What Nike’s Commitment to Sustainability Teaches Us About Innovation

There is a perception that if you make a product sustainable, it somehow of less quality or worth. But try telling that to Nike who identified sustainability as a source of innovation and made it a profitable revenue stream.

By David Ryan Polgar, Contributor

With over $20 billion in annual global revenue, Nike is the world’s largest manufacturer of athletic footwear. And, for the last several years, it has also been at the forefront of sustainable fashion.

In 2015, Morgan Stanley ranked Nike “the most sustainable apparel and footwear company in North America for environmental and social performance.” Last year, along with apparel companies H&M and Levi & Strauss, the World Wildlife Foundation (WWF) recognized Nike as a leader in the use of sustainable cotton.

Yet for Nike, this acknowledgement has been years in the making.

In 2004, the company began working with designers, scientists, coders, and students to better understand the materials that go into today’s fashion products. The items found in Nike’s material library were each given a score based on long-term sustainability and environmental impact. Eight years later, Nike launched the Nike Materials Sustainability Index (NMSI)—a database with information for Nike designers on products and their impact on the environment.

By 2013, there were 75,000 items listed in index. The company then combined this data set with a user-friendly interface to launch the MAKING app, a tool that helps designers across industries make smarter environmental decisions about which materials to incorporate into their designs. Today, the app focuses on four key impact areas: Chemistry, Energy/Greenhouse Gas, Water/Land, and Physical Waste.

In 2018, while the footwear giant’s commitment to sustainable practices benefits the environment and aids the company’s conflicted reputation, it is also reveals another advantage: Its capacity to spark innovation.

A New Model for Innovation

Nike is not the first to see (self-imposed) restrictions as an opportunity to encourage employees to think outside of the box. In the medical field, for example, restrictions to budget or electricity have led to inventions like the 20-cent paper centrifuge that isolates diseases such as HIV or malaria in remote areas for little cost.

Although not combating deadly diseases, Nike has used its commitment to develop more sustainable projects to inspire new ways of thinking. By rejecting the traditional sustainability tradeoff model, which assumes monetary tradeoffs with investment in corporate sustainability initiatives, Nike has demonstrated its commitment to environmental protection while driving new forms of innovation.

According to Hannah Jones, Nike’s Chief Sustainability Officer and VP of its Innovation Accelerator, Nike’s goal for years has been to rethink sustainability and innovation entirely.

“Sustainability was always framed as something that was counter to business success, that if you made a product that was sustainable, somehow it would be less good or more expensive,” Jones said in a Fast Company interview. “The refram[ing] that happened is that we stopped seeing sustainability and labor rights as a risk and burden and instead as a source of innovation. If you flip it to be about an innovation opportunity, people step into that space with less fear.”

And that, she explained, creates a host of new possibilities.

“We stopped seeing sustainability and labor rights as a risk and burden and instead as a source of innovation. If you flip it to be about an innovation opportunity, people step into that space with less fear.”

– Hannah Jones, Nike’s Chief Sustainability Officer and VP of Innovation Accelerator

Flying High

For Nike, that opportunity arrived in the form of a new athletic shoe: the Flyknit.

After ten years of sustainability research, Nike footwear designers figured out how to create a shoe that gave athletes the support they needed without adding anything unessential to the design. By setting out to make a piece of athletic footwear that created zero waste and maintained a high-level of performance for runners, the company developed a new technology that wove the upper portion of the Flyknit from a single thread.

The key, according to Jones, was involving designers in the sustainability process—celebrating their creative ideas and willingness to take risks. For the Flyknit shoe, the constraints Nike placed on the designers were: to develop the lightest shoe possible to win a marathon; to make it beautiful; and to rethink the concept of waste.

“That’s an unlikely mash-up of constraints,” Jones wrote in a Nike new post in 2016, “but if the designers hadn’t had all three in mind, they wouldn’t have arrived at the Flyknit Racer, which turned the industry upside down.”

Released in 2012, the Flyknit was a major factor in the company being named Fast Company’s Most Innovative Company in 2013.

A key selling point in Nike advertisements, the Flyknit is also proof that corporations do not have to make the tradeoff between sustainability and profit. Today, that piece of athletic footwear is not only lighter and more breathable—it has generated upward to $1 billion in revenue each year.