Nike was one of just two brands to provide detailed insight into renewable electricity growth in its supply chain, although the company has not yet published a specific commitment to transition to 100% renewables. The sportswear giant, one of the biggest fashion companies in the world by market capitalization, has also yet to publish an emissions target for its manufacturing which is aligned with a 1.5°C pathway, and as such the company is still far from being on track. It is encouraging to see Nike working with the IFC to provide some financing for renewable energy transition, but it is unclear how much support is available and whether any financing is provided that is not debt-based. Nike has been an effective advocate for increasing access to renewable electricity in parts of its global supply chain.
Total Score
Emissions
About the Clean Energy Analysis
The 2024 Clean Energy Close-Up builds on the foundation of the 2023 Scorecards. It provides an in-depth analysis of the tangible progress of 11 of the most influential global fashion brands. Their performance is measured against the runway to an equitable fossil fuel phase-out by 2030 on criteria related to energy efficiency and renewable energy, drawing in data shared publicly by manufacturers in their supply chains.
Read Report Download Report (PDF)
Score Breakdown
| Target | Brand Commitment | Meets Benchmark |
| Stores and offices GHG Emission reduction target (Scope 1 & 2) | 65% reduction from 2015 levels by 2030 [91] | ✔ |
| Stores and offices Renewable Electricity target (Scope 2) | 100% by 2030 | ✔ |
| Manufacturing emissions target (Scope 3) | 30% reduction from 2015 levels by 2030 | ❌ |
| Manufacturing Renewable Energy target (Scope 3) | No | ❌ |
| Public commitment to phase out thermal coal and transition to electrification/avoid harmful biomass | Coal phase out by 2030 [92] | – |
Nike reports on Scope 1 to 3 GHG emissions for a 3-year history and provides a full Scope 3 breakdown.[93] Supplier lists are publicly available for Tier 1 and Tier 2.[94] The brand discloses information on the use of renewable energy in its own operations and is one of just three brands to report renewable energy and electricity consumption in its supply chain. However, it does not provide data on the type of electricity or energy sourced.
Nike reported a decrease in Scope 3 Category 1 emissions of 12.42% between 2021 and 2022,[95] although overall the company is still off track from aligning with a 1.5 ℃ pathway.
In its own operations Nike has shared that as of the financial year of 2022, it has achieved 93% renewable electricity. The company has pursued a relatively high impact approach to renewable electricity, including contracting a DPAA and VPPAs across the world including Texas and Spain,[96] alongside RECs and EACs.
Nike is one of just a handful of brands to report on the progress of its phase out. It reports that by the end of 2021, all in-scope supplier coal use was eliminated across footwear and apparel finished goods manufacturing. Nike reported early success in transitioning coal-fired steam boilers to electric heating processes across Tier 1, which is an important step forwards.[97] The focus is now on Tier 2.[98] However, the company also references wood pellet biomass to replace coal at one facility in Vietnam, and fails to acknowledge the harmful environmental and health impacts of burning woody biomass.
Step 1: Nike does provide support on energy efficiency and renewable electricity for its suppliers through training/feasibility studies/non-financial resources. These efforts include The Climate & Energy Program, Energy Minimum Program and Supplier Capacity Programs. [99]
Step 2: Nike does report providing financial support for energy efficiency and renewable energy through the IFC GTSF program. This is similar to companies like Levi Strauss & Co. It works with suppliers that have begun implementing low-carbon investment plans and have conducted PaCT cleaner production assessments. This includes offering them access to lower-cost financing to support their efforts, but the extent or availability of financing for suppliers is not clear.
More evidence includes projects in China to expand renewable electricity coverage onsite with new wind turbines adding to the existing rooftop solar power at the Greater China Logistics Center for 2023. With an estimated production of 14,000 MWh per year, the new wind project is expected to bring renewable electricity coverage at the facility to 100%.[100]
Step 3: Climate requirements are included as a condition of the contract for Nike’s suppliers although they are not required specifically to use renewable energy, even if it is strongly encouraged. Through Nike’s Energy Minimum Program, the onboarding process is carried out by local Nike field consultants and facility energy managers to support suppliers. The brand states by implementing this Program, suppliers set the foundational structure to implement energy reduction projects that bring significant value creation through cost reduction and directly reduce carbon emissions. [101]
Nike provides clear evidence and has already completed a coal phase out for Tier 1 and has collaborated with Aii and UNFCCC working group to eliminate coal.
Nike’s renewable energy advocacy comes out as one of the strongest from this group of companies. It works with energy regulators to advocate for policies related to additional onsite solar installation. For example, in Vietnam, the company collaborated with the USAID’s Vietnam Low Emission Energy Program (V-LEEP) to advocate for policy supporting the government’s renewable energy DPPA pilot.
It is important to note Nike CEO John Donahoe is a member of the Business Roundtable which opposed the Build Back Better and Inflation Reduction Act in the US, [102] which runs in opposition to its stated position on climate.
Supply Chain Movement
It is encouraging to note that 16 out of 18 of Nike’s suppliers included in this mapping report have set emissions reduction targets for their operations. 11 have also published plans to increase their use of renewable electricity to some degree. Nike suppliers appear to be reporting a relatively high ratio of renewable electricity sourcing, with the median rate sitting at 12.7%, including six companies that pursued some high impact sourcing. However, only one of the companies reported a specific coal phase out goal (Shenzhou International Group Holdings Ltd), while seven disclosed sourcing biomass, including wood pellets, with plans to increase its use.