve profitable, sustainable growth.”

-MARK PARKER CEO, NIKE INC.

¹Max White, as quoted by Clean Clothes, http://www.cleanclothes.org/companies/nikecase.htm

The Natural Step to a Sustainable Nike, Step One

Severn joined Nike through their European offices in 1993 in a marketing strategy role, but her personal interest in the company‟s environmental programs drew her to the US to help build NEAT in early 1995. After reading Paul Hawken’s Ecology of Commerce, Severn brought the NEAT team to Portland, Oregon to hear Hawken speak about the book and The Natural Step Framework.

The more Severn and her team learned of The Natural Step Framework, the more they came to see it as the essential structure for achieving sustainability. Aside from meeting financial goals, the four principles of sustainability were the ‘real rules’ because they define the natural laws that a sustainable business can operate within. Severn began to see her challenge as helping Nike’s senior management change its view of sustainability from a peripheral or tactical issue to a strategic opportunity that is central to the company’s business. Making a case that sustainability should be a core tenet of the company’s mission proved to be an easy link; “after all, how can you have a company that’s about health and fitness and yet be degrading the environment in your operations?” asks Severn.

The Principles of Sustainability ² To become a sustainable society we must…

1. Eliminate our contribution to the progressive buildup of substances extracted from the Earth’s crust.

2. Eliminate our contribution to the progressive buildup of chemicals and compounds produced by society.

3. Eliminate our contribution to the progressive physical degradation and destruction of nature and natural processes.

4. Eliminate our contribution to conditions that undermine people’s capacity to meet their basic human needs.

² To learn more about The Natural Step Framework and the principles of sustainability, visit http://thenaturalstep.org/our-approach

Formalizing Their Commitment

In late 1997, NEAT began rewriting Nike’s environmental policy to reflect the company’s emerging focus on sustainability. Formally approved by Nike senior management in June 1998, the policy committed the company to the following far-reaching initiatives. In the same year, CEO Phil Knight announced new initiatives to improve factory working conditions and improve conditions for contract workers:

• Integrate the principles of sustainability into all major business decisions.
• Scrutinize environmental impacts in day-to-day operations and throughout every stage of the
  product life cycle. Design and develop product, materials and technologies according to the principles of sustainability.
• Promote sustainable practices throughout the supply chain and seek business partnerships with suppliers
  who operate in a similar manner.
• Educate employees, customers, and business partners to support the goal

Building Capacity for Sustainable Development

NEAT began educating employees in the principles of sustainability and The Natural Step Framework as early as 1995. After attending a five-day TNS US workshop in Chicago, Laila Kaiser, Sustainability, Learning and Communications Manager at Nike, developed educational programs on sustainable product design for 700 employees, bringing the topic of sustainability to the fore.

In order to further integrate The Natural Step principles for sustainability into the fabric of the business, Nike launched its Sustainability Initiative in 1998 to build internal skills and knowledge about sustainable business development. More than 400 people participated in the nine-month long Shambhala action and learning program, which resulted in the birth of a considerable number of ideas and plans to make Nike more sustainable. According to Kaiser, the product and process innovations delivered a short term return on investment of $2 million USD over nine months.

In addition to the specific project achievements, the effort also produced several important qualitative results:

• Built a critical mass of formal and informal leaders
• Shared learning and “best practices” company-wide
• Created a common language, framework, and vision for sustainable business practices
• Improved employee morale, resulting in increased employee retention and job satisfaction for
  those that were engaged in sustainability efforts
• Created a base for metrics to be used in Nike’s first Corporate Responsibility Report
• Laid the groundwork for future sustainable design and innovations

Getting Down to Action

Over the years, Nike has undertaken a number of initiatives addressing the environmental life cycle of its products –from design to manufacturing to marketing to post consumer use – and their impacts on living systems at each step. In August of 1999, Nike began a process to phase out polyvinyl chloride, or PVC, a durable and inexpensive plastic known as vinyl, from its products due to the serious concerns around its manufacture and disposal. Given that this compound can comprise up to 30 percent of a shoe, the decision was an important step in Nike’s path to sustainability. Removing PVC required cooperation throughout Nike’s supply chain and innovation from design and production teams. Today, PVC has been eliminated from all but a few products.³

In addition, Nike has been incorporating organic cotton into its T-shirts and knit products since the late 1990s. Conventional cotton production uses more chemicals per unit than any other crop, and accounts for a total of 16% of the world‟s pesticides.&sup4; In order to reduce its contribution to the progressive buildup of chemicals in society, Nike has committed to increasing the amount of organic cotton in all of its garments to at least 5% by 2011.

In an industry that has been traditionally dependent on large amounts of petrochemical-based solvents, Nike reduced 95 per cent of its solvent use between 1995 and 2003 by using water-based cements, primers and cleaners. The hazardous chemical reduction program has contributed to safer working conditions, a reduced environmental impact, and substantial cost savings for Nike factories. Estimates of overall raw-material cost savings were about $4.5 million in 2003, without counting savings related to labor, storage, or shipping.

Nike’s Reuse-A-Shoe program grinds used athletic shoes and uses the recycled materials in surfaces for basketball courts, athletic tracks, artificial soccer fields, playground fall protection, and other recycled products. Since its 1990 inception, the program has successfully kept more than 21 million postconsumer and defective shoes out of landfills.

Finally, while the boxes used to package Nike shoes were already 100 percent post-consumer recycled material and made in a closed loop system, in May 1998 new machine technology was applied in the manufacturing of all Nike corporate boxes, reducing the raw material fiber by an additional 4,000 tons and saving the company $1.6 million annually. In 2008, Nike‟s shoe box materials and construction were redesigned, which will eventually reduce the materials by 3 per cent and result in an estimated $6 million savings.

“This is good for the environment, and good from a profitability standpoint. Our stakeholders and our stockholders want to see that.”

LORRIE VOGEL, GENERAL MANAGER, NIKE CONSIDERED

³ Nikebiz website. Sustainable Materials (Accessed October 20, 2008) http://www.nikebiz.com/responsibility/considered_design/sustainable_materials.html

&sup4; Bircher, Sam. (March 2007) Institute of Science in Society Press Release: Picking Cotton Carefully.

Genesis of a Considered Approach

In 2005, Nike launched a line of shoes designed to incorporate the principles of sustainability. This line, named Considered, marked a shift in the way sustainability was addressed at the design level and the genesis of a more considered approach to Nike‟s business practices. To qualify as Considered, Nike products must be significantly more sustainable than conventional products. Considered is best described as a design ethos that focuses on creating products made with fewer toxics, less waste, more environmentally preferred materials and sustainable product innovation. Combining sustainability, performance and innovation, Considered reflects Nike’s ongoing commitment to athletes as well as the social and environmental playing ground that consumers, employees and stockholders depend upon.

Nike’s Considered group is the team of employees responsible for applying the Considered design ethos to products and business models throughout the company. As sustainability becomes mainstreamed in Nike’s business operations, initiatives are increasingly being moved forward by employees with backgrounds in business or design. A case in point is Lorrie Vogel, General Manager of Considered, who left her position as an Innovation Director at Nike to head the division. “When I started with Considered, one of my goals was integrating us into the business model as a whole and getting designers more involved,” Vogel recalled.

Creating Incentives for Change

In order to better evaluate the environmental footprint of all Nike products and develop incentives for change amongst Nike design teams, the company developed the Nike Considered Index. The index uses a lifecycle approach to examine design and production factors such as material selection, solvent use, garment treatments, waste, and innovation for footwear and apparel. Considered products are rated as gold, silver or bronze.

Already, the index has been a key leverage point for Nike designers, successfully channeling the company‟s competitive nature to focus on sustainable design innovation. The company exceeded its own initial expectations for the number of products that meet Considered design standards as designers rose to meet the challenge of developing more sustainable products. Prominent athletes such as Steve Nash and Michael Jordan have promoted gold standard shoes, adding star power to the Considered line. The Steve Nash “Trash Talk” shoe was among the first sports performance shoes to be rated gold under the Considered Index.

Nike plans to share the Index with the sports industry in 2009 in the spirit of industry-wide collaboration towards sustainability. The company’s goal is to have all footwear meet the bronze standards at a minimum by 2011, all apparel by 2015, and all equipment like balls, gloves and backpacks by 2020. “If we do this across the company, we will have a 17% reduction in waste, a 20% increase in the use of environmentally preferred materials, and maintain our 95% reduction in volatile organic compounds (VOCs),” Vogel explained. “Once we hit our goals, we‟ll put out a new index that will take us even further.”

Taking the Natural Step, Part Two

In 2007, The Oregon Natural Step Network (ORTNS) celebrated its 10th anniversary at the Tiger Woods Centre at Nike Global Headquarters outside of Beaverton. “The anniversary event was a milestone for both Nike and The Natural Step,” Regina Hauser, Executive Director of the Oregon Natural Step Network recalled. “Both of our organizations had come a long way in our understanding and application of sustainable development over the past decade. Nike’s understanding of the connection between sustainability and success made it an important part of that celebration.”

The event, convened around the theme of sustainability and success, featured talks by author Bob Willard (The Business Case for Sustainability), Ray Anderson, CEO of Interface Inc., and Dr. Karl-Henrik Robèrt, founder of The Natural Step. Dr. Robèrt introduced the Real Change Partnership program, an international research initiative linking university research specializations with real world application using The Natural Step Framework.

As Nike‟s lead on sustainable product innovation, Lorrie Vogel was listening attentively. When Sarah Severn introduced her to Dr. Robèrt, Vogel described some of her team‟s work on sustainability, and commented that their biggest challenge was making decisions that involved trade-offs between different sustainability goals.

“Dr. Robèrt said, “Well, where do you want to be?‟” Vogel recalled. “For me, that was a bit of a light bulb moment. It made me realize that we were spending a lot of energy on how to reduce our overall impacts, but hadn‟t clearly defined a vision of where we wanted to be in the future. We needed that vision to help us choose projects based on what will get us closer to our end goal.”

In response to a request from Nike, The Natural Step convened an international team of sustainability experts from The Natural Step offices in the US, Canada, Sweden and from Real Change partner university, the Blekinge Institute of Technology (BTH). The team’s mandate was to help Nike define a vision for sustainable shoes and sports apparel and assist with outlining smart, step-wise initiatives to move toward it.

Although The Natural Step often begins projects with a focus on building awareness and capacity around sustainability in an organization, Nike’s previous training and the extensive sustainability work they had already pursued made this step more of a refresher. As Chad Park, Senior Sustainability Advisor from The Natural Step Canada, explained, “Working with Nike was unique in that there was very little convincing needed about the importance of sustainability for the business, the value of a rigorous science-based approach, and the merits of the backcasting method of The Natural Step Framework. Instead, Nike was more intent on applying the Framework to their context. Beginning a project with this level of awareness, respect and commitment makes it possible to get much further in a short amount of time – and achieve some deep change.”

An initial TNS training provided an introduction to the Framework for newer employees and an update for others. Severn, who had participated in the original TNS trainings a decade earlier, commented: “For me the big piece was watching younger generations of designers and developers go through the TNS workshops. It was great to see them get so excited about sustainability. They agreed that we need to be working toward sustainability as a company, and they could see how the TNS training would be meaningful in their jobs.”

The Natural Step project began with an assessment of Nike’s work to date by interviewing employees and spending time at the global headquarters in Oregon. Jim Goddard, Director of Considered Innovation at Nike, reflected. “Having the TNS team asking questions that weren’t naïve and were obviously grounded in experience helped tip the Nike interviewees to engage with them more – that was a big help in getting started.”

The TNS team found that the support from upper management and Nike’s experience in sustainability initiatives were significant strengths. Programs like the Considered line, the use of organic cotton, Reuse-A-Shoe and many others provided a rich base of experience and success to move forward from. The Natural Step team used its Sustainability Lifecycle Analysis (SLCA) tool to develop an understanding of what Nike had already accomplished and identify the remaining gap toward sustainability, including specific areas they could focus on in the future. Although Nike already had a strong understanding of their current operations, The Natural Step was able to offer a unique perspective, informing their analysis with a strong systems-thinking approach using the principles of sustainability. One area that emerged from the SLCA was the need to expand the scope around toxic substances. While Nike had made very strong progress towards the elimination of known toxins from its products, The Natural Step helped them expand their thinking to include all persistent and systematically increasing substances, whether they are known to be toxic today or not. In addition, The Natural Step Framework’s inclusion of human needs as an essential part of sustainability helped Nike integrate thinking around social sustainability beyond corporate responsibility and into its overall sustainable design principles.

Finding Nike’s North Star

After undertaking a baseline assessment of Nike, The Natural Step began a series of visioning sessions to co-develop Nike’s long term sustainability aims. The result is a compelling vision that can guide not only the Considered line, but Nike as a whole. The vision begins with an inspirational statement that describes the goal at a high-level. “We call it an “audacious‟ goal, knowing that we‟ll be spending a lot of time making little bits of progress toward it,” Goddard explained. “But at least we‟ll be making progress in the right direction. It is a far off, guiding light that lets us make sure we stay on track.”

The second part of the North Star is a set of specific innovation goals that will provide concrete direction to designers and ensure that the North Star can be translated into practical short, medium and long-term goals. One of the key goals is to design products that are fully closed loop, using the fewest possible materials and assembled in ways that allow them to be recycled into new products or safely returned to nature at the end of their use. Other innovation goals address healthy chemistry, water stewardship and climate stability. Underpinning these innovation goals are The Natural Step sustainability principles, which will serve as an ongoing guide.

Nike’s Innovation Goals

1. Closing the Loop

2. Sustainable Materials

3. Climate Stability

4. Water Stewardship

5. Thriving Communities

6. Athletes as Change Agents

One of Nike‟s strengths is the company’s emphasis on innovation and dynamism. Helping their designers understand the mechanisms of un-sustainability allows them to create their own innovative solutions for moving towards Nike‟s North Star. As Vogel explained, “Designers want to do the right thing. What they do best is problem solve, so we needed to make sure they understood the problems of un-sustainability so they could design the best solutions.” The Natural Step’s principles of sustainability form the “rules of the game” for designers, whose challenge is to work within them to develop more sustainable products and bring Nike closer to its North Star.

Last Words

Much has changed since Nike first began to work with The Natural Step on sustainability over a decade ago. Sustainability is becoming a mainstream concept and technical innovations are becoming increasingly available. Nike’s next steps include looking to universities and other companies for innovative ideas to supplement their own. “We used to be very much go-it-alone; we thought we had to solve all the problems ourselves.” Severn notes. “We have learned that sustainability requires us to work collaboratively to find solutions with other partners.”

As Natural Step Senior Advisor Richard Blume notes, Nike has already begun to collaborate across the industry through work with Levi Strauss and the Organic Cotton Exchange. “Nike has already shown a lot of leadership in that regard. They are trying to change the industry and engage other companies to do the same,” he said.

Nike will continue to refine its innovation goals and create action plans to move forward on each individual goal. An important element of their work is to understand how they can contribute to healthy communities and human needs by designing more sustainable products. The innovation goals address the social component of sustainability by emphasizing the importance of returning clean water to communities and removing toxic materials from the waste stream that might otherwise end up in landfills.

Three of Nike’s Considered products were showcased during the 2008 Beijing Olympics: the PreCool Vest, which keeps athletes cool before performance, Swift running and rowing apparel, and medal stand shoes. The vest is composed of recycled material from the Nike Grind program, and is constructed without glue or chemicals. The running and rowing apparel uses 100% recycled polyester. Nike reports that its use of recycled polyester has diverted 20,700 pounds of polyester waste from landfills. The medal stand shoe is made using Nike‟s environmentally preferred rubber formula, which reduces the use of harmful chemicals by 97%.

Nike launched the Considered design ethos and sustainable line of footwear and apparel in New York City in October 2008. The event was held at 7 World Trade Center in Manhattan, the first commercial office building in the city to receive the Leadership in Energy and Environmental Design (LEED) certification. In an interview with the Reuters News Agency, CEO Mark Parker explained, “We’re trying to reduce costs and improve margins, to make the company more profitable while reducing the footprint we have on the planet.” Parker announced that Nikes long-term vision for Considered is to design products that are fully closed loop. These would be produced using the fewest materials possible and designed for easy disassembly, allowing them to be recycled into new products or safely returned to nature at the end of their useful lives.

In an effort to continue to build employee capacity and engagement in Nike’s sustainability efforts, the company is making an online sustainability course available to 100 of its employees worldwide. The Natural Step’s one- and four-hour interactive, online courses provide practical sustainability education and help learners apply sustainable development concepts to their day-to-day work and lives.

ADDITIONAL INFORMATION

For more information on Nike’s sustainability work, visit www.nikeresponsibility.com

Strategy

Result

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Retail

Mountain Equipment Co-op

Challenge

Like any organization, MEC’s future is premised on the need to continue to either grow or evolve in some way. In an effort to ensure the continued delivery and relevance of our value proposition/ business model we spend a good deal of time looking out 10 to 15 years….trying to understand the changes in society and the environment (business and natural) in which we operate.

The only things we know for sure (in the exponential change and complexity of the global landscape) are that the winners will:

• Have learned how to “do more with less”, eliminate waste and have visibility of all of the stakeholders and resources within their supply chain. From primary inputs to customer end use. These are the driving forces behind our “green” initiatives.
• Have an adaptable and flexible culture with robust financial model

Our main objectives are to reduce the footprint in all of our operations, working to do more with less and eliminate waste while remaining relevant and financially healthy. We have approached these objectives by challenging each of our operational departments/ functions. The resulting major areas of focus and initiative have been:

Direct operations:

Buildings:

Objective: MEC operates retail stores across Canada and has a Head office and D.C. in Vancouver. Industrial buildings account for 13% of Canada’s GHG emissions and 14 per cent of all end-use energy consumption. Not only will energy increases add to the cost of doing business but when Carbon costing comes into effect this will add more cost into the system. The less energy we use the lower our future operating expenses will be. While our mid term objective is Carbon Neutral, our long term vision is energy neutrality.

Actions:MEC has a long history of building “green”. In an effort to further reduce all of the construction and operations impacts of our buildings we are finalizing a Green Building Code that guides our store development. This is a living document that considers Best Available Technology (BAT) at the time of building. It covers the footprint and embedded energy of material all the way through to final deconstruction and ensures we build the most energy and materials efficient buildings we can while delivering on a viable business case. Our energy purchases are via Bullfrog power and utilize renewable energy sources.Timing:

Green Building Code: Launch Spring 2010.

Recent buildings:

• Burlington Store. Fall 08. Feeds energy back onto Ontario grid via solar array
• Longeueil Store. 70% more energy efficient than an equivalent facility

Partnerships:

Canadian Green Building Council. ARUP

Results/ Costs/ ROI:

All of our buildings have a positive 12 year NPV and energy use in our newer facilities is 70% lower than an equivalent building. The feed in tariff opportunities offered by the Ontario government have allowed us to develop significant power generation facilities in our new Ontario buildings and feed back onto the grid. Energy expense cost savings reflect these initiatives.

Consumables

Objective: There is a significant waste stream that leaves the back door of a retail operation. Everything associated with this waste has an upfront cost. The elimination or re-purposing of this waste will result in increasingly lower costs as input costs increase. Our target was to cut our diversion rate to 90% by 2010 with a subsequent move to Zero waste in future. This includes end of life product we take back from our Customers/ Members. (Diversion rate is measured as everything that leaves the store. Fuel canisters, batteries, construction materials, staff garbage, food waste etc)

Actions:

We have scrutinized the product and transport packaging (see packaging section) and worked with municipalities and partners to develop re-cycling and composting options. “Dumpster dives” are done to audit waste and specific plans are developed around the regional/ store specific results. Staff have visibility of the audits and best practices and we have increased re-cycling containers and decreased trash bins. Relationships have been developed with recyclers of product from batteries to bicycle tires across the country.

Results/ Costs/ ROI

Our store diversion rate is currently running at 90%

Business travel

Objective: As an organization that sources product from around the Globe and has a nationally based store operation we have people traveling all the time. While air travel is not a significant part of our overall footprint we recognize that it is one of the most significant “per capita” forms of emission.

Actions:

I. The first step to managing travel is to measure one’s mileage. In late 2008 we moved all our travel to a single agent that is able to track all movement. This will be reported on an annual basis and offset.

II. We have moved meetings, where practical to the web via conferencing tools. While this has not replaced the need for travel it has allowed us to reduce mileage

Timing:

I. Our first year of offset will be 2009

II. We have been using web tools for the past 3 years. As the systems improve we gain better traction with their use

Results/ Costs/ ROI

I. Air travel offsetting is one of the few costs that has no direct business payback at this point in time

II. Remote meetings have allowed us to cut back on travel to our stores and one of our 5 annual Board meetings. There are cost savings and in addition improvements in employee quality of life as they need to travel less.

(Note: We are considering investing in the latest technology to improve the interactive nature of remote meetings. Due to the changes in technology and the medium/ small size of our business the financial case is not very attractive at this point in time but we believe it is an investment into the culture of communication of the future)

Indirect operations:

Transportation

Actions:

Inbound freight from Asia is confined to fast container ship. Port of entry moved from Vancouver to Richmond to cut truck distances. A large part of outbound freight to the eastern provinces has moved from truck to rail. We continue to look at such possibilities as pre-allocated vendor direct shipping from product coming from areas closer to our stores than our D.C. This remains an area of challenge for the future.

Timing:

2008

Results/ Costs/ ROI

2008 gross shipments were + 13% on 2007.

Gross GHGs were – 7% on 2007

Staff transport

Many of our staff are active and live in relatively close proximity to our urban situated stores and H.O.

Actions:

We provide showers, change rooms and bike storage in all of our facilities and endeavor to situate all of our facilities close to public transport where possible

Results/ Costs/ ROI

We have a high percentage of staff riding to work across the organization. While it has not yet been formally measured on an annual basis across the country it is the majority of staff in our stores.

Product:

We are aware that the single biggest impact in our business is that of the product itself. More specifically in the extraction/ growing of the fiber feedstock, the processing of the feedstock into yarn, the weaving of the yarn into material and the finishing and dying of the fabrics. Not only is this energy and water intensive but the processing relies on an exceptionally high chemical load to achieve the end product.

Actions:

As this challenge requires scientific and engineering expertise we have partnered with a Swiss based scientific organization (Bluesign) to work with the Chemical companies and Mills to work on input streams and processes to reduce the impact of the product. This process benchmarks chemicals and processes against the best available technology and practices known to limit toxicity, volatile emissions, energy and water waste and effluent. We have been working with like minded partners (Patagonia, Nike, Timberland, OIA, REI) to build a critical mass around acceptance of the Bluesign process with our Mills and the industry at large.

Timing:

We have been working on this since 2006 and believe that 2010 will be the breakthrough year.

Results/ Costs/ ROI

The cost of this for us has been mostly our staff time. The costs for a mill to be screened are significant but most of the mills that have gone through the process have seen significant savings on their input costs and re-process requirements.

Waste

The highest efficiencies we are achieving with our markers (imagine cutting cookies out of cookie dough…the pieces left behind) is 80%. This results in 20% of the materials we buy going to waste. We need to both improve our efficiency and find an alternative to the off-cuts to keep them out of the waste stream/ landfill.

Actions:

A 2010 initiative

Packaging

We have over the last 8 years reduced our packaging (on MEC product) significantly relative to most comparable product. It requires creativity to continuing to work towards 100% diversion rates while ensuring the product travels well and facilitates handing in our D.C. One of the complaints we were getting from the D.C. pickers was that bulk packaged apparel was difficult to pick accurately and was time consuming.

Actions:

Last year we trialed a new form of wrapping. Rather than fold and bag apparel we rolled it and tied it with recyclable ribbon. The trial has worked on many fronts, including space saving. We are “rolling” it out to more factories this year.

Results/ Costs/ ROI

There is a learning curve and slight added cost at the factory due to the custom process but we have also seen: Faster picking times. Reduced outer/ shipping packaging. Greater density per carton. 100% diversion.

Collaboration and Innovation for change

Knowing that we are too insignificant to achieve change on our own we rely heavily on collaboration with like minded partners (including competitors). I believe it is our collaboration that has been our real contribution to the area of footprint reduction. Our Bluesign work (see above) that has seen us engage with a breadth of organizations from the University of British Columbia to Patagonia, from the North Face to Nike. Our ethical sourcing initiatives tapped into collaboration with the OIA and the FLA amongst others. We have worked with transportation businesses and construction companies. Our Green Building code brought ARUP engineering and the Canadian Green Building Council into the fold.

Our latest collaboration is with such companies as Nike, Best Buy, Salesforce.com, Yahoo and others to launch an open exchange for green technology patents, G.X. (GreenXchange). G.X. will be launched at the WEF in Davos later this month and will, we are all hoping, result in an explosion in innovation in the area of consumer product.

Strategy

Result

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Manufacturing

Bissell

Challenge

BISSELL Closed Loop Recycling

BISSELL uses a four step process to re-introduce PCR (post consumer resin) from our cleaning products back into newly produced cleaners. We call this four step process – Acquire, Segregate, Reprocess, and Mold – “closed loop recycling”. It’s where we take the plastic resin materials from post consumer returns, reconstitute them and reuse them back into new products.

The process starts with “acquiring” the product back through our reverse logistics system. The returned products come back from a variety of places. They can come back from retailers, service centers, direct from consumers, and others. Units are all accumulated into a single place and prepared for the next process.

The second step in the process is to “segregate” the plastics into the same material types. The units are totally disassembled and all materials are segregated. It is important to keep the like plastic materials together and maintain segregation, so no cross-contamination of materials takes place.

The third step in the process is to “reprocess” the plastic materials back into resin pellets. This step is the most complicated, as there are several embedded process to make the materials achieve the level of quality required. In the initial step, the plastic materials are washed and dried to remove any dirt and debris. Next, the plastic materials are ground-up and tested to reveal the physical properties of the plastic materials. Based on the physical testing results, the plastic ground material with appropriate additives are mixed and extruded into pellets and then bagged and tagged accordingly. The pellets are again tested to a required material specification. Based on favorable results, the bagged PCR materials are released for shipment to our injection molding facilities.

The fourth and final step is to “mold” components for new products using the PCR resin. The components are dimensionally checked and tested for strength to ensure all quality attributes are maintained. The components targeted initially for this process were the accessory components and were black in color.

BISSELL molded its first PCR components made from its own recycled plastic materials in 2008. We were using the PCR material on accessory components for our vacuums and deep cleaners. We also introduced our LITTLE GREEN® machine into the market using PCR materials in non-black components.

Over the course of 2008, BISSELL was able to qualify material through UL to allow us to introduce PCR in agency controlled components. This was a very intense process in getting all the material formulations developed, while meeting the quality requirements, balancing the color match issues, and identifying additional PCR material streams. Now, the LITTLE GREEN® deep cleaner is even greener, as it is being produced with a minimum of 50 percent post consumer recycled plastic – an increase from less than 10 percent only a year ago. We will use over 2.1 million pounds of PCR materials in our BISSELL cleaners and another 1.2 million pounds of PCR material in our chemical packages in 2009. In fact, BISSELL has out grown our own material stream of returned plastics and we are now using other returned plastic material streams to supplement our requirements.

Building on the successful launch of the “green” LITTLE GREEN® for Earth Day 2009, BISSELL continues to target both existing and future projects as opportunities to increase the usage of PCR resin. Expectations are to further increase PCR usage by over 600% in 2010. This requires BISSELL to work with UL to obtain approval for multiple materials, in multiple colors, while maintaining our quality requirements. The target date for these new material approvals is 1st quarter 2010. We have also started rolling out the closed loop process at our other global locations.

Strategy

Result

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