Nike Loses the Detox Challenge

Chemical pollution is a huge problem for the world and all of its people. The textile industry is a major contributor to this environmental hazard, and its impact has increased due to the globalized nature of supply chains for apparel companies. This is an issue of environmental justice as the apparel companies overwhelmingly benefit the global north, while the majority of toxic manufacturing is done in the global south. Nike should evaluate their current sustainability communications and create a marketing plan to address the challenge posed to them by Greenpeace.

The stakeholders to the Greenpeace Detox challenge include the world’s atmosphere and oceanic environments, plus all animal and human life on Earth. The most influential stakeholders are Greenpeace itself, and the governments it acts upon as a part of this campaign. It is difficult to determine Greenpeace’s direct impact, but it appears that the campaign may have influenced the Chinese government to enact stricter environmental laws, including a mandatory disclosure provision, a specific recommendation of the campaign. The apparel manufacturers named in the campaign, including Nike and its competitors, are the most obvious stakeholders to this issue. Poor management of this high publicity campaign could imperil their revenues and stock prices and, perhaps most valuable, their brand image. The stakeholders most impacted by the campaign are likely to be the factory workers in the global south (primarily Asia) who are routinely exposed to these chemicals. The families, communities, and immediate environment proximal to these facilities are also highly impacted by toxic effluent. Unfortunately, due to the unique chemical characteristics of surfactants and plasticizers, these chemicals have been found in all the world’s oceans and most of the world’s bird, animal and human populations. Local water tables are affected when consumers wash their garments, releasing these persistent chemicals into their homes and neighborhoods.

The Detox campaign focuses on three families of chemicals which are used to treat textiles and which all share similar negative effects on human and environmental health. These chemicals are known to bio-accumulate in the environment, where they damage the growth and reproduction of fish and other animals. These chemicals also have endocrine-disrupting effects on humans. These chemicals enter the environment near factories due to accidental spills or intentional wastewater discharge, and in the homes of consumers, these chemicals can wash off into the local water supply. The Detox campaign asks apparel manufacturers to eliminate all of these sources of toxic discharge by 2020, by selecting or innovating different materials and by re-designing their products.

Perfluorinated compounds (PFCs) are surfactants, which reduce the surface tension of water and, when applied to textiles, help clothes repel stains and water. While fluorinated repellent technologies are great for waterproofing fabrics, they are also extremely potent greenhouse gases and have been so widely applied that traces of the PFCs have been found floating in all the world’s oceans and inside the cells of 99% of American adult bodies. Exposure to PFCs has been linked to a wide range of ailments. These include not only the obvious effects of endocrine disruption like cancer, reduced fertility, and developmental delays, but even more insidious problems like chronic kidney disease and childhood ADHD. Nonylphenol ethoxylates (NPEs) are surfactants, with the same uses and destructive health effects as PFCs. They are found in around half the American population. NPEs are xenoestrogens, which means they act like estrogen in the bodies of animals and humans, disrupting fertility, causing cancer, and affecting metabolism. Phthalates are chemicals called plasticizers, which are used in the textile industry to soften polyvinyl chloride (PVC) for use in apparel. Like NPCs, phthalates act as a xenoestrogen in humans and animals, and have a possible link to metabolic malfunction and obesity. Due to their chemical structure, phthalates leach easily into the environment and atmosphere, and their presence in homes has been linked to asthma and wheezing in children. Pre-natal exposure has been linked to genital abnormalities in baby boys and a feminizing effect on young boys, as well as intellectual defects and delays that persist for many years after birth.

In response to the challenge set forth by Greenpeace; Nike, Puma, Adidas, and three other international apparel companies formed a collaborative industry working group called the Zero Discharge of Hazardous Chemicals (ZDHC) to create a shared course of action for the garment industry to follow. Now there are around 20 partners in the group. But Greenpeace has criticized the group’s roadmap reports as green-washing and “half-measures,” and a glance over the most recent statement reveals more cheerleading of accomplishments than goal-setting and concrete steps to achieving such ambitious goals. Unfortunately, in the chemistry section of their most recent Sustainability Report, Nike leans heavily on their collaboration with ZDHC and does little to mention their company-specific plan to reduce these chemicals. Nike has no excuse for this, as in the same section they also mention collaboration with the Apparel and Footwear International RSL Management (AFIRM) Working Group, which has developed a 56-page, extremely detailed, Restricted Substances List Toolkit, with directions and steps to avoiding and eliminating problematic materials.

In 2001, Nike developed a Restricted Substances List (RSL), which details the current standards for chemicals in Nike products, divided up by product type. Nike apparel for adults and children may contain phthalates, in addition to footwear and electronics. None was detected in their toys. The company claims to be “committed to the complete phase-out of PVC from the supply chain since 2011,” which would ostensibly solve their phthalate problem. However, the first mention of a PVC phase-out was made in 1998, and in 18 years Nike has not published any roadmap or plan to accomplishing this goal.

Like PVC, Nike claims to be “committed” to a phase-out of NPEs, but without a clear plan of attack for stakeholders to follow and evaluate. Their RSL lists target levels around 1/10th of what is required by legislation. The company claims that they phased out the use of one type of PFC in 2015, but continues to use other forms that have drawn the ire of Greenpeace.

Unlike competitors and ZDHC partners Adidas and Puma, Nike has not produced any statements or materials to outline their path to zero chemical discharge. It is difficult and sometimes impossible to find out information about the company from the statements they do release. The sustainability report and reference “environmentally preferred materials,” but the link provided directs to a dead 404 page. Apparently the Nike web marketing team decided to consolidate previously disparate webpages, as the top three Google search result links for “Nike environmentally preferred materials” all redirect to their generic Sustainable Innovation page.

The information that can be divulged from Nike’s marketing materials raises more problematic questions than it answers. For instance, one of the primary claims of their sustainability report is that the company has “given [their] materials supply chain access to the bluesign® bluefinder database, which lists more than 4,300 pre-screened certified textile chemical formulations.” This seems like an insufficient solution, as it allows Nike to pass responsibility on to their contractors, while the goal of the Detox campaign is for companies to take responsibility for their supply chain. In addition, it seems unrealistic to expect foreign factory management to overcome the language barrier (which creates so many supply chain problems in the first place) to understand and apply these tools.

The company champions their innovation and heavy use of recycled polyester, stating repeatedly on their sustainability report that “NIKE is the world’s top user of recycled polyester in the apparel industry, with 39% of garments containing polyester using recycled content in FY15.” While this sounds like a great thing, in fact, recycling polyester is more energy intensive than use of natural fibers (although less than virgin polyester manufacture), and puts consumers and manufacturers at risk of exposure to other harmful chemicals like antimony.

Going forward, there are a number of marketing tools Nike can use to instill sustainability throughout their organization and eliminate hazardous wastewater discharge. A marketing audit with a thorough and honest stakeholder analysis, plus a customer life cycle analysis, would force Nike to confront the massive environmental scope and human impact of their chemical negligence. This CLC analysis should include contract factory workers as internal customers. Factory workers and managers should be the target of health and environmental education marketing, to inform them of the risks that these chemicals pose to their communities and children. Transparency should become a major priority for Nike. Their RSL includes a section about “high risk colors,” specifying that blue- and white-colored Nike products made for infants and children pose an additional risk of chemical exposure. Information like this should be very clear and transparent to protect and inform customers, rather than buried deep within an obscure industry document. It should be easy for consumers and stakeholders to find out what “environmentally preferred” means.

Nike should meet the Detox challenge with business-to-business (B2B) marketing techniques. The company shares a lot of common technologies and goals with its competitors and industry, such as waterless dying technology. In the chemistry section of their sustainability report, Nike claims that “industry alignment is the key to success,” but they do little to develop key partnerships and collaborate with competitors, suppliers, or relevant NGOs. Nike should also use B2B marketing techniques to improve the quality of their supply chain partnerships. Educating suppliers and contractors about the company’s goals is the first and most important step to achievement. Nike should demonstrate how factories can increase the size, length, and reoccurrence of Nike contracts by adopting sustainable chemistry and practices. The most obvious way that Nike can meet their 2020 goal is by adopting Greenpeace’s recommendation to redesign their products to exclude the problematic materials. It is well within Nike’s capabilities to develop sustainable replacement technology, as they are already innovating all the time with products like Nike Grind. All that is left for the company to do is to promote these techniques, as well as the new ones they will develop to overcome this challenge. Rather than mimicking or reacting to their competitors and external pressures, Nike should embrace their role as futurists and innovators by proactively realizing the solution to hazardous wastewater pollution.

Nike is the perfect company, at the optimal point in their life cycle, to market and commercialize sustainability. Their product design and marketing mix emphasize futurism. Promotions and advertisements feature athletes in 22nd century space scenes, and the company associates their brand with innovation, with creations like the FlyKnit and wearable technology. Nike has considerable operational and financial advantages that could help bring sustainable design fully into the mainstream, from their enormous size, sales, influence, and distribution, to the hefty foundation of research and design they have already devoted to sustainable innovation. Nike is in the ideal position to connect futuristic design and superior athletic performance with sustainability.

Before Nike’s marketing team switches gears to emphasize sustainable innovation, they should carefully examine existing research, both from competitors, and within their own organization. The Achilles heel of Nike’s brand reputation is their massive and complicated supply chain. Nike should take lessons from Patagonia, a sportswear competitor with an unimpeachable reputation for sustainability, despite a staggering number of labor abuse issues in their supply chain. Since Patagonia has already staked their reputation on sustainability, their only viable response to this criticism is transparency, plus proactive improvement and innovation. Patagonia went above and beyond the status quo for supply chain audits, which generally stop at the “first tier” of suppliers at the garment assembly stage, and discovered that labor abuses were occurring in the “second tier” of their suppliers; textile mills. After a thorough systems analysis and working closely with relevant NGOs, Patagonia determined that the solution lay in forming stronger, long-term relationships with a select number of suppliers. The company’s executives publicized every step of this process with candor.

Both Patagonia and Nike claim a major goal is to inspire their industry towards sustainability. Nike has the financial clout and ubiquitous reputation to do it, but Patagonia is generally recognized as a leader, far ahead of Nike. Nike should capitalize on the significant amount of research and development they have already invested into developing sustainable materials. Just publicizing and promoting existing research would propel Nike into the realm of sustainability leaders like Patagonia. For instance, their sustainability report boasts that Nike Grind materials (recycled shoes) are used in 71% of footwear and apparel. With an appropriate constellation of supportive social marketing techniques, this could be a major point of differentiation from athliesure competitors like Adidas. One technique that Patagonia has successfully used is radical transparency and de-branding to reduce consumption. One famous magazine advertisement details the various environmental impacts of a particular Patagonia jacket, and encourages consumers to think long and hard before making their purchases. This level of disclosure in advertising makes Nike’s sustainability reports look positively opaque.

Nike should take the lead in supply chain management reform for the garment industry. Labor abuses, chemical pollution, and other reputational liabilities arise from a disconnected and disorganized supply chain, and they are the primary obstacle to Nike sustainability marketing. To demonstrate a commitment to radical transparency like Patagonia, Nike should create and share a strategic sustainability plan to simplify and perhaps flatten their complicated, multi-tier supply chain. Nike should use B2B marketing techniques to attract high-quality suppliers willing to submit to stringent sustainability audits and standards, in exchange for repeat long-term contracts. Nike should devote considerable resources to improving the communities that surround and support their factories. Many of Nike’s competitors donate significantly to microfinance and health clinics in factory towns, and Adidas has innovated an anonymous texting system for whistleblowers in their supply chain. Yvon Chouinard, founder of Patagonia, says one of the company goals is that every Patagonia employee should also be a Patagonia customer. Nike should adopt this attitude as well, and work to elevate, empower, and provide for the people and communities that directly contribute to their success. Nike should work closely with NGOs (following the example of Patagonia and Verité) to interface with foreign state departments and governments. If Nike can mitigate the harm caused by their supply chain model, they will be ideally positioned to introduce sustainable marketing on a wide scale.

Once Nike has adopted the best practices of their industry to innovate solutions for their supply chain liabilities, they will be ready to fully commit to an image of sustainability. Sportswear is an extremely popular and profitable segment of the fashion industry, and its continued growth appears to propel the whole market. To accommodate this growing base of customers effectively and profitably, Nike must consider all aspects of the customer life cycle and journey when devising their marketing plan to commercialize sustainability.

To acquire new first time customers, Nike should continue to leverage and promote key endorsements. ESPN’s Sole Man documentary describes the power of “Nike hegemony” over the athletics market, and their role as “kingmakers” with regards to their endorsements. To advance sustainability and attract new and latent interest, Nike should focus on making kings and queens out of green network influencers on social media and traditional ad space. The company should endorse professional athletes who clearly demonstrate the link between human performance and sustainable performance. Nike can also select “everyman” athletes to elevate ordinary Nike customers and make the brand more interactional. Nike should donate considerably and publically to charitable sporting events like fundraising runs and the Special Olympics. A perfect candidate for high-profile endorsement would be someone running across America (or anywhere) to raise awareness about a sustainability issue.

One way that Patagonia has excelled at maintaining high customer satisfaction is through education and value co-creation with their customers through their catalog and website. Nike, with its massive social media following and far-flung sprawl of websites, should follow suit. Nike should direct its web marketing team to turn its online presence into an inviting and interactional marketplace where customers will be attracted naturally and organically. The emphasis of social media content should be on education, rather than on pushing sales. Nike should use its online presence and its retail environment to inform and remind customers about the dire consequences of unsustainability, and the ways that buying from Nike can help to remand and solve these problems. Another way to increase customer satisfaction and please second-timers is to ramp up shoe take-back programs. Closed loop processing is a common theme throughout Nike’s sustainability report, and shoe recycling seems like a obvious concept that aligns with this goal. The sustainability report boasts that “Since 1990, NIKE’s Reuse-A-Shoe program has collected and recycled more than 30 million pairs of used shoes.” Nike should not only promote and publicize this program, but increase its scope and reach with the goal of eventually retrieving every shoe they sell.

Retention of repeat buyers is achieved by offering service and products of consistent quality. Nike has high brand loyalty, but it will require innovative sustainability marketing to stay ahead of competitors like Adidas. One idea is developing a human-centric advertising campaign that shows unconventional athletes, like an impoverished young Brazilian soccer player wearing generic dirty clothes and no Nike branded sportswear at all. This de-branding attempt would humanize the Nike brand and to evoke the connection that consumers feel for humanity and the Earth. Customization is likely to become a major trend in the future, and Nike is well-positioned to take advantage of this with technology like the FlyKnit shoe. Machines should be programmed to create fully customized footwear, optimized for the exact orthopedic shape and needs of the individual customer. Many Nike customers use their products in a gym environment. As virtual reality and wearable technology improves, Nike should use these tools to not only improve the workout experience of their customers, but drive home sustainability values. One example could be a virtual reality program that allows treadmill runners to explore an endangered wilderness area like the Amazon rainforest, exposing them to a realistic world they may never otherwise encounter. The first celebration of Earth Day began 16 months after NASA first landed on the moon and captured iconic photos like Earthrise, proof that exposure and perspective can lead to action.

Innovative sustainability solutions will naturally lead to fans recommending the brand to people who might otherwise not be interested in sportswear, loyal fans of competitors, and holdouts who object to Nike for sustainability reasons. Nike has the power and resources to achieve the economies of scale necessary for alternative textiles like hemp and tencel to be financially viable and gain enough traction to enter the market at competitive prices. Nike has already developed hyper-sustainable shoes made of unique materials such as kangaroo leather and plastic made from castor beans. Promoting renewable and green materials as the future of apparel will encourage fans to spread the good word and attract the attention of sustainability-oriented. One last idea to encourage recommendations is to stage a large sustainability-themed competition on social media. For instance, participants should be encouraged to design a shoe or garment with sustainable materials, using programs like bluesign, or the Nike MAKING app. Strategic partnerships, hashtags, follow chains and loop giveaways can be used to maximize follower impact and program exposure.

As technology improves and supply chains become more efficient through integrated corporate responsibility and automation, Nike stands to gain more and more advantage for popularizing and commercializing green concepts using social marketing techniques.

What do you think?