FY18 NIKE, Inc.

Impact Report
Introduction Our Approach Unleash Human Potential Transform Manufacturing Minimize Environmental Footprint Appendix

FY18 Impact Report

2 About This Report
3 Report Content

Introduction
5 Letter From Our CEO
6 Purpose Committee

Our Approach
8 Issue Prioritization
9 Priority Issue Definitions
10 Targets Summary

Unleash Human Potential

13 FY18 Highlights
14 Employees
19 Community Impact
23 Unleash Human Potential: Priority Issues

Transform Manufacturing
27 FY18 Highlights
28 Sustainable Sourcing
31 Engaged Workforce
32 Partnerships to Accelerate Industry Change
33 Transform Manufacturing: Priority Issues

Minimize Environmental Footprint

35 FY18 Highlights
36 Product
38 Materials
41 Energy and Carbon
47 Waste
51 Water
53 Chemistry

Appendix
58 PwC Assurance Report
59 NIKE, Inc. Management Assertion
64 Global Reporting Initiative (GRI) Index

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About This Report

NIKE, Inc. (“NIKE”) is a brand of Innovation, The targets and measures in this NIKE Impact For the first time, we have obtained external
Growth, and Purpose and our mission is Report represent the full suite of our public assurance on select reported metrics (Scope 1
to bring inspiration and innovation to every corporate responsibility commitments and and 2 energy consumption and emissions, and
athlete1 in the world. And, we do that by are an aggregated view of long-term goals Scope 3 commercial air travel emissions). More
building creative and diverse global teams, and commitments to meet stakeholder3 information can be found in the Appendix.
making a positive impact in the communities expectations and align with NIKE’s business
where we live and work and by making priorities. Building on NIKE’s reporting tradition For news, updates and more detail about NIKE,
products responsibly and more sustainably. since 2001, we expect to report progress please visit purpose.nike.com.
We are driven by a commitment to against our social and sustainability targets and
transparency, accountability, and purposeful material issues annually. This report has been prepared in accordance
impact, reflected by our approach to sharing with the GRI STANDARDS: CORE option.
our priority issues and reporting our progress In this report, we cover NIKE’s fiscal year 2018
toward the NIKE 2020 targets.2 (June 1, 2017 through May 31, 2018), with the
notable exception of calendar year 2018 data
for the Employee and Occupational Health and
Safety sections. We will refer to the fiscal year
as FY18 and the calendar year as CY18 for the
rest of the report. Unless otherwise stated, the
baseline for the majority of our targets is fiscal
year 2015.

Note: The information in this report and NIKE, Inc.’s corporate responsibility/sustainability reporting and website, inclusive of charts, graphs and discussion, and all other information presented, may contain forward-looking statements, estimates or
projections based on expectations as of the original date of those materials. Those statements, estimates and projections are subject to certain risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties
are detailed in our reports filed with the U.S. Securities and Exchange Commission, including Forms 8-K, 10-K and 10-Q. Presented information may also discuss non-public financial and statistical information and non-GAAP financial measures. All
information was current only as of the date originally presented. We do not update or delete outdated information contained in website materials, and we disclaim any obligation to do so. All content is the property of NIKE, Inc.

1 “If you have a body, you are an athlete.” – Bill Bowerman

2 Definitions of Priority issues.
3 Stakeholders are defined as customers, consumers, shareholders, employees, communities, NGOs, academics, or any group with a vested interest in a company’s strategies and development plans.

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Report Content
The FY18 NIKE Impact Report focuses on our 2020
RM MANUFACTUR Our Moonshot Ambition
Targets and Priority Issues most relevant across NS FO ING
our value chain and to our stakeholders. TRA Carbon How can we double
our business while
halving our impact?
M
FY18 Priority Issues Child Labor IN
IM
L IZ Water
Existing Priority Issue IA
T

E
N

EN
Issues with Increased
TE

VI
Relevance in FY184
PO

RO
N

Chemistry

NM
Chemistry
MA

Climate Change Risks

EN
HU

Active Kids

TAL
Energy
A SH

Diversity & Equal Opportunity

GHG Emissions

FOO
Occupational Health & Safety
UNLE

Material Waste
Total Compensation Waste

TPRIN
Non-Renewable
Workforce Development
Priority Issues5 Resource Depletion

T
Water Use

2020 Targets and Measures

UNLEASH HUMAN POTENTIAL MINIMIZE ENVIRONMENTAL FOOTPRINT
Employees Product
Target  Attract and develop an increasingly diverse, engaged, and Target  Deliver products for maximim performance with minimum impact,
healthy workforce with a 10% reduction in the average environmental footprint
Measure •  Provide visibility to our diversity and inclusion progress Measure •  Greater than 80% of all NIKE, Inc. product will be scored on
•  Build stronger bodies and minds through Health and Wellness efforts sustainability performance
•  Provide comprehensive, competitive, and equitable pay and benefits
Materials
Community Impact
Target Increase use of sustainable materials in footwear and apparel
Target Invest a minimum of 1.5% of pre-tax income to drive positive impacts Measure •  Source 100% of our cotton more sustainably across NIKE, Inc.
in our communities
Measure •  Get kids (ages 7-12) moving through play and sport Carbon and Energy
•  Inspire a majority of NIKE employees to engage wth their Target  Reach 100% renewable energy in owned or operated facilities by the
communities and support their giving of expertise, time, and money end of FY25 and encourage broader adoption as part of our effort to
•  Drive sustained community impact in primary markets and control absolute emissions
sourcing backyards Measure •  Decrease energy use and CO2e emissions 25% unit in key operations
•  Decrease energy use and CO2e emissions 35% per kg in textile
dyeing and finishing
TRANSFORM MANUFACTURING Waste
Sustainable Sourcing Target Eliminate footwear manufacturing waste to landfill or incineration, while
Target Source 100% from factories that meet our definition of sustainable continuing to reduce overall waste
Measure •  Eliminate excessive overtime (EOT) Measure 
• Reduce waste index by 10% in footwear manufacturing, DCs and HQs
• Increase landfill diversion at DC and HQs
Engaged Workforce
Water
Target Ensure contract factory workers share in productivity gains
Target  Innovate and adopt new approaches to reduce water use in our
Partnerships to Accelerate Industry Change supply chain, with a 20% reduction in freshwater use in textile dyeing
Target  Establish partnerships that support the needs of workers both inside and finishing (l/kg per unit of production)
and outside of the factories Measure •  Build resilience through supplier water risk mitigation plans with
Measure •  Scale services to support management and workers for improved material processors
engagement and wellbeing Chemistry
Target Enable Zero Discharge of Hazardous Chemicals (ZDHC)
Measure • 100% compliance with NIKE restricted substance list (RSL)
• 100% compliance with ZDHC manufacturing restricted substance
list (MRSL)
• Achieve better chemical input management through scaling more
sustainable chemistries
4 These issues, which have always been a key focus for NIKE, have seen increased relevance to stakeholders in the past year.
• Lead industry change through collective action
5 We removed the following priority issues in FY18: Employment, Excessive Overtime, and Freedom of Association. • 100% of focus suppliers meeting NIKE’s wastewater quality
See Issue Prioritization for more detail.
requirements for textile dyeing and finishing processes

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Letter From Our CEO

Sports can move the For NIKE, it also means using our voice to
power greater change. As the urgency of
That’s why we’re more focused than ever on
growing and developing our people. We’re
world forward as climate change calls for significant industry stepping up support for career development
shifts, we’re joining coalitions such as the and increasing our investment in key resources,
nothing else can. Global Fashion Agenda and the United Nations such as our employee networks. And this year,
Framework Convention on Climate Change we achieved a global pay equity ratio for men to
Call it crazy. Dismiss it as a dream. But this (UNFCCC) Fashion Industry Charter for Climate women, and white to underrepresented groups
belief has long been the heart and soul of Action that seek to accelerate progress across in the U.S.
NIKE, and this year, our teams rallied to borders and sectors.
bring it to life for an even broader community. Yet we know there is still much more work to
Our “Dream Crazy” campaign became a As an innovation-driven company, we will do. Over the past year, we increased the VP-
catalyst for conversation around the world, always make room for experimentation. But level representation of women by 4% to 36%
inspiring athletes to speak up about how their for NIKE, sustainability has never been a test globally and the VP-level representation of U.S.
passion for sport drives them to challenge case. Over the decades, it’s shaped some of underrepresented groups by 3% to 19%. We
the status quo. our most popular products and fastest-growing know that we can do better, and we know that
platforms. Now, I believe we’re entering a we can be better as a more diverse company.
The sweeping message of empowerment new phase for NIKE innovation – one where Incremental change is not enough.
connected deeply with consumers. It also sustainability at scale is becoming a reality.
inspired many of us who work at NIKE to So, we’re taking intentional action to increase
continue to think bigger about the impact Take Nike Air as an example. All Nike Air-Sole representation, especially across our leadership.
we can create. innovations since 2008 are composed of at That includes continuing to expand our pipeline
least 50% recycled material, diverting more of diverse candidates at leadership levels. It
In the face of today’s challenges – from climate than 50 million pounds of waste from landfills also includes holistic approaches across our
change to inequality to how we unleash the each year. Its success speaks for itself: if Nike organization, from mitigating potential bias in
potential of the next generation – I believe Air was a standalone athletic company, based the interviewing process to increasing training
we need our boldest dreams yet. We need a on revenue, it would be the third-largest in the programs that will help strengthen a culture
broader vision for leadership and a greater world. Nike Flyknit, which transforms recycled of belonging.
openness for risk. We need to question and polyester into our highest-performing products,
transform existing models. And above all, is now a multi-billion dollar business. And we Moving forward, with each Impact Report,
we need to back our aspirations with continue to scale Nike Flyleather, a sustainable we’ll use the opportunity to build on where
purposeful action. new super material made from at least 50% we’re making progress and face head-on the
leather fiber, across our most beloved products. areas where we can improve. Yet we also
Over the decades, as NIKE’s role in the understand that living up to our potential
world has grown, we’ve seen what’s possible Even as our business grows in scale and means earning it every day.
when our business invests in what’s best for complexity, we’re increasing transparency
future generations. That starts with building throughout our supply chain. A decade and That’s really what NIKE’s impact is all about. It’s
communities of young people who have a half ago, NIKE was the first company in our about leading with actions, not words. It’s about
opportunities to access the life-changing impact industry to publicly disclose its supply base for showing up for our teammates and for our
of sport and play. I’m incredibly proud that in all our finished goods manufacturing facilities. communities. It’s about accepting nothing less
2018, our Made to Play community programs Last year, we deepened our disclosures to than our very best – then asking ourselves how
reached 16.5 million kids worldwide. This past include our core materials supply base. By we can do even better.
year, we also reached nearly 100,000 coaches driving greater accountability for ourselves and
through NIKE-supported programming, with our suppliers, we open up more opportunities We know that we have a long way to go. Yet,
a specific focus on increasing the number of to advance worker engagement and wellbeing just as our athletes have shown us, I believe
female coaches to help inspire young girls, who across our value chain. some of NIKE’s craziest dreams are just
have so much potential to move the world. beginning to take flight.
As we deepen our positive impact in the world,
At the most fundamental level, protecting the we’re also thinking critically about the change
future of sport also means providing safe places we want to drive inside NIKE. Our employees
to play. For sport to thrive, we need clean air come to NIKE to be part of something greater,
and open spaces. That’s why we set a bold to experience the joy and pride of working
target to source 100% renewable energy across on a team that can transcend what we could
our global operations by 2025, which saw major ever accomplish on our own. Time and again, Mark Parker
momentum this year as we committed to 100% I’ve seen that when our teams commit to Chairman,
renewable energy in North America and Europe. complex change, we don’t just exceed our own President and CEO
benchmarks, we take the industry someplace
Protecting our planet’s future goes beyond new. I believe it’s our culture that makes it all
lessening our own environmental footprint. possible – and we don’t take that for granted.

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Purpose Committee
The Purpose Committee provides direction Purpose Governance at NIKE
and oversight for the end-to-end integration
of NIKE’s work in diversity and inclusion,
community, labor, and environmental impact. CORPORATE RESPONSIBILITY, SUSTAINABILITY AND
Board
They challenge our business to better GOVERNANCE COMMITTEE (BOARD OF DIRECTORS)
Accountability
understand our social and sustainability
impacts, set ambitious targets for improvement,
and overcome obstacles in achieving progress. Executive Leadership and
The Purpose Committee, which includes Purpose Committee
Corporate Accountability
the scope of the former Performance and
Disclosure Committee established in 2012,
meets regularly to review these targets, Cross-Functional Leadership
Purpose Leadership Team
performance, and disclosures. and End-to-End Integration

This Committee is a key contributor in shaping

NIKE’s evolving approach to transparency. Cross-Functional
Purpose Subcommittee
We believe that companies like NIKE play an Working Group
important role in helping to address some
of the complex challenges facing our global
Supply Chain
community today. Functional Leadership Diversity and
Community Labor, Health Environment
and Execution Inclusion
and Safety
Learn more:
Governance

Purpose Committee
This Committee includes:
President, NIKE Direct
EVP, Chief Financial Officer Heidi O’Neill
Andy Campion
EVP, Chief Communications Officer
Chief Marketing Officer Nigel Powell
Dirk-Jan van Hameren
President, Categories and Product
President, Consumer and Marketplace Michael Spillane
Elliott Hill
Chief Operating Officer
EVP, CAO and General Counsel Eric Sprunk
Hilary Krane
President, Jordan Brand
EVP, Global Human Resources Craig Williams
Monique Matheson

VP/GM, Global Categories

Amy Montagne

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Issue Prioritization
For over 20 years, NIKE We continuously learn, grow, and refresh
our perspective by considering the global
FY18 Changes
has been striving to create perspective of our internal and external While there was great alignment between
this year’s issue prioritization survey and last
stakeholders6 in our analysis of priority
a better future for our sustainability issues. Similar to last year, year’s survey results, “Diversity and Equal
Opportunity” and “Climate Change Risks”
people and planet by better in FY18 we surveyed a wide range of
stakeholders, including employees, NGOs, were identified as key issues with a strong
understanding the most academics, suppliers, and corporate peers, increase in relevance for both internal and
external stakeholders.
to determine the most relevant issues at each
pressing issues confronting stage of our value chain and the impacts most
directly linked to those issues. At NIKE, we know that our culture is at
our global community, and its best when all employees feel included,
respected, and heard. The increased relevance
trying to innovate solutions Learn more:
FY16/17 Issue Prioritization Process of “Diversity and Equal Opportunity” is
to address them. Stakeholder Engagement consistent with our continued and enhanced
internal focus on building an inclusive and
NIKE’s Value Chain
accountable culture across our company.

FY18 Priority Issues Learn more:

This chart details the high and low priority issues for each stage in the value chain. Employees

We know that climate change is one of the

UNLEASH HUMAN POTENTIAL defining issues of our time and the FY18 survey
results support this. “Climate Change Risks,”
Active Kids
which is related, but different, from Energy and
Diversity and Equal Opportunity GHG Emissions, focuses on the risk climate
Occupational Health and Safety change poses to our business, our industry,
and our planet. Climate issues, like pollution
Total Compensation and extreme weather conditions, affect how
Workforce Development athletes perform. And as a global business,
climate change introduces risk across our
TRANSFORM MANUFACTURING value chain. We’re tackling climate change
Child Labor head-on by investing in lower-carbon materials
and renewable energy and building resilience
MINIMIZE ENVIRONMENTAL FOOTPRINT to climate uncertainty by reducing costs and
Chemistry innovating new operating models.

Climate Change Risks Learn more:

Energy Energy and Carbon

GHG Emissions For the past few years, “Employment,”

Non-Renewable Resource Depletion “Excessive Overtime,” and “Freedom of
Association” have received low relevance
Material Waste scores from our stakeholders, so they are not
Water Use listed as top priority issues in FY18. However,
NIKE recognizes that excellent management in
these areas is important, and we continue to
Key High
il
es rials g g ics eta er
s ife provide relevant information on these topics in
Low rvic te ishin turin ist R m fL
c g u o our external disclosures.
Se M
a Fin ufa Lo ns d
Not applicable at
e w nd an Co En
o r R a a
rp rin
g sM Learn more:
Co tu ood Employment
ac G
uf d Excessive Overtime
an ishe
M Freedom of Association
ial
s Fin
ter
a
M

6 In FY18, we considered the input of over 100 internal and external stakeholders in the analysis of our prioritization issues.

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Priority Issue Definitions

UNLEASH HUMAN POTENTIAL
Priority Issue Definition Location

Active Kids Helping kids reach their full potential through play and sport and creating Community
more equal playing fields for all Impact

Diversity and Equal Opportunity Representation of female and minority employees in workforce and Employees
management positions equal to the consumers and communities we
serve, and the gap in average remuneration

Occupational Health and Safety Worker health and safety practices throughout the value chain Occupational
Health and Safety

Total Compensation Economic value generated for employees through wages and benefits Employees

Workforce Development Training and development for workers to build capability and Employees
career opportunities

TRANSFORM MANUFACTURING
Priority Issue Definition Location

Child Labor Operations and suppliers identified as having significant risk for incidents Child Labor
of child labor

MINIMIZE ENVIRONMENTAL FOOTPRINT

Priority Issue Definition Location

Chemistry Chemicals used in making materials and products and substances Chemistry
released to the environment (air and water) that are toxic to humans
and ecosystems

Climate Change Risks Financial risks to NIKE due to operations exposed to changing climate Energy and
impacts throughout the value chain Carbon

Energy Energy used for electricity, use of fossil fuels, and other energy sources Energy and
Carbon

GHG Emissions Greenhouse gas emissions from energy, transportation, and NIKE’s other Energy and
business activities Carbon

Non-Renewable Resource Depletion Non-renewable resources depleted through materials and fuels used Materials

Material Waste Waste generated throughout NIKE’s value chain and activities to reduce, Waste
reuse, or recycle

Water Use Water used throughout our value chain and monitoring our impacts in Waste
water-scarce regions

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Targets Summary Key

Favorable
Increase Decrease

Unfavorable

UNLEASH HUMAN POTENTIAL TABLE UNDER DEVELOPMENT

Metric Unit of FY15 FY16 FY17 FY18 FY18 Change FY20 Target
Measurement Baseline vs. Baseline

Community Impact
Annual Investments as % of Pre-Tax Income % 1.9% 1.8% 1.9% 1.8% N/A7 1.5%

TRANSFORM MANUFACTURING
Metric Unit of FY15 FY16 FY17 FY18 FY18 Change FY20 Target
Measurement Baseline vs. Baseline

Manufacturing8
Factories Rated Bronze or Better 44 p.p.9
% 86% 87% 91% 93% (vs. FY11 BL)
100%

Factories with Excessive Overtime % 3.3% 3.2% 3.9% 2.4% 0.9 p.p 0%

MINIMIZE ENVIRONMENTAL FOOTPRINT

Metric Unit of FY15 FY16 FY17 FY18 FY18 Change FY20 Target
Measurement Baseline vs. Baseline

Product
kg CO2e/
Average Product Carbon Footprint10 7.33 7.19 7.15 7.45 2%11 10%
unit
Product Scored on Sustainability Performance % 27% 68% 71% 73% 46 p.p. 80%
Materials
Sustainable Materials12 – Apparel (AP) % 19% 21% 33% 34% 15 p.p.
Sustainable Materials12 – Footwear (FW) % 31% 33% 32% 31% 0 p.p.
Cotton Sourced More Sustainably13 % 24% 35% 53% 58% 34 p.p. 100%
Carbon and Energy
Renewable Energy – Owned or Operated14 % 14% 20% 22% 19%15 5 p.p. 100%16
Energy Consumption Per Unit – Key Operations17 kWhe/unit 4.74 4.29 4.74 4.39 7% 25%
kg CO2e/
Carbon Emissions Per Unit – Key Operations17 1.75 1.62 1.75 1.71 2% 25%
unit
Energy Consumption Per Kg – Textile Dyeing and Finishing18 kWhe/kg 15.86 15.46 14.95 14.40 9% 35%
Carbon Emissions Per Kg – Textile Dyeing and Finishing18 kg CO2e/ kg 4.78 4.68 4.55 4.33 9% 35%
Waste
N/A
Waste to Landfill19 – Footwear Manufacturing % (FY16 BL)
6.6% 3.9% 1.8% 4.8 p.p. 0%

Waste Index – Footwear Manufacturing, DCs, and HQs

20
N/A 100 21
98 100 103 3 10%
Landfill Diversion – DCs and HQs22 % 88% 87% 88% 87% 1 p.p.
Water
N/A
Freshwater Use Per Kg – Textile Dyeing and Finishing18 L/kg (FY16 BL)
126.5 117.2 109.3 14% 20%

Chemistry
Tested Material in Compliance with NIKE Restricted Substance
% 95% 99% 98% 99% N/A23 100%
List (RSL)
Compliance with the ZDHC Manufacturing Restricted
% N/A N/A N/A 68%24 N/A 100%
Substances List (MRSL)
Focus Suppliers Meeting NIKE’s Wastewater Quality N/A
% 58% 73% 69% 11 p.p. 100%
Requirements – Textile Dyeing and Finishing18, 25 (FY16 BL)

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Targets Summary
Footnotes
7 This is an annual target. Baseline and change vs. baseline are not relevant to this target.
8 Scope includes all finished goods manufacturing.
9 p.p. = percentage points.
10 This target includes NIKE-designed/developed Nike Branded, Brand Jordan, and NIKE Golf Global apparel styles, and Nike Branded, Brand Jordan,
and NIKE Golf Global footwear styles. We are using CO2e emissions as a proxy for other environmental impacts (e.g. energy, other air emissions).
11 Average product carbon footprint has increased compared to the FY15 baseline due to an increase in both material per unit (apparel getting heavier) and
manufacturing emissions intensity (driven by grid electricity in Vietnam and style/model mix). While NIKE has two other FY20 carbon targets that are both
trending in the right direction, these other carbon targets represent tier 1 (finished goods manufacturing) combined with other key operations, and tier 2
(materials finishing). The product target represents tiers 1 through 4 (which includes materials manufacturing and raw materials production).
12 We define more sustainable materials as those that reduce the environmental impact of a product through better chemistry, lower resource intensity,
less waste, and/or recyclability.
13 Certified organic, Better Cotton (cotton grown according to the Better Cotton Standard System) or recycled.
14 The target scope includes electricity only, where we make energy purchase decisions on strategic assets. Equivalent to absolute reductions in
Scope 1 and 2 CO2e emissions of at least 50% by FY25.
15 Slight decline in FY18 is due to the delay between WHQ and Air Manufacturing Innovation (Air MI) facility expansions and building construction going live
and being incorporated into the Oregon Power Purchase Agreement (delay is a regulatory requirement).
16 Target year to achieve 100% is FY25, not FY20.
17 Key operations = finished goods manufacturing, inbound and outbound logistics, DCs, HQs, and NIKE-owned retail. Previous years have been restated
due to inclusion of estimated retail natural gas consumption outside of the U.S. and Canada.
18 Measure includes focus suppliers only. Focus suppliers represent key suppliers involved in the dyeing and/or finishing of materials that directly
support finished product assembly.
19 Target covers waste to both landfill and incineration. Incineration does not include waste to energy recovery unless otherwise noted.
20 The waste index is a weighted average of our footwear manufacturing waste per unit, DCs waste per unit and HQs waste per occupant.
21 Baseline is FY15 except for Tier 1 FW Manufacturing and Converse HQ, which are FY16 and are included in Inc.-wide baseline for comparability
across years.
22 Baseline is FY15 except for Converse HQ, which is FY16 and included in Inc.-wide baseline for comparability across years.
23 As we add new chemicals and tighten the limits, we may see a small number of failures as the supply chain adapts to the more stringent requirements.
Due to these changes, we do not recognize a baseline or change vs. the baseline.
24 FY18 was NIKE’s first year tracking this metric.
25 Measurement of supplier adherence to NIKE’s wastewater quality standards between FY16 and 18 in this table is based on a prior standard.

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FY18 Highlights

10% 10,000
Percentage of employees Number of employees
who received an who completed Manager
adjusted base salary Expectations Training
as part of ongoing
competitive pay
management

4% 3%
Increase of VP-level Increase of VP-level
representation of women, representation of U.S.
bringing the total to 36% underrepresented groups,
bringing the total to 19%

$7.5m $79.4m
Amount that NIKE NIKE’s investments in
employees, supported communities around the world
by the NIKE Foundation’s in FY18, totaling over $396m
matching gift program, since FY14
contributed to charitable
causes globally

1:1 16.5m
Pay ratio for Number of kids
men to women that NIKE helped to
(globally) and white get moving through
to underrepresented its Made to Play
groups (U.S.) commitment

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Employees
Target Our global HR Strategy is focused on We want everyone who works at NIKE to
stewarding a people-first culture and we’re experience a level playing field and have the
Attract and develop an empowering our teams and strengthening opportunity to reach their full potential. In
order to advance this vision, we have taken
our culture by:
increasingly diverse, several important steps this past year including:
elevating diversity and inclusion to sit at the
engaged, and healthy
1 2
heart of our HR strategy to drive systemic
workforce progress; enhancing our HR processes; and
elevating our Employee Relations function. We
have also invested in more career development
Our employees are at the heart of our
Creating aligned Investing in and training for employees, managers, and
success as a business. We know that NIKE
and effective great leaders leaders across NIKE.
is at its best when every member of the
organizations and managers
team feels respected. That’s why we’re
To ensure we remain competitive to the
committed to fostering a culture of inclusion
marketplace, we have adjusted base salary for
and an environment where all employees are

3 4
about 10% of our employees across all bands,
empowered to move the world forward through
geographies, functions, and brands. And, at the
the power of sport.
beginning of FY19, we moved to one annual
bonus plan, our Performance Sharing Plan, for
This past year was a challenging and inspiring
Empowering Ensuring eligible employees to reinforce our culture and
year, marked by growth and learnings, and an
diverse and opportunity for reward behaviors that support collaboration and
increased focus on our team and culture. NIKE
innovative teams everyone to learn teamwork. We also continue to strive to reflect
is at its best when every member of the team
the diversity of our global consumer base.
feels included and heard – when everyone
can show up fully as themselves and do their

5
best work every day. And we have made new Total Employees26
commitments to strengthen our culture of
CY1627 CY17 CY18
inclusion, empowerment, and respect, including
% Change - 2% -2%
increasing diversity across our organization –
Employee Count 65,216 66,739 65,332
with a focus on leadership. Of course, there is Fostering an environment
no finish line and we continue to make progress where everyone feels valued 26 Employee numbers exclude external or temporary workers (ETWs)
and invest in the change we want to see within and is engaged and seasonal retail workers. Also, as part of our ongoing investment in
development and career experiences, we have approximately 45 U.S.
our teams. underrepresented groups (URG) employees working outside of the U.S.
in international assignments. These employees are not included in our
U.S. URG reporting. Upon return to their U.S. home location, they will be
included in U.S. representation going forward.
27 For this reporting period, we have adjusted our employee section
reporting to reflect calendar year data to provide more timely information.
Data included is through December 31, 2018 as opposed to fiscal year
ending on May 31, 2018, as used historically. To aid in comparisons to
past years’ data, NIKE has also reclassed its fiscal year data into calendar
year data.

NIKE office – Johannesburg, South Africa

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Employees
Measure NIKE, Inc. Totals by Gender (Global)
All Employees Directors+28 VPs
Diverse representation Gender29 CY16 CY17 CY18 CY16 CY17 CY18 CY16 CY17 CY18
and culture of inclusion Female
48% 48% 49% 37% 38% 39% 28% 32% 36%
31,338 32,082 31,800 2,091 2,146 2,414 116 119 145
52% 52% 51% 63% 62% 61% 72% 68% 64%
Male
33,878 34,657 33,532 3,553 3,513 3,731 299 258 257
Total 65,216 66,739 65,332 5,644 5,659 6,145 415 377 402
28 All employees who are Director level and above. Director, in this instance, refers to a certain management level within the company.
29 Numbers include those employees who identified a gender.

NIKE, Inc. Employee Totals by Race/Ethnicity (U.S.)30

All Employees Directors+ VPs
Race/Ethnicity CY16 CY17 CY18 CY16 CY17 CY18 CY16 CY17 CY18
American Indian or 0.4% 0.3% 0.4% 0.3% 0.2% 0.2%
- - -
Alaskan Native 124 121 122 11 9 8
8.0% 8.1% 8.5% 9.7% 10.4% 10.8% 4.6% 4.6% 5.2%
Asian
2817 2949 2831 388 417 477 16 15 18
Black or African 22.6% 23.5% 21.6% 4.7% 4.5% 4.5% 8.3% 7.6% 8.1%
American 7963 8530 7161 190 183 198 29 25 28
18.1% 19.0% 18.5% 5.1% 5.0% 5.0% 2.6% 2.1% 2.9%
Hispanic/Latino
6399 6911 6115 204 203 220 9 7 10
Native Hawaiian or 0.7% 0.8% 0.7% 0.1% 0.2% 0.2%
- - -
Other Pacific Islander 253 275 240 5 9 10
4.8% 4.8% 5.5% 2.5% 2.5% 3.2% 1.1% 1.2% 2.3%
Two or More Races
1693 1727 1826 102 101 141 4 4 8
0.1% 0.4% 0.6% 0.1% 1.5% 2.1% 0.3% 2.4% 2.6%
Unknown
15 141 190 4 61 92 1 8 9
45.4% 43.1% 44.2% 77.5% 75.6% 74.0% 83.1% 82.0% 78.8%
White
16,029 15,661 14,630 3,112 3,043 3,270 290 268 271
Total 35,293 36,315 33,115 4,016 4,026 4,416 349 327 344
30 Percentages may not add up to 100 due to rounding.

Board of Directors Board of Directors (BOD) Totals by Gender

At the Board level, NIKE has adopted qualification BOD
standards for nominees for Director which can be Gender CY16 CY17 CY18
found at our corporate website32, and includes 25% 18% 23%
Female
diversity and inclusion as a factor to be considered, 3 2 3
among others33. The Board believes that a variety Male
75% 82% 77%
9 9 10
and balance of perspectives on the Board results
Total 12 11 13
in more thoughtful and robust deliberations. The
company views diversity broadly, including gender,
ethnicity, differences of viewpoints, geographic BOD Totals by Race/Ethnicity
location, skills, education, and professional and BOD
industry experience, among others. Race/Ethnicity CY16 CY17 CY18
American Indian or
- - -
Alaskan Native
Since July 2018, NIKE has appointed three new
8%
Board Directors, one woman and two persons Asian
1
- -
from URG. Specifically, the Board added: 17% 18% 23%
Black or African American
Cathleen Benko, Former Vice Chairman and 2 2 3

Managing Principal of Deloitte LLP, also serving Hispanic/Latino - - -

as Deloitte’s first Chief Talent Officer and the Native Hawaiian or Other
someone whose racial or ethnic makeup is from one of the following: - - -
Pacific Islander
American Indian or Alaskan Native, Asian, Black or African American,
Hispanic/Latino, Native Hawaiian or Other Pacific Islander, or Two or
leader of Deloitte’s award-winning Women’s Two or More Races - - -
More Races. Initiative and broader inclusion focus; Peter B. Unknown - - -
32 investors.nike.com
33 In accordance with the 2018 Proxy Statement and NIKE’s corporate Henry, Dean Emeritus of New York University’s 75% 82% 77%
White
governance guidelines, nominees for Director are selected on the basis
of, among other things, distinguished business experience or other non-
Leonard N. Stern School of Business and 9 9 10
business achievements; education; significant knowledge of international William R. Berkley Professor of Economics and Total 12 11 13
business, finance, marketing, technology, human resources, diversity and
inclusion, law, or other fields that are complementary to, and balance the Finance; and John W. Rogers, Jr., Chairman,
knowledge of, other Board members; a desire to represent the interests
of all shareholders; independence; character; ethics; good judgment;
Chief Executive Officer and Chief Investment
diversity; and ability to devote substantial time to discharge Board Officer of Ariel Investments, LLC.
responsibilities.

FY18 NIKE Impact Report 15

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Employees
Staying Focused on Representation The Diversity Sourcing and Programs Team At the conclusion of the program, students will
has also created new pipelines for recruiting have an opportunity to apply for open positions
talent. For example, NIKE has developed a within the company.

4% 3% two-year program designed to provide relevant

and dynamic work experiences for retired/
retiring WNBA players. Through the initiative,
former professional basketball players are
We will continue to evaluate and explore
possible pipelines for recruiting diverse talent.
increase of VP-level increase of VP-level
provided an opportunity to join teams at NIKE Evolved Hiring Practices
representation of representation of U.S.
World Headquarters in various roles across the We remain focused on delivering a transparent
women, bringing the URGs, bringing the
organization. In addition to a competitive salary and consistent candidate experience and are
total to 36% total to 19%
and benefits package, program participants also focused on building capabilities for our
(8% increase since CY16) (2% increase since CY16)
also have a robust professional development HR teams and hiring managers. In the U.S., we
curriculum and dedicated mentors to support have implemented a new sourcing capability
a successful transition from the court to a requiring diverse slates for our Director and
At our Director and above level, year over year NIKE career. above positions. We have also begun posting all
we’ve seen a slight increase for representation Director and below positions – both internally and
of women and our U.S. URG population. To develop new talent pipelines in design, our externally – to increase the transparency around
teams have also created an apprenticeship our hiring process and available opportunities.
Our increase in representation at this level has experience with the community college system In addition, also starting in the U.S., we are
been driven by internal promotions, external of Los Angeles. This program offers students an optimizing job descriptions to attract a more
hiring and by staying focused on retention. We opportunity to gain work experience in design, diverse candidate pool and have eliminated the
continue to focus on hiring from within and footwear, apparel graphics, and color as part of collection of candidate salary history.
promoting and advancing our own team at a a six-month rotational program.
higher rate than external hiring. This has been,
and continues to be, a key focus and is an
important lever for increasing representation.

Over the last year we’ve promoted more women

and U.S. URGs at Director level and above
and have seen the representation within these
promotions increase since 2016. In addition,
we have increased the number of external
hires at Director level and above in the past
year, and seen diverse representation for both
women and U.S. URGs increase from 2016.
We are committed to increasing the diversity
of our workforce, and while we’ve seen some
measurable progress at our leadership levels,
we know we have more work to do to increase
the diversity of our workforce overall.

To support our efforts to increase diversity,

we will continue to provide visibility to career
opportunities, and invest in growth and
development for all employees. We have also
implemented a number of new strategies.

Building Diverse Pipelines

Through a significant investment in our Diversity
Sourcing and Programs Team, which is focused
on developing a pipeline of external diverse
candidates at leadership levels, we have
proactively formed partnerships with
professional organizations and nonprofits
to source diverse talent. Most recently, we
also announced a new internal recruiting
team – solely dedicated to supporting current
employees in their career journey at NIKE. NIKE retail employees – NYC SoHo store

FY18 NIKE Impact Report 16

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Employees
Measure FY18 Global Pay Equity New Benefits Initiatives: Taking Care of
Those Who Care for Others
Provide comprehensive, Several new benefits launched in early 2019
competitive, and equitable
pay and benefits $1 to $1 to provide even greater support for employees
to meet their personal needs. These include a
U.S. Military Leave benefit, increased adoption
and surrogacy benefits, as well as resources for
We know a personalized and holistic rewards Women vs. Men (global)
families caring for children with learning, social,
system is essential to attracting, inspiring, and
or behavior challenges.
developing talent. Through our Total Rewards
program, we strive to meet the diverse needs

$1 to $1
With the new Military Leave benefit, NIKE now
of our employees, deliver differentiated,
provides up to 12 weeks of paid time off every
competitive pay and benefits, and support
12 months.
a culture in which employees feel included
and empowered. URG vs. White (U.S.) For employees who need to step away from
work to care for their families, NIKE extended
Equal Pay for Equal Work We are committed to maintaining these pay equity ratios
every year and will continue to monitor this data. family care benefits effective January 1, 2019 in
We are committed to competitive pay and to
the Netherlands, our European Headquarters.
reviewing our pay and promotion practices
We significantly increased leave for non-birth
annually. At NIKE, we define pay equity as equal
parents (including adoption and surrogacy) to
compensation for women, men, and all races/
eight weeks paid leave. We also now pay Short-
ethnicities who undertake the same work at the
Term Care Leave at 100% of salary for up to ten
same level, experience, and performance.
days per year.

Measure
Employee growth,
development, and wellbeing
We engage and inspire our workforce by
investing in learning and development
opportunities that help them build on their
capabilities through learning tools, like the
more than 5,600 courses available online to
employees. With Career Central, we have
created a single resource to help employees
navigate their careers. The internal site equips
employees with tips, tools, and in-person
labs for their critical career-building moments.
Managers can also find tools here to better
support and guide their employees in planning
their careers and development.

Over this past year, we also created a new

required training called Manager Expectations:
Living a Culture of Respect, Inclusion, and
Accountability. To date more than 10,000
employees at NIKE worldwide have participated
in this training.
WHQ Just Do It Day celebration

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Employees
Enabling Great Leadership discussions and suggestions of how to mitigate NIKEUNITED Networks
Leadership Defined, a new leadership the potential for bias. The training and tools NIKE has eight employee networks, collectively
framework, was launched with our senior will focus on everyday scenarios and look known as NIKEUNITED: Ability & Friends,
leaders in November 2018. The framework at moments that matter such as how teams Ascend Network & Friends, Black Employee &
provides common language for what great are created, decision-making, hiring, and Friends, Latino & Friends, PRIDE, Nike Military
leadership looks like at every level. We expect developing relationships. Veterans & Friends, Native American & Friends,
to roll this framework out across NIKE in and Women of Nike & Friends.
FY20. We have increased our focus on and Investing in Diverse Talent
investment in developing our current and future In June 2018, we launched Amplify, an internal These employee-formed and managed
leaders. Our most senior leadership have been development program for high-potential women communities are sponsored by our Global
through an assessment and development and URGs at the Director and Senior Director Diversity and Inclusion team and offer resources
experience aligned with NIKE’s leadership levels. We currently have 101 employees in to a diverse spectrum of individuals across
behaviors and growth drivers. We will expand our first cohort, which ends in June 2019. NIKE. They advance the development of their
our development approach to next level We will continue to review and expand our members, promote cultural awareness, and
leaders and continue to develop high potential leadership development offerings in support of strengthen our commitment to diversity and
future leaders through a combination of 360 diverse talent. inclusion by working with NIKEUNITED and
assessment, coaching, development programs, our employee base generally. In 2018, we
and career experiences. Mentoring Future Leaders increased our investment in these networks
We launched employee mentoring programs and supported a focus on programs advancing
Continuing Our Commitment to in New York, Los Angeles, Memphis, and career and culture. Our NIKEUNITED teams
a Culture of Inclusion Converse headquarters in Boston, with a meet regularly with their executive sponsors
We have continued to deliver Unconscious Bias sharp focus on career development. We are and bi-annually with our executive leadership
Awareness trainings to teams live and have also piloting a digital mentoring platform at our team to review programming success.
developed a new Unconscious Bias Awareness World Headquarters location in collaboration
digital training. This new accessible training with members of our NIKEUNITED employee Wellness for All
will be made available for all employees and resource groups to provide broad and diverse As a brand committed to sport, we encourage
offered in 30 languages. The training will help insights and measure effectiveness and future our workforce to engage in a healthy lifestyle
build awareness of where bias may occur, scalability across the company. to the best of their ability. In fact, we see health
and the tools will help create meaningful as imperative to a high-performing workplace.
To help our employees live healthy, active
lifestyles, we provide fitness facility discounts
and various wellness services. For example,
NIKE has partnered with Headspace to enable
employees at our World Headquarters to
access its meditation and mindfulness services.

NIKE has an enduring commitment to serve

athletes and to be a workplace where our
employees feel empowered and inspired to
create the next chapter of the NIKE story. As
we look ahead, we will continue to sharpen our
focus against the following three areas:

• Align our resources and investments against

our key areas for growth – for our business
and for our people

• Invest in great leaders and managers

• Build an increasingly diverse and inclusive team

We will continue to seek opportunities to both

lead and be better.

Yoga class – NIKE WHQ Michael Krzyzewski Fitness Center

FY18 NIKE Impact Report 18

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Community Impact
Target
Invest a minimum of 1.5% 16.5m
of pre-tax income (PTI) kids moving
to drive positive impact
in our communities
Performance
21,000+
Annual Investment as % of PTI community coaches

FY15 / 1.9%
80+
FY16 / 1.8%
organizations

FY17 / 1.9%

FY18 / 1.8%
FY20 target
At least

1.5
%
Community isn’t just something we do, it’s
who we are. And our communities need our
help more than ever; the world is moving less,
and today’s kids are part of the least active
generation ever. That’s why NIKE is committed
to inspiring and supporting communities to get
kids moving, and the potential pay-offs are big.
Active kids are healthier, happier, and do better
– on the playing field, in the classroom and, one
day, in their careers and communities.

Made to Play is the focus of our community

efforts – working with partners around the In addition to getting kids moving, we fuel the Measure
world to get kids moving. Our impact portfolio efforts of our NIKE employees to give back
also includes other initiatives, such as NIKE to their communities and support the causes Through the power of our brands
Community Ambassadors and the NIKE they care about. During the past five years, and partnerships, get kids (ages
Community Impact Fund. In FY18, we drove NIKE employees have generated $23.5 million
through their donations and our matching gift
7–12) moving through play
impact in communities around the world by
investing $79.4 million, more than 1.5% of PTI – program, supporting more than 2,400 charities. and sport
exceeding our stated target. Similarly, $12 million has been donated to
community organizations over five years Kids who move, move the world. But kids today
through employee-led grantmaking initiatives are less active than they’ve ever been before,
Learn more:
like the NIKE Community Impact Fund a trend NIKE is working to reverse. In FY18,
Made to Play
(NCIF) – an innovative approach that engages we launched and deepened programming with
NIKE employees to advise where grants are organizations around the world to transform the
Through Made to Play, NIKE and our partners
awarded to support local organizations in the lives of kids through play and sport. We focused
have helped more than 16.5 million kids
communities where they live and work. In FY18, on where kids spend most of their time – in
get active by engaging with more than 80
NCIF granted more than $1.3 million globally. schools and with community organizations –
organizations around the world and supporting
working with local leaders, community groups,
more than 21,000 community coaches to help
governments, and other organizations.
kids enjoy play and sport.

FY18 NIKE Impact Report 19

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Community Impact
Our efforts focused on providing early, fun, and of their classrooms. Legendary athletes Li
positive experiences in play and sport, with the Na and Liu Xiang attended the ceremony
goal of inspiring a lifelong love of movement. that culminated with football star Cristiano
Ronaldo presenting a limited edition pair of
In the U.K., NIKE worked with Discovery CR7 Mercurial Campeones boots to Mr. Lv, one
Education, one of the leading sources of of the award-winning PE teachers. Forty-nine
educational content for teachers in the country, pairs of boots were auctioned off, with NIKE
to create an innovative online platform on matching the proceeds to donate, to the China
physical education. This initiative aims to reach Education and Development Foundation,
250,000 kids by the end of FY20 to get them NIKE’s Active Schools program, and Mr. Lv’s
moving more by working with parents and HeKou Primary School in Gansu Province in
schools. In February 2018, Olympic medalist northwest China, which used the funds to build
and NIKE athlete Daryll Saskia Neita joined 250 a soccer pitch using Nike Grind.
kids from the Beatrix Potter Primary School in
South London to officially launch Active Kids When it comes to getting kids to move, girls,
Do Better UK, which offers free online teacher in particular, urgently need our help; only about
resources to get kids active. one-third of girls aged 6–11 meet healthy
physical activity guidelines. Years worth of third-
In July 2017, NIKE and China’s Ministry of party impact data made the case for focusing
Education (MOE) hosted the country’s first on girls within our Made to Play portfolio, and
national Active Schools Innovation Awards also confirmed the need for more gender-
ceremony at Beijing’s iconic Water Cube. Out inclusive programming and coaching. For
of more than 1,000 applicants, the ceremony example, only 23% of U.S. youth coaches are
recognized 100 of the country’s most creative female, down from 28% in 2016. In FY18, NIKE
and inspiring teachers who are transforming announced a new relationship with Girls Inc. in
the culture of sport and physical activity in their the U.S. The work extends and builds on NIKE’s
schools. The Active Schools program is part of commitment to creating equal playing fields by
a long-term strategic relationship between integrating physical literacy and high-quality
NIKE and the Chinese MOE, which began in coaching into Girls Inc.’s curriculum for girls
2013, and in 2016 we set a goal of getting across the country.
2 million kids active — both inside and outside

Let’s Move! Active Schools

In 2013, NIKE committed to investing $50 million
over five years to get kids moving across the
U.S., as part of then-First Lady Michelle Obama
23,000
“Let’s Move! Active Schools” initiative. As part schools reached through
of this commitment, NIKE teamed up with Let’s Move! Active Schools
Partnership for a Healthier America (PHA) to:

• Increase the physical activity of kids

in schools and communities, reaching
millions of kids in more than 23,000
schools in all 50 states

• Help develop PHA’s seven Essential Practices

for Youth Physical Activity

• Support the efforts of advocacy groups

working to promote physical activity

We’ve learned that most school champions want

to be part of a national initiative, with a singular
focus on physical activity. By 2016, more than
half of them (57%) had implemented new
programs as a result of Let’s Move!
Active Schools.

FY18 NIKE Impact Report 20

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Community Impact

5 years $23.5m 2,400

donations and matching gifts charities

Measure We also give employees who volunteer $10 per The NIKE Community Ambassador program
Inspire a majority of NIKE hour to donate to the cause of their choice. gives NIKE retail employees the opportunity
to pass their love of sport on to the next
employees to engage with generation. Community Ambassadors
In FY18…
their communities and support aren’t just getting kids active today – they’re
their giving of expertise, time, inspiring them to be active for life. Global retail
employees learn quality coaching skills, and
and money then coach kids in sport and play in their local
schools and communities. Since the program’s
Our employees are talented, generous,
inception in FY16, nearly 8,000 of our NIKE
passionate about sport and enthusiastic
retail employees have regularly coached kids
about giving back to their communities.
nearly in in their communities.
We are proud to fuel their efforts. The NIKE
Foundation matches donations to charitable
causes, dollar-for-dollar, up to $10,000 each
7,000 31 The NCIF brings employees into the grant-
making process to advise on where grants
year per employee. For causes supporting employees countries
should be awarded to support the work of
sport and play in the community, we give
local organizations in the communities where
$2 for every $1 donated by employees. In
they live and work. In FY18, NCIF expanded
FY18, our employees, supported by the
to Barcelona and Memphis, bringing the
NIKE Foundation’s matching gift program,
This is great total of NCIF programs operating around the
contributed approximately more than
progress and we world to 11. In Barcelona and Memphis alone,
$7.5 million to more than 1,900 schools and
will continue to employees helped direct more than $200,000
charitable organizations around the world.
offer opportunities in grants to local charities that use the power
tracked more than for our employees of sport to positively impact kids in their
to engage in their respective communities.
116,000 communities.
volunteer hours

FY18 NIKE Impact Report 21

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Community Impact
Measure
Drive sustained community
impact in all of our primary
markets and sourcing backyards
In FY18, NIKE continued its sponsorship
of the Portland-based bike-share program,
BIKETOWN, with 1,002 bikes and 147 bike

300+
stations across the city. Launched in FY17,
the five-year commitment will provide $10
million to the program, contribute designs
for BIKETOWN’s stations and bicycles,
and increase accessibility. In FY18, NIKE, hours invested by top industry
in partnership with the Portland Bureau professionals in footwear and
of Transportation and other community apparel design to share their
organizations, helped launch Adaptive knowledge with students
BIKETOWN, with the goal of increasing biking
access for people of all abilities. NIKE also
launched the BIKETOWN Community Design
• Tokyo: NIKE worked with The Foundation empowering teachers to help promising
Challenge, a contest to create bike wraps
for Promoting Sound Growth of Children to students plan and work towards their high
representing the five “quadrants” of Portland.
launch JUMP-JAM, an innovative program school and college dreams. In FY18, the Wings
that merges sport and free play to give Scholars Program awarded full ride college
Throughout FY18, NIKE expanded its
elementary school aged children both the scholarships to 31 high school seniors in
relationships and programming investments to
physical activity and social skills they need. North America; 350 students in Greater China
get kids moving in several cities.
made it through their third and final year of
In our sourcing communities, we worked with high school with the Wings scholarship. The
• Berlin: NIKE celebrated the launch of Berlin
educators and community leaders to invest scholars program works in partnership with over
Kickt, a community football program created
in Unlock School Gates in Guangzhou and 30 nonprofit organizations around the world
with two organizations: the International
in Active With Sport in Ho Chi Minh City and who provide high school and college readiness
Rescue Committee and local NGO
Hanoi. With the goal of improving the quality services to underserved youth. In FY18, Wings
buntkicktgut. Berlin Kickt combines the
of physical education for primary school kids, provided operational grants to each partner to
universal language of football with social and
the NIKE-supported programs offered coach enable their powerful work in the communities
emotional skills training to help girls and boys
and educator training, and sport field days for they serve.
from primary schools across Berlin (including
families to drive activities for local kids. In FY18,
many refugees) to play, learn, and realize their
these programs reached more than 11,000 First-class product design is core to the Jordan
potential in a safe and secure environment.
primary school kids across 17 schools. Brand and Wings provides opportunities for
young people to pursue educational and
• Los Angeles and New York City: We inspired
The Jordan Brand Wings initiative supports career opportunities in the art and design fields
more than 12,000 runners to participate in
underserved youth around the world, with a through the Jordan Designers Program. In
the NIKE Go Races. These races helped raise
particular interest in communities that have FY18, top industry professionals in footwear
funds to support local schools and community
traditionally faced challenges accessing quality and apparel design invested over 300 hours in
organizations, like Students Run LA, the LA84
education. The Jordan Scholars Program sharing their knowledge with Chicago students.
Foundation, Lower East Side Girls Club, and
provides access to educational opportunities, Several student participants received the Jordan
Power Play NYC.
enabling young people around the world Wings scholarship and are pursuing higher
to dream beyond their circumstances and education in the field of design.
• Mexico City: NIKE brought play to schools
through “Juega Más: Escuelas Activas” (Play
More: Active Schools) in partnership with
From our home state of Oregon to offices worldwide, NIKE invests in communities where we have a
the nonprofit Yo Quiero, Yo Puedo (I Want
large employee presence. Below is a snapshot of two of our Oregon initiatives.
To, I Can), an initiative designed to improve
the quality of physical education in the city’s
FY18
primary schools. Initiative Goal FY18 Recipients
Giving Totals

NIKE School Increase Oregon high school graduation rates and help all
99 high schools $1.07 million
Innovation Fund students reach their full potential

NIKE Community Support local organizations in Oregon communities

44 organizations $550,000
Impact Fund and engage NIKE employees in grantmaking

FY18 NIKE Impact Report 22

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Unleash Human Potential: Priority Issues

Through our issue prioritization process, we Occupational Health and Safety NIKE’s occupational health and safety (OH&S)
identified a set of priority sustainability issues philosophy is anchored in our corporate
NIKE believes that the protection of life and Environment, Health, and Safety (EHS) Policy;
for NIKE in FY18 which determined the focal
health in the workplace is a fundamental right. Code of Conduct; Code Leadership Standards;
topics for this Impact Report. Most of these
Our vision is to provide a safe, hygienic, and and adherence to local law. With this foundation
issues overlapped with our existing 2020
healthy workplace, develop safety management in place, we build innovative approaches for
sustainability targets. For FY18 priority issues
systems, and foster a strong culture of safety in advancing safety systems and creating a
not specifically covered by a 2020 target, we
NIKE facilities as well as at NIKE’s suppliers. culture of safety.
have provided additional space in this report
to describe challenges faced and progress
Achieving this vision requires a clearly
underway. Occupational Health and Safety We monitor compliance to OH&S standards
communicated corporate safety policy, at NIKE owned and operated facilities and
falls into this category.
integration of safety leadership capabilities, contract manufacturers through external
standardized and repeatable safety
Learn more: audits and internal assessments. Gaps in
management systems, and an active and implementation are treated as opportunities to
Issue Prioritization
engaged workforce that is properly informed develop management skills and tools to close
and adequately trained on the hazards of their gaps and improve performance. Additionally,
job and how to perform their work safely. We we factor the results into our sourcing
have begun to factor these safety capabilities strategies in how we evaluate contract factory
into how we measure safety performance manufacturers performance, and how we
at NIKE owned and operated facilities and determine with whom we will engage and grow
contract manufacturers. our business. We have begun to extend this
approach deeper into our supply chain.

Creating a Culture of Safety in

Contract Factories
Fire safety, building safety, occupational
health and machine safety issues remain the
highest risk issues in the footwear and apparel
manufacturing industry. When we find issues
of non-compliance in these high-risk areas, we
respond immediately and work with contract
factories to remediate. We divest from those
factories that fail to elevate performance.

• F
 ire Safety: We require Tier 1 suppliers34
to adopt fire prevention and emergency
action plans to protect workers during
normal working operations and emergency
situations. To accelerate management
capability, worker involvement, and
understanding of fire safety issues and
preventative measures, NIKE engaged
with the Fair Labor Association (FLA) and
Institution of Occupational Safety and
Health on a global initiative to develop and
implement a portfolio of fire prevention
and fire safety tools for factories. In FY18,
the program expanded to over 33 factory
locations – more than 2,100 workers were
trained as safety leaders, and more than
90,000 workers completed training sessions
on fire safety.

Factory workers – Ho Chi Minh City, Vietnam

34 Tier 1 suppliers are finished goods contract manufacturers.

FY18 NIKE Impact Report 23

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Unleash Human Potential: Priority Issues

• B
 uilding Safety: Buildings must be Establishing a culture of safety is a continual OH&S34 Data for NIKE Employees and Tier 1
constructed or retrofitted according to journey. We recognize that individual contract Focus Factories35
the laws of the manufacturing country, factories and facilities are at different levels CY16 CY17 CY1836
international standards if local laws do not of maturity. NIKE has developed a safety NIKE employees37 38
exist, or certified structural engineering maturity model, based on existing academic Distribution (industry code: 493110)
construction standards. research and published white papers, and Total Case Incident NIKE 1.93 1.81 1.74
assessment tools to allow our contract Rate (TCIR) Industry39 5.10 5.20 5.20
• O
 ccupational Health: Additionally, we manufacturing partners to self-evaluate their Lost Time Injury NIKE 1.08 1.24 1.21
require our suppliers to anticipate, recognize, capabilities to implement a world-class safety Rate (LTIR) Industry 1.70 1.90 1.90
evaluate, and control occupational health management system in their factories. The AIR MI (industry code: 326113)
and hygiene hazards in the workplace, use ability to self-criticize, accurately assess NIKE 2.80 3.70 3.56
TCIR
routine monitoring and analytical methods strengths, and identify areas for improvement Industry 4.30 5.20 5.20
to determine the potential health effects of is a critical enabler of establishing a mature NIKE 0.82 0.72 1.31
LTIR
hazards that are present in the workplace, culture of safety. To support this capability Industry 1.10 1.40 1.40
and control worker exposure to these and accelerate safety culture in our factory Offices (industry code: 551114)
health hazards. contract manufacturers, NIKE has developed NIKE 0.24 0.27 0.32
TCIR
an online training on how to use our self- Industry 0.80 0.90 0.90
• M
 achine Safety: Our new Code assessment tools.
LTIR
NIKE 0.08 0.07 0.17
Leadership Standards require our contract Industry 0.30 0.20 0.20
manufacturers to implement machine Factories self-assess their safety culture using Tier 1 Focus Factories40
management programs and track their the maturity model. The self-assessment can Footwear (industry code: 3162)
performance against international machine be supported by third party consultants or TCIR
NIKE 0.50 0.40 0.39
safety standards. NIKE staff, and the results are calibrated with a Industry 6.70 4.20 4.20
worker/management safety perception survey. LTIR
NIKE 0.30 0.30 0.25
The calibrated results are used as a leading Industry 2.10 1.10 1.10
indicator of safety performance. Apparel (industry code: 3152)
NIKE 0.90 0.60 0.57
TCIR
Industry 2.10 2.30 2.30
NIKE 0.50 0.40 0.42
LTIR
Industry 0.60 0.50 0.50
Equipment
NIKE 1.70 0.80 0.54
TCIR
Industry N/A N/A N/A
NIKE 1.10 0.80 0.54
LTIR
Industry N/A N/A N/A

34 O H&S data is reported using calendar year instead of fiscal year to align
data with regulatory reporting requirements, including OSHA and BLS
(which is used as an industry standard).
35 Focus factories are key strategic contract factories within our source base
that represent the majority of finished goods production of NIKE footwear,
apparel, and Converse footwear.
36 Using CY17 BLS rates as BLS rates for CY18 have not been published at
the time of the FY18 NIKE Impact Report publication.
37 The reported injury fates reflect a combination of NIKE full-time and
certain external temporary workers.
38 Data is collected based on U.S. legal reporting requirements, reporting
on all NIKE operations except retail which is excluded from OSHA
recordkeeping requirements. Retail will be included in future reports.
39 The industry average comes from the U.S. Department of Labor; Bureau
of Labor Statistics. Each industry classification (such as DC, Air MI,
Offices, Footwear Manufacturing, Apparel Manufacturing) reports a
separate average for recordable injuries and lost time rates (which
are captured).
40 For Tier 1 focus factories by Product Engine for calendar year 2016.
Self-reported by factories. The BLS does not calculate manufacturing
rates for equipment.

NIKE Air Force 1 Flyleather customization event

FY18 NIKE Impact Report 24

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Unleash Human Potential: Priority Issues

For example, in Cambodia, all NIKE factories
are monitored under the Better Work program.
In 2017, the Cambodian Labor Ministry drafted
safety and health guidelines that included
items on preventing incidents of fainting
among factory workers. In partnership with
Better Work, the NIKE team confirmed that the
factories were meeting these requirements.
Better Work has specifically called out the issue
of poor nutrition – as one of many contributing
factors to mass faintings – and we continue to
explore with Better Work and our suppliers how
to best address this and other drivers behind
this complex issue.

Committed to Creating a Safe and Healthy

Workplace at NIKE Facilities
In FY18, NIKE developed a comprehensive,
enterprise-wide Environmental Health & Safety
Policy. The policy affirms our commitment to
operating in a safe and responsible manner in
order to protect the environment and safeguard
the health and safety of our employees,
contract manufacturers and customers. It
formally extends NIKE’s Code of Conduct
and Code Leadership standards to NIKE’s
own facilities as well as our supply chain
manufacturers. The policy also outlines the
ways in which we meet our commitments. NIKE
published the policy as a public dedication of
our commitment to continually innovate and
improve the way in which we create a safe and
healthy workplace.

General OH&S compliance remain a constant

goal for NIKE owned and operated facilities,
with individual business operations focusing
on the biggest risks to their operation. NIKE’s
global OH&S program centers on developing
and implementing consistent management
Factory worker – Putian, China systems to enable risk-based prioritization.
Machine safety, chemical management,
controlling hazardous energy, and implementing
As we continue our journey to elevate a culture strengthened our program through our new comprehensive injury reporting are examples of
of safety within our supply chain and across our Code Leadership Standard. Additionally, we ongoing enterprise-wide initiatives.
industry, we actively seek opportunities to team worked jointly to develop simple tools and
up with others beyond NIKE to resolve common training on boilers and pressure vessels for Learn more:
OH&S issues. In addition to our engagement the benefit of all Better Work factories, not Environmental Health & Safety Policy
with the FLA, we work closely with Better Work only NIKE contract manufacturer factories.
– a joint program of the International Labour NIKE actively participates in local Better Work
Organization and the International Finance programs in Cambodia, Indonesia, Vietnam,
Corporation – to advance issues of health Nicaragua and Jordan. Our local teams in these
and safety in our industry. Safe operation of countries, along with Better Work, continue to
boilers and pressure vessels is an emerging work closely with our contract manufacturers to
issue in our industry. NIKE benchmarked Better build management capabilities and enhance the
Work’s approach to boiler safety, and we have health and wellbeing of their workers.

FY18 NIKE Impact Report 25

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FY18 NIKE Impact Report 26

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FY18 Highlights

93% 140,000
Percentage of NIKE’s 542 Number of workers in
contract factories that were contract factories deploying
rated Bronze or better, our NIKE’s engagement and
definition of sustainable wellbeing survey

0 1m
Number of child Number of contract
labor findings factory workers in
NIKE supply base

471
50% Number of audits
performed by NIKE
or on our behalf
Increase of contract factories
participating in a trade finance
program with the International
Finance Corporation (IFC)

Tier 2
NIKE added additional
strategic material
suppliers (Tier 2) to our
Manufacturing Map

FY18 NIKE Impact Report 27

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Sustainable Sourcing 41

Manufacturing Map
An interactive list of our Tier 1 finished
goods manufacturers and strategic
Tier 2 materials suppliers is available at
http://manufacturingmap.nikeinc.com
The map includes detailed information
on factory location, supplier group, type
of product made, number of workers,
gender and migrant percentage, and
average age.

These include the FLA and Better Work, a

joint program of the International Labour
Organization (ILO) and the IFC.

NIKE continuously seeks to improve our

approach to evaluating working conditions in
our supply chain and works with our suppliers
to enhance their capabilities. In recent years,
we have made significant changes to improve
supplier compliance monitoring with our Code
of Conduct and Code Leadership Standards.
For example, in FY18, we increased the number
of unannounced audits, use of third-party
auditors, and auditor rotation.
NIKE Air Force 1 showcasing the capacity
of Nike Flyleather to take print

Target NIKE views compliance as the foundation for Audit Counts42

business relationships that provide fair and safe FY16 FY17 FY18
Source 100% from working conditions, sustainable livelihoods,
and protect the environment. Our relationship
NIKE 538 390 415

factories that meet our with factories is based on the standards set

FLA
Better Work 31
7
15
1
51
5

out in the NIKE Code of Conduct and Code

definition of sustainable Leadership Standards, which are aligned
Total 576 406 471

with leading international standards to 42 Audit counts were lower in FY17 and FY18 primarly due to NIKE’s

Performance protect worker rights, create a safe working introduction of the Factory Compliance Ownership (FCO) program. As
the next step in evolving sustainability and compliance management,
Factories Rated Bronze or Better (%) environment, safeguard communities where NIKE introduced the FCO program in early 2016. The program provides
incentive opportunities for factories that maintain NIKE’s compliance
suppliers operate, and advance environmental standards and move beyond minimum compliance. Included in the
protections. Across our compliance and incentives is reduced audit frequency with self-assessments when
a factory has met thresholds for maintaining compliance over a

FY15 / 86% capability building initiatives, our approach number of years.

is grounded in supplier ownership.

FY16 / 87% Learn more: When factories are audited based on

NIKE Commitment to Labor Standards NIKE standards, their rating informs our
Sustainable Manufacturing and Sourcing
FY17 / 91% We regularly review supplier factories to assess Index (SMSI). Ratings of Yellow or Red
their ability to meet our high standards. These indicate performance below NIKE’s minimum
assessments take the form of audit visits – both compliance expectations; Bronze reflects
FY18 / 93% 44 p.p (vs. FY11 BL)
announced and unannounced – by internal baseline compliance; Silver signals enhancing
FY20 target and external parties who measure against our capabilities to leverage sustainability as a

100 % Code Leadership Standards and the Code

of Conduct. NIKE also works with third-party
business driver within our industry; and
Gold indicates world-class in sustainability
organizations to independently audit facilities. in any industry.

41 We removed the “ELEVATE A CULTURE OF HEALTH AND SAFETY” measure from this section because we cover it in the “Additional Priority Issues: Occupational Health and Safety” section of the report.

FY18 NIKE Impact Report 28

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Sustainable Sourcing
Sustainable Manufacturing and Sourcing Index (SMSI): Factory Ratings

2% <1%
Yellow: Inconsistent; remediation No rating
plans in place to return to compliance

4% 1%
Red: Serious issues or failure NIKE, Inc.  ilver: Industry-leading manufacturing
S
to return to compliance; standards and innovation
remediation plans in place to 93% Bronze or better
address or under review for exit
542 factories 92%
Bronze: Baseline compliance
with our Code of Conduct

Footwear

Apparel

Equipment
IN COMPLIANCE with NIKE Code of Conduct and Code Leadership Standards

RED RED YELLOW BRONZE SILVER GOLD43

NO RATING UNSUCCESSFUL INCONSISTENT MEETS EXCEEDS GLOBAL LEADER

1 factory 23 factories 12 factories 499 factories 7 factories 0 factories

0 4 0 113 7 0

1 11 11 305 0 0

0 8 1 81 0 0

43 World-leading manufacturing standards and innovation

When facilities receive a below compliance and processes to prevent future reoccurrence. We continue to review the most frequent areas
rating, they are expected to remediate the For the situations where it was found workers of non-compliance, such as hours, wages, and
issue with onsite verification of the remediation had paid fees for their employment, we required benefits (see “Audits, Non-Compliance” table)
within six months. For example, in FY18, as a suppliers to repay workers for such fees. In all to identify ways we can work with our contract
result of our enhanced audit program, we found instances, full re-audits are conducted to verify factories to strengthen compliance.
a few isolated instances of foreign migrant corrective actions have been completed.
worker employment practices that were in After the SMSI was launched in 2012, NIKE
violation of NIKE’s Code of Conduct and Code If a facility does not sufficiently address an set the target of having 100% Bronze or better
Leadership Standards. The issues involved issue, it is placed on probation. Further failure factories by 2020. In 2012, 49% of 910 contract
workers paying fees related to their recruitment to meet compliance will lead to NIKE potentially factories were rated Bronze. By the end of
and employment and one instance where considering a responsible exit, which includes FY18, just over 93% of NIKE’s 542 contract
the facility had penalties for early contract providing early notice and a clear ramp-down factories were rated at Bronze or beyond. The
termination. In each case, we worked with the schedule. If critical issues are found, immediate higher percentage of Bronze is due both to
supplier to remediate the identified issues and remediation is required. improvements in factory compliance levels
to strengthen their Human Resource systems and a reduction of factories failing to achieve
baseline compliance in our source base.

FY18 NIKE Impact Report 29

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Sustainable Sourcing
Factory Ratings Audits, Non-Compliance (%)45 As part of requiring fair working conditions at
FY16 FY17 FY18 FY16 FY17 FY18
our contract manufacturers, NIKE is continuing
No Rating 2 3 1 Working Hours 39 43 39
its work to incentivize contract manufacturers
Red 27 23 23 Wages and Benefits 35 36 34
to eliminate EOT under the 100% Bronze audit
Yellow 60 28 12 Regular Employment 11 2 7
program. This issue is prevalent throughout
Bronze 570 532 499 Forced Labor Risks 0 6 5
our industry and can affect the wellbeing of
Silver 4 5 7 Harassment and Abuse 4 4 3
workers, result in errors in product quality, and
Gold 0 0 0 Discrimination 2 2 3
has been shown to be of uncertain benefit as
Total 663 591 542 Freedom of Association the additional hours can be less productive than
and Collective 0 0 1 normal hours.
Bargaining
We continuously search for opportunities – like Age Standards 0 1 0
One of the requirements of the NIKE Code
improving the quality of audit data, addressing Other 8 5 8
Leadership Standards is to eliminate excessive
the root causes of issues, and working with
45 T
 he top issues identified in audits in FY16, 17, and 18 remained similar working hours so that workers at supplier
other brands in the supply chain – to drive with working hours, wages, and benefits being the most common types
factories do not work more than 60 hours a
consistent performance as we strive for of findings. For all findings, the factories were required to remediate the
identified issues and the corrective actions were verified through another week and have at least 24 hours off in every
100% compliance. onsite audit.
seven-day period.
NIKE is a signatory of the Social Labor Worker Count Results46
In FY18, we saw a decrease in the number
Convergence Program, which seeks to drive FY15 FY16 FY17 FY18 of factories failing to meet NIKE’s baselines
industry convergence on factory compliance to Americas 87,234 71,904 77,833 72,986 expectations for EOT, from 23 factories in
reduce audit duplication and free up resources EMEA 17,197 18,674 18,396 19,114 FY17 to 13 factories, representing 2.4% of
to invest in improving working conditions. It is N Asia 236,142 233,561 198,877 170,724 the supply base.
also based on a model of supplier ownership S Asia 287,862 304,932 296,984 286,938
that aligns with NIKE’s approach to sustainable SE Asia 386,293 436,970 444,907 473,258 However, a low rate of repeat findings continues
and consistent performance. During FY18, Total 1,014,728 1,066,041 1,036,997 1,023,020 to make it challenging to predict and anticipate
NIKE was actively involved in supporting
where EOT will occur. For example, of all the
the development of this tool and verification 46 Count of workers in NIKE source base at fiscal year-end for period shown.
factories with an EOT finding in FY18, none
methodology and in FY19 will work to pilot this
were repeat offenders from FY17. In fact, 45%
approach in our supply chain. Measure of factories with EOT incidents during FY18
Learn more: Eliminate excessive overtime (EOT) either resolved the issues and went on to return
to a Bronze rating by the end of the year or
Social Labor Convergence Program
were no longer NIKE factories.
Performance
Factory Ratings: by Product Engine44 Factories with EOT (%) While the Code of Conduct focuses on what
FY16 FY17 FY18 our suppliers do, we recognize that there is
T1 Apparel 394 363 328 more work that NIKE can do to accelerate
No Rating 2 0 1 FY15 / 3.3% compliance and progress in our suppliers’
Red 15 14 11 factories. We are actively working to support
Yellow 42 18 11 improvements in the enforcement of local
Bronze 335 331 305 FY16 / 3.2% laws through our support of Better Work
Silver 0 0 0 and training of factory management through
Gold 0 0 0
FY17 / 3.9% Lean 2.0. NIKE is also continuing to evolve
T1 Equipment 127 101 90 demand and production planning with our
No Rating 0 2 0 suppliers to smooth volume fluctuations and
Red 7 3 8
FY18 / 2.4% 0.9 p.p. (vs. FY15 baseline) enhance predictability. However, some of these
Yellow 8 6 1
FY20 target
factories are multi-brand facilities and require

0%
Bronze 112 90 81 a collaborative approach. Our long-term vision
Silver 0 0 0 is to facilitate greater industry engagement and
Gold 0 0 0 alignment that shifts the approach suppliers
T1 Footwear 142 127 124 take to forecasting.
No Rating 0 1 0
Red 5 6 4
Yellow 10 4 0
Bronze 123 111 113
Silver 4 5 7
Gold 0 0 0
Total 663 591 542
44 Represents Tier 1 (T1) or finished goods manufacturing.

FY18 NIKE Impact Report 30

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Engaged Workforce
Target
Ensure contract factory
workers share in
productivity gains
Every contract factory worker in our supply
chain has the right to compensation sufficient
to meet their basic needs and provide some
discretionary income. We are engaging with
our suppliers to progressively meet this
requirement. We know that factory worker
wages can increase as overall factory
operational efficiency improves, and we
know that valued workers accelerate factory
performance to the benefit of workers,
factories, and NIKE.

Piloting New Compensation

and Benefit Models
We worked with Dara O’Rourke and Niklas Lollo
from the University of California at Berkeley
from FY15–18 to explore new methods
to increase the value created in factories
Factory worker – Putian, China
and share that with workers. The resulting
Compensation and Benefits research pilot
focused on changing compensation structures that presents a robust alternative to the current tracking, which increased facility buy-in and
and tracking increases in both factory model of compensation used in most factories. measurement of impact. We observed greatest
productivity levels and take-home pay. This is a complex issue and while this pilot improvements with facilities that invested
alone cannot address the complex challenge of broadly in their HR management system,
The research pilot implemented an alternative wages, it is an important step forward. such as their HR information systems (HRIS),
approach to compensation, including improved recruitment and hiring practices, benefits
transparency for employees around how pay Compensation systems that reward procedures, communications, and training and
is calculated and incentive systems that are performance and attract talent will benefit development systems.
better aligned to productivity goals. The results all stakeholders. We are now collaborating
were encouraging; the factory we worked with internally with our leading suppliers, and with For example, one facility in Indonesia had
has independently chosen to further scale external experts, to explore next steps on higher than comparable rates of unplanned
versions of the approach to all lines within the scaling the learnings from this research pilot. absenteeism. After evaluating, management
pilot factory as well as to other factories in discovered that workers had difficulty
their network. Reducing Absenteeism and Turnover understanding the complex process to take
Since NIKE supplier facilities have relatively low leave, so they took leave without notice.
Learn more: rates of unplanned absenteeism and turnover A simpler leave application procedure was
Compensation and Benefits Research Pilot relative to comparable facilities. In FY18, NIKE introduced and implemented across the factory
focused on working with a select set of facilities with clear guidance and training to ensure
We are continuing to deepen our understanding where we believed the greatest additional awareness of the workers. The factory also
of what elements of the pilot were key to its improvements could be made. invested in HRIS and provided onsite HR kiosks
success, such as information systems that to make it more convenient for the workers to
connect business and operator data, lean Ten facilities were selected, each with higher apply for leave in advance. This resulted in a
processes that focus on enabling workers than average rates of unplanned absenteeism significant reduction (approximately 25%) in
through standard processes and skilling, and/or turnover relative to their peers. NIKE unplanned absenteeism during the measured
problem-solving and engagement activities, field teams worked closely with each facility to period against FY17 data.
worker-management communication channels, perform a thorough root cause analysis on their
and strong employee input throughout the respective rates and to support development In FY19, we will expand this targeted approach
process of implementing a new compensation by factory management of a customized with an additional set of supplier facilities.
system. Our unique academic relationship has improvement plan. Each engagement
produced a truly multi-stakeholder approach also included a detailed cost analysis and

FY18 NIKE Impact Report 31

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Partnerships to Accelerate Industry Change

Target At the end of FY18, 35 factories were In FY17, we revised the existing EWB survey
participating in a trade finance program with the and translated it into six languages. By the
Establish partnerships IFC, which incentivizes supplier performance by
offering lower trade finance terms for facilities
end of FY18, four more languages were added
as well as additional refinements based on
that support the needs of rated Bronze or better. This represents a more stakeholder input.
than 50% increase from FY17.
workers both inside and In FY18, the revised EWB survey was deployed
outside the factory In FY17 and FY18, NIKE worked with two
technology providers, MicroBenefits and
in 22 supplier facilities in nine countries,
employing over 140,000 workers. The surveys
Workplace Options, in our efforts to support were conducted online, onsite and remotely
Measure contract manufacturers in adopting technology by two third-party vendors, MicroBenefits, and
Scale services to support to improve communication, enhance worker Workplace Options.
knowledge and experience, and improve ease
management and workers of access to HR tools and policies. At the We also rolled out a standardized reporting
for improved engagement end of FY17, six NIKE supplier facilities were template in FY18. This protects worker
and wellbeing using one of the two platforms for services to anonymity by disaggregating survey results by
workers. In FY18, three new facilities adopted gender and job role as well as any other facility-
Many of the challenges we face are too these technology platforms. In FY19, we look selected segmentation. The reports do not
complex for any individual brand or organization to further expanding this work at NIKE supplier contain a single score on engagement. Instead,
to solve alone. We therefore work with a wide facilities – either with the adoption of these suppliers are encouraged to identify areas of
range of stakeholders to think creatively and or similar platforms or the development of weakness from the survey, understand more
pool our skills to improve outcomes for workers suppliers’ own digital solutions. about the reasons behind the results, and take
and their communities. That includes identifying action to address issues raised. In FY18, we
third party service providers who can work Measuring Engagement and Wellbeing launched a toolkit for our internal teams to use
directly with our contract manufacturers on Supplier ownership of worker engagement is in association with facility management. The
improving the workplace experience. NIKE’s long-term goal. We have continued to toolkit assists with interpretation, root cause
scale our Engagement and Wellbeing (EWB) evaluation and identifying ways to resolve
Third Party Solutions approach, which includes a survey that was issues. It also contains an evolving set of tools
In FY18, we expanded by 34% the number piloted and refined over several years and is such as readings, case studies, trainings, and
of facilities where we accept participation in statistically validated and correlated with key other resources to help factories address key
the ILO’s Better Work Program in lieu of NIKE business metrics. The approach is grounded areas where they want to improve.
specific labor audits (from 47 factories in FY17 in creating opportunities for suppliers to gain
to 63 factories in FY18), including facilities a deeper understanding of their employees’ NIKE also established key performance
producing licensed products for NIKE. experience to drive engagement and wellbeing indicators for suppliers based on timely
improvements through a factory-owned model. communication of survey results to their
workers and action planning against results.
This aligns with our objective for suppliers
to use the tool to drive improvement and
strengthen accountability among factory teams.

As in many areas, NIKE recognizes the strength

of creating common industry approaches
to reduce duplication and identify the most
effective approaches. In FY17 and FY18, NIKE
worked closely with a number of brands to
understand different approaches to worker
engagement and wellbeing and identify
opportunities to harmonize and accelerate this
work across the industry.

34%
of facilities participate
in the ILO’s Better Work
Program in lieu of a NIKE
specific labor audit

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Transform Manufacturing: Priority Issues

Child Labor
NIKE specifically and directly forbids the use
of child labor in facilities contracted to make
NIKE products. The NIKE Code of Conduct
requires that workers must be at least 16
years of age, or past the national legal age of
compulsory schooling and minimum working
age, whichever is higher. The requirements
also specify that workers between the ages
of 16 and 18 cannot be employed in positions
which may be hazardous, such as working
with chemicals or heavy machinery, nor can
they work at night. Our Code of Conduct age
requirements exceed those of the ILO which,
in specific circumstances, allows some work for
workers under the age of 16.

NIKE’s Code Leadership Standards include

specific requirements on how suppliers
must verify workers’ age prior to starting
employment. They also contain specific
requirements for actions the facility must take to
remediate a situation where the supplier violates
Factory worker – Jakarta, Indonesia NIKE’s standards, with the focus on protecting
the rights and wellbeing of the worker. Those
requirements include:
Through our issue prioritization process, we NIKE contracts with, rather than owns or
identified a set of priority sustainability issues operates, the facilities that produce its
• Removing the underage employee from
for NIKE in FY18, which determined the focal products. However, we are prioritizing and
the workplace
topics for this FY18 Impact Report. Most of growing relationships with suppliers who
these issues overlapped with our existing 2020 share our commitment to respect human
• Providing support to enable the underage
sustainability targets. For FY18 priority issues rights and are investing in their workforces.
employee to attend and remain in school or
not specifically covered by a 2020 target, we NIKE’s expectations for suppliers start with
vocational training until the age of 16 or the
have provided additional space in this report our Code of Conduct and Code Leadership
minimum legal working age, whichever is
to describe challenges faced and progress Standards. NIKE’s Code of Conduct is aligned
higher
underway. Child Labor falls into this category. with international standards and contains the
foundational requirements all suppliers must
• Agreement to rehire the underage employee
Learn more: meet in producing Nike-branded products.
when they reach the age of 16 or legal
Issue Prioritization The Code Leadership Standards contain more
working age if the worker wishes
detailed requirements on how the NIKE Code
Advancing Respect of Conduct must be implemented. They also
Teamwork
include specifications on the development of
for Human Rights robust management systems that are essential During FY18, we continued our relationship with
At NIKE, we are deeply invested in advancing to consistently maintaining compliance with the FLA, Better Cotton Initiative implementing-
respect for human rights throughout our local law and our standards. partner İyi Pamuk Uygulamalari Derneği (IPUD),
operations and extended value chain. We and several other international brands to
evaluate the impact of our business and set Learn more: improve employment practices in the Turkish
public targets to drive holistic, continuous Code of Conduct cotton sector. The project focuses on preventing
improvements against our commitment to Code Leadership Standards and addressing child labor risks and improving
conducting business ethically and sustainably. Human Rights labor recruitment practices at the farm level.
NIKE supports human rights as defined by the
Universal Declaration of Human Rights, which
recognizes that “all human beings are born free
and equal in dignity and rights.” Child Labor Findings
FY16 FY17 FY18
Number of Child Labor Findings/Events 0 0 0
Number of Other Age Standard Findings/Events 0 1 0

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Impact Appendix

FY18 Highlights

75%
73% Percentage of
renewable energy
secured in our owned
99.9%
Percentage of Nike brand or operated facilities Percentage of footwear
footwear and apparel styles through existing finished goods manufacturing
that used some recycled agreements waste that was recycled or
materials converted to energy in the
fourth quarter of FY18

6.4bn 10m
Number of plastic Pounds of athletic
bottles transformed footwear and surplus
into recycled polyester manufactured scrap
footwear and apparel turned into performance
since 2010 products through the
Nike Grind program

0 32bn
Amount of Liters of water
PFC-based saved by sourcing
finishes in our sustainable cotton
products by 2021

Environmental Moonshot
In the FY14/15 Sustainable Business Report, Our current 2020 targets are milestones in our industry, NIKE extrapolates much of our
we introduced our intent to double our business towards the moonshot. Our 2025 targets data in Tier 2, 3, and 4 using industry averages.
with half the environmental impact. This bold will expand the scope of coverage and aim We plan to work with our industry to expand our
moonshot was meant to spur progressive to further reduce our impact. In addition to ability to get accurate, reliable environmental
thinking within our organization and serves as a improving performance, we are also enhancing impact assessments across the value chain and
north star for our work in sustainability, guiding our capability to track performance further back embrace more systemic change to scale low-
our efforts in the near-term and informing the in the supply chain. Right now, like most impact solutions.
development of our long-term commitments.

FY18 NIKE Impact Report 35

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Impact Appendix

Product

$2bn
of revenue generated
by Flyknit products

We innovate for the athlete with zero compromise Footwear

Target between performance, style, and sustainability. In our footwear manufacturing, we continued
Deliver products for NIKE is known for creating innovative
to focus on our biggest impact areas in FY18:
materials and waste. Our teams leveraged
maximum performance performance products. Today’s consumers improved manufacturing methods, such
demand that brands create and manufacture as automation in die cutting, stitching and
with minimum products that both perform and look great cementing, to reduce waste, energy, water and/
but also have a lighter impact on the
impact, with a 10% environment. At NIKE, material innovations –
or improve worker safety and health.

reduction in the average such recycled polyester, Flyknit, Flyleather,

and Nike Air – continue to change the world
In FY18, we continued to embed sustainability
into core decision-making. For example, a
environmental footprint of sustainable performance. cross-functional team (including footwear,
engineering, cost engineering, and product
To track the environmental impact of products, sustainability) set seasonal pattern efficiency
Performance we look at sustainability attributes of product targets for the category teams. This effort
Average Product Carbon Footprint through our Material Sustainability Index (MSI), helped NIKE Footwear use a waste metric
(kg CO2e/unit) Apparel Sustainability Index (ASI), and our to help manage category performance.
Footwear Sustainability Index (FSI). These Additionally, Kids and Women’s NIKE
2% (vs. FY15 baseline)
indices provide an environmental profile of each Sportswear – two of NIKE’s biggest categories
7.5 product. This transparency enables us to make
7.19 7.15 7.45
– created strategies, processes, and product
7.33 better choices in designing, product creation, reviews focused on sustainability.
and planning.
7.0
Shoes made with Flyknit create 60%
However, average carbon footprint has less scrap waste than a typical shoe upper. To
FY20 target increased compared to the FY15 baseline due
10%
6.5 date, products with Flyknit have totaled over
to an increase in both material per unit (apparel $2 billion in revenue. As we scale, we rely on
getting heavier) and overall manufacturing the innovation of our vendors in the value chain.
emissions intensity (driven by grid electricity in Nike’s Flyknit supplier, Unifi, continues to invest
FY15 FY16 FY17 FY18
Vietnam and style/model mix). in new technologies and materials that allow
us to produce product that is low waste and
While this target tracks our product carbon contains a high percentage of recycled content
footprint, our efforts to integrate sustainability (90% on average).
impact also have an impact on a wide range of
environmental factors such as water, chemicals, Learn more:
and waste. NIKE’s Waste to Landfill 2020 Target

Learn more:
Product and Materials Sustainability Indices
Explore NIKE’s Value Chain Footprint

FY18 NIKE Impact Report 36

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Impact Appendix

Product
We have scaled Nike Air – one of our most Apparel We continue to observe a shift in consumer and
sustainable innovations – to 50% of our In FY18, NIKE Apparel saw recycled polyester market demand toward cotton rich products,
NIKE footwear. Since 2008, all Nike Air soles usage increase by 13% compared to FY17. like cotton fleece and sportswear fabrics. We
are composed of at least 50% recycled This was driven by high volume products like know that cotton can have a large impact on
manufacturing waste. Released in FY18, the Legend Tee Shirt, NBA jerseys and shorts, our water and chemical footprint. As a result,
Nike Air Max 270 air sole contains more than global football kits (World Cup 2018 and clubs), NIKE Sportswear apparel teams are increasing
70% recycled manufacturing waste – a tribute and Women’s (bras and pants) and Men’s their focus on efficiency to counteract fabric
to the ever-increasing quality of our repurposed Training (Therma Fleece). weight increases while continuing to develop
materials. Our Air Manufacturing Innovation our portfolio of sustainable cotton options
facilities also divert over 95% of manufacturing (organic cotton, recycled cotton and BCI
waste from landfills. cotton). We are committed to responding
to consumer taste, while also balancing
sustainability impacts.

13% NIKE continues to invest in research and

development efforts on textile-to-textile
recycling technologies with a goal of scaling
them in upcoming seasons. In addition, our ASI
increase of recycled includes points for a “Single Fiber Garment”,
polyester in Nike brand which is a look forward to post-consumer
apparel in FY18 recycling, rewarding our product teams who
are thinking this way now.

Measure
Greater than 80% of all NIKE
product will be scored on
sustainability performance

Performance
Product Scored on Sustainability
Performance (%)

FY15 / 27%

FY16 / 68%

FY17 / 71%

FY18 / 73% 46 p.p. (vs. FY15 baseline)

FY20 target

80%
NIKE’s Product Creation teams continue to
add new product areas to the scope of the
targets, to better measure our progress and
drive continued sustainability improvements in
all our products. In FY18, NIKE Apparel added
large volume product groups to the ASI scoring
process including Asia-Sized versions, NIKE
Direct Product, and Extended Size Range.

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Impact Appendix

Materials
Target
Increase use of more
70%
sustainable materials recycled manufacturing
waste in every Nike
Air Max 270 Air sole
Performance
% More Sustainable Materials

Apparel
Footwear

19%
31%
FY15

21%
33%
FY16

33% Our materials – where they come from and continued to increase the use of EPMs in our
32% how they are used – represent the biggest products, growing their usage alongside our
FY17 opportunity to reduce our environmental overall material usage. In Apparel, NIKE’s
footprint, which is why we place so much continued ramp-up of Better Cotton and
15 p.p. (vs. FY15 baseline) emphasis on this area. strategic conversions to recycled polyester
34% has led to a steady increase in sourcing of
31% The MSI provides our material and product sustainable materials. Footwear’s use of lower
FY18 0 p.p. (vs. FY15 baseline) teams with the information they need to choose impact materials, specifically recycled polyester
the best options from amongst 70,000 different in Flyknit footwear, remains constant.
FY20 target materials from more than 600 vendors. This
allows them to make better decisions around In FY18, some recycled materials were used in
Increase which materials are the most sustainable with 73% of Nike brand footwear and apparel styles.
the ultimate goal of driving our environmental While we grew the number of styles that used
footprint lower. recycled materials in FY18, the overall number
of styles also increased, leading to an overall
In FY18, our relative use of Environmentally decrease of 2 percentage points since FY17.
Preferred Materials (EPM) remained flat across
apparel and footwear, although it has done Cotton
so during a period of growth for our overall See our Cotton measure for detail on our move
material buys. This indicates that we have towards sourcing cotton more sustainably.

Better Choices Materials in scope: Footwear Apparel

Polyester Cotton Leather Synthetic EVA Rubber Thermoplastic

Recycled Organic Leather working leather Recycled Environmentally Polyurethane
Recycled group certified Recycled preferred rubber (TPU)
Environmentally formulations Recycled
BCI Better
preferred leather Grind
Cotton

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Materials

Recycling facility – Putian, China

Transforming Polyester to Lessen Our Impact with 60% recycled polyester content which Rubber
Polyester is a high-performance, comfortable quickly became NIKE’s highest volume By FY18, 92% of the rubber used in our
material. It is the number one material used performance fleece material used across products was environmentally preferred.
in our products by volume, and represents multiple programs. This increase is due to our increased use
approximately 32% of our overall carbon of environmentally preferred compounds,
footprint. Because of this, we are constantly Since 2010, NIKE has transformed more while slowly phasing out the less
looking for ways to reduce that impact through than 6.4 billion plastic bottles into recycled preferred compounds.
greater adoption of recycled polyester and polyester footwear and apparel. As a result,
other technologies. NIKE has been recognized as using the most Innovating New Super Materials – Flyleather
recycled polyester in the industry for the sixth For NIKE, leather is featured across many
As of FY18, 19% of the polyester used in our straight year by the Textile Exchange. iconic footwear styles – and it has the second-
products was recycled. All core Flyknit yarns highest environmental impact on the company’s
continue to be recycled polyester. Our global Learn more: carbon emissions. Flyleather can change that
football kits and NBA on-court and retail jerseys 2018 Preferred Fiber and Materials Market – a new super material made with at least 50%
and shorts are made with 100% recycled Report leather fiber introduced by NIKE in FY18.
polyester. We developed a new fleece fabric
During a typical leather manufacturing process,
up to 15% of a cow’s hide falls to the tannery
Top Five Materials by Volume (kg) floor, eventually going to landfill. To create
FY15 FY16 FY17 FY18
Flyleather, we combine those leather fibers
Cotton
with synthetic ones, using a process that fuses
Organic 4,123,000 (7%) 4,613,000 (7%) 5,622,000 (8%) 7,147,000 (8%)
everything into one material.
Recycled 68,000 (<1%) 75,000 (<1%) 183,000 (<1%) 375,000 (<1%)
BCI 9,879,000 (17%) 17,629,000 (27%) 32,487,000 (45%) 42,335,000 (50%)
Flyleather is lighter and more durable than
Total 59,058,000 64,416,000 72,195,000 85,514,000
traditional leather (based on abrasion testing)
Polyester
and creating it has a lower carbon footprint
Recycled 22,769,000 (16%) 25,481,000 (18%) 25,856,000 (17%) 29,429,000 (19%)
than traditional leather manufacturing.
Total 138,494,000 144,499,000 156,492,000 157,611,000
Furthermore, because Flyleather is delivered on
Corrugate/Paper
a roll rather than as an irregularly shaped hide,
Recycled 95,424,000 (84%) 103,977,000 (84%) 107,052,000 (84%) 129,087,000 (84%)
it improves cutting efficiency and creates less
waste than traditional full-grain leather.
Total 113,568,000 123,622,000 127,236,000 153,425,000
Rubber
In FY18, we included this new material in a
Environmentally Preferred 63,414,000 (89%) 59,460,000 (91%) 65,808,000 (98%) 68,543,000 (92%)47
limited release of the Nike Flyleather Tennis
Total 71,380,000 65,382,000 67,382,000 74,379,000
Classic SE. As we think about the future,
Ethylene-Vinyl Acetate (EVA) Foam
Flyleather becomes an answer to retaining the
Recycled 185,000 (<1%) 151,000 (<1%) 66,000 (<1%) 158,000 (<1%)
qualities intrinsic to some of NIKE’s greatest
Total 81,221,000 97,214,000 103,182,000 97,001,000
icons (i.e., Air Force 1 and Air Jordan 1) with
47 Decline due to shifts in model mix.
an EPM.

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Impact Appendix

Materials
Measure overall environmental footprint by developing Over 90% of our cotton is used by three
more sustainable cotton options that promote product groups: Nike brand apparel, socks, and
Source 100% of our cotton more not only better water stewardship, but pesticide Converse footwear. In FY18, Nike brand apparel
sustainably (certified organic, reduction and fairer labor practices. led the company by sustainably sourcing 68%
of its cotton, with Converse-branded apparel
Better Cotton Initiative, or NIKE is a leader in advancing better approaches  close behind at 67%.
recycled) across NIKE by the to cotton. Since 1998, we’ve been blending
end of calendar year 2020 organic cotton into our cotton products, and We blend a minimum of 10% organic cotton
in 2002, we co-founded Organic Exchange into nearly every Nike brand apparel cotton
(now Textile Exchange) to drive industry fabric, a strategy that has made us one of
Performance transformation in preferred fibers, integrity and the top four buyers of certified organic cotton
Cotton Sourced More Sustainably (%) standards, and responsible supply networks. globally according to Textile Exchange’s (TE)
2018 Preferred Fibers and Materials Report.
Cotton Type Used in FY18 We also rank fifth in Better Cotton sourced
FY15 / 24% (per BCI’s report on 2017 calendar year).

50% BCI Currently we rank third in volume of recycled

FY16 / 35% cotton (TE) but aim to grow this much further.
42% Conventional
We strive to continuously innovate so we can
8% Organic scale our cotton recycling and close the loop on
FY17 / 53%
<1% Recycled textile waste.

FY18 / 58% 34 p.p. (vs. FY15 baseline) Looking ahead, we believe that converting
the final 20% of our cotton supply chain will
FY20 target

100 %
be the most difficult. We also need to further
In 2011, we made the commitment to ensure address water risk by collaborating beyond the
that, by 2020, 100% of our cotton is sourced standards and our 2020 target. We aim to be a
more sustainably – certified organic, Better leader by using our influence and reach to drive
Leading in Advancing Better Cotton (BCI), or recycled cotton. In FY18, we
Approaches to Cotton the cotton industry toward sustainability and
sourced over 58% more sustainable cotton, helping others on their journeys.
As one of our top-volume materials, cotton saving more than 32 billion liters of water and
represents more than one-half of our water 111,000 kilograms of pesticides. The biggest
footprint, consumed mostly during the NIKE Women Sportwear popular Leg-A-See
challenge is growing our sustainable cotton and Gym Vintage collections feature both
agricultural phase. In addition, 78% of global sourcing at a faster rate than our overall cotton
cotton farming water footprint is in high to organic cotton and recycled polyester in their
consumption – which grew about 20% in FY18, fabric blends.
extremely-high water stress areas. We believe driven by increased consumer preference for
we can create the most positive impact on our cotton-rich products like fleece and tee shirts.

FY18 External Engagements

Global Fashion Agenda 2020 Circular

Fashion System Commitment
NIKE joined other leading brands in
calling on fashion brands and retailers to
accelerate the transition to a circular fashion
system to urgently work towards creating a
sustainable future.

Sustainable Cotton Challenge

This initiative brings together leading industry
brands, retailers, and textile companies
to champion the greater use of more
sustainable cotton in marketplaces globally.

NIKE Flyknit and Vapor Max Air sole

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Impact Appendix

Energy and Carbon

Renewable Energy in NIKE
Owned or Operated Facilities
In 2015, NIKE joined RE100, a coalition of
businesses that have pledged to source 100%
renewable energy in their operations. As a
Fortune 100 company, we have an opportunity
to drive increased renewable energy production
and access globally.

Learn more:
RE100

We currently have two agreements in the

U.S. that together are expected to produce
roughly 460,000 MWh/year of wind energy
and deliver on more than one-half of our
global commitment. One powers NIKE’s World
Headquarters in Oregon with wind power
from three farms in the nearby Columbia
River Gorge. NIKE also powers our European
Logistics Campus (ELC) in Laakdal, Belgium,
with 100% renewable energy through five
European Logistics Center – Laakdal, Belgium sources (onsite wind, solar, geothermal, and
locally produced biomass and hydro). More
than 30% of the electricity consumed at our
Target NIKE exists to serve athletes. Climate issues,
like pollution and extreme weather conditions, China Logistics Center in Taicang, China, is
generated through rooftop solar.
Reach 100% renewable affect how athletes perform. And as a global
business, climate change introduces risk across
energy in owned or our value chain. At our ELC, our six windmills have been an
example of our commitment to sustainability
operated facilities through We’re tackling climate change head-on by since 2005. In FY18, we took a step to have
more control over our own power supply and
FY25 and encourage investing in lower-carbon materials and
renewable energy and building resilience improve efficiencies while lowering costs.
broader adoption, as part to climate uncertainty by reducing costs, Electricity generated from the windmills now
feeds directly into our facility. This step helps
innovating new operating models, and
of our effort to control strengthening our supply chain. open the door to new approaches, including
energy storage and potential future conversion
absolute emissions While this target focuses specifically on to other energy sources.
renewable energy, we’re working to reduce our
In FY18, we began pursuing options to procure
Performance carbon footprint in several ways:
renewable energy for all of our European
Renewable Energy – Owned or Operated (%)
1. Innovating low-impact materials operations that, when operational, will help to
bring us to 75% of our global commitment.
In addition, we continued to advance efforts
FY15 / 14% 2. Driving energy efficiency within our
supply chain for onsite solar at several NIKE-leased
distribution centers globally and furthered our
FY16 / 20% 3. Increasing renewable energy throughout our understanding of renewable energy options in
operations and supply chain the Asia Pacific and Greater China geographies.

FY17 / 22% 4. Working with other organizations (i.e. As we pursue coverage for the rest of our
corporate peers, government, NGOs, global operations, we see challenges in finding
manufacturing partners) to scale impact solutions that fit all our guiding principles
FY18 / 19%48 5 p.p. (vs. FY15 baseline) including cost, risk, proximity, and additionality.
and create better market conditions for
FY25 target We understand the need for urgent action
100 %
clean energy
and are working with other leading brands
and governments to advance renewable
energy globally.
48 Slight decline in FY18 is due to the delay between buildings going live
and the period of time required before the electricity meters can be
incorporated into the Oregon Power Purchase Agreement.

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Energy and Carbon

Factory Adoption of Renewables
in the Supply Chain
A comprehensive focus on energy management
and carbon emissions reduction, including
scaling renewable energy, has been a priority
for NIKE and its factory partners for more than
a decade. NIKE works with suppliers to identify,
design, and execute strategies for unlocking
competitive renewable energy opportunities in
strategic manufacturing markets globally.

A top priority for NIKE has been accelerating

the adoption of onsite rooftop solar
photovoltaic (PV) projects by supply partners.
The technology for rooftop solar PV is both
proven and widely available with fewer policy European Logistics Center – Laakdal, Belgium

hurdles to overcome for implementation. By the

end of FY18, seven footwear factories in China Total Renewable Energy (MWh)
had installed solar PV systems to account for
FY15 FY16 FY17 FY18
as much as 10% of their total energy use. NIKE
FW Manufacturing and Textile Dyeing and Finishing
also kicked off a joint solar PV procurement
Total MWh 550,000 571,000 602,000 621,000
initiative in FY18 with all of our contracted
% of total 14 13 13 14
footwear and vertically integrated apparel
Owned or Operated
factories in China and Vietnam.
Total MWh 66,798 108,761 125,339 117,207
% of total 14 20 22 19
Onsite solar PV projects have typically covered
approximately 20% of electricity demand for our
contract manufacturers. To cover the remaining FY18 Renewable Energy
portion, NIKE is also working with them to
identify competitive commercial renewable
contracts or cost-effective utility-scale projects.
Through FY18, four factories have signed direct
117,207 MWh49
power purchase agreements (PPAs) for grid-
delivered renewable electricity in Brazil, Turkey,
and India. RECs (DC) Power Purchase Agreement
967 72,416
Expanding renewable energy use in key Asian Hydroelectric Avangrid OR wind PPA
manufacturing regions has proven challenging
due to rapidly evolving conditions and regulatory 6,729 By Type (MWh)
Biomass
environments. NIKE is partnering on several
collective action initiatives in these markets with 7,635
key stakeholders from government, industry Solar Onsite (DC)
and civil society to help catalyze change. For 20,023 4,814
example, in FY18 NIKE continued to support Wind Wind
USAID’s Vietnam Low Emission Energy Program
aimed at accelerating clean energy development 4,624
Solar
in Vietnam. In the area of public policy for
example, NIKE is working together with the
Vietnamese government and stakeholders on
legislation advocacy to grow NIKE renewable
energy via improved local regulations. 42,747 72,416
Belguim U.S.
By Country (MWh)
2,045
China

49 Reported breakdowns may slightly exceed the total due to rounding.

FY18 NIKE Impact Report 42

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Impact Appendix

Energy and Carbon

In parallel, we implemented or expanded
alternative modes of transportation, including
international trucking, international rail, and sea-
air (freight transport that is part-ocean, part-air,
which is faster than all-ocean and less carbon-
intensive than all-air transport).

FY18 was the second year we used our Supply

Chain Sustainability Index (SCSI) with our
inbound ocean freight and air freight providers.
We saw positive improvement from logistics
service providers from FY17 to FY18. Driving
Product leaving NIKE European Logistics
Center – Laakdal, Belgium our logistics service providers to meet and
surpass minimum sustainability requirements
has led them to fully integrate sustainability
Measure In FY18, NIKE’s energy and carbon intensity
into how they deliver and operate. The SCSI
in key operations decreased compared to
has also helped us elevate discussions with
Decrease energy use and the FY15 baseline due to the increased
providers on innovative offerings currently
CO2e emissions 25% per unit effectiveness of our energy management at
available and on the roadmap for the future.
owned and operated facilities, boiler elimination
in key operations (inbound and and electric motors upgrades in our focus
outbound logistics, distribution Outbound Logistics
footwear contract manufacturers, and a
Outbound logistics (transportation from a NIKE
centers, headquarter locations, reduction of air freight in our inbound logistics.
distribution center to point of sale or consumer)
Even though we are moving in a positive
finished goods manufacturing, direction, we are currently facing significant
continues to be challenging for sustainability
and NIKE-owned retail) due to continued strong e-commerce growth
headwinds to meet our target. The root causes
and evolving consumer trends. In a marketplace
for this trend include challenges to scaling
demanding speed, we are looking for creative
new technologies that would offer enhanced
alternatives to deliver in ways that are not at
Performance energy savings, an increasing volume of high-
the expense of our sustainability goals. For
Energy Consumption Per Unit – Key Operations performance footwear styles that require more
example, we are working to understand the
(kWhe/unit) energy to manufacture, and a considerable
value of sustainable fulfillment services to
increase in the carbon intensity of Vietnam’s
our consumer. We can then begin to curate
-7% (vs. FY15 baseline) electricity grid due to new coal power plants
experiences our consumers want that include
brought online.
6.0 their values on sustainability.
Inbound Logistics One initiative implemented in North America,
5.0 The most significant driver of carbon emissions
4.39 and expanding across regions, is the switch
4.29 for logistics continues to be shipping product
4.74 4.74 to shipping e-commerce apparel orders in
from origin to destination by air. On the
FY20 target envelopes, which are significantly lighter and

25%
4.0 inbound leg (origin to destination geography),
take up less space in transportation than boxes.
air freight is 25 times more carbon intensive
For apparel shipments that are switched to
than ocean freight.
envelopes, the estimated carbon savings per
FY15 FY16 FY17 FY18 unit is at least 50%.
As part of our efforts to optimize air freight
and help ensure decisions are demand-driven,
Carbon Emissions Per Unit – Key Operations We are also working with our logistics service
in FY18 cross-functional teams completed a
(kg CO2e/unit) providers to elevate their sustainable service
robust review of the current processes and
offerings. One way we have done this is by
tools. Through this work, teams identified
-2% (vs. FY15 baseline) deploying our SCSI for outbound logistics
key metrics, tools, operating models, and
1.8 services. As with inbound transportation, the
communications needed to support demand-
1.75 1.75 1.71 SCSI establishes clear minimum sustainability
driven decision-making. With the new process,
requirements and drives innovation discussions.
we are now using signals from the marketplace
1.6
1.62 Through partnering with our providers, we have
as we near the start of a season to gain clarity
begun taking advantage of available alternative
on when product is needed. This helps to ensure
FY20 target
fuels for transportation in Europe and China.
that we use air freight only when necessary.
25%
1.4

FY15 FY16 FY17 FY18

FY18 NIKE Impact Report 43

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Impact Appendix

Energy and Carbon

Distribution Centers Contract Manufacturing: Footwear the Electric Motors Management Program
Energy use in our distribution centers is As part of our comprehensive energy and to our contracted factories. This encourages
trending higher than our target, with energy carbon emissions reduction program across the factories to retrofit existing electric motors to
used per shipped unit up approximately 26% supply chain, we have engaged our footwear more efficient motors. An important additional
from our FY15 baseline. A continuing factor finished good factories to either eliminate or feature is the setup of the management process
is that more extreme temperatures across optimize centralized boiler systems. In FY18, that uses a detailed inventory to promote
seasons have increased air conditioning and more than 90% of these factories successfully and enable tracking use and sourcing further
heating requirements. In FY18, work to make improved their boiler systems, creating an savings. As more of our contract manufacturers
our distribution centers more energy efficient average energy saving of between 15 to 20% implement the program, we expect to
included the ongoing retrofitting of buildings for factories in Asia. As part of the initiative, in see reductions in energy use in footwear
to LED lighting and roof renovations, which FY18 the last footwear finished goods factory manufacturing as well as dyeing and finishing.
increases insulation. successfully converted its coal-fired boiler
system to use sustainably-sourced, renewable As carbon emissions are directly related to
At our China Logistics Center, alternative, biomass – marking the end of coal use in any of energy use, any improvements in energy
innovative solutions include tubular sky NIKE’s footwear focus factories. management or shifts to renewable energy
lighting, which channels daylight along its would equate to reductions in carbon
tunnel to bring the light inside, and solar- NIKE’s footwear modernization teams emissions. In FY18, the carbon intensity of
powered charging stations, which have seating have rolled out several new technologies Vietnam’s grid electricity increased significantly,
areas for employees equipped with solar film offering energy reductions, including an which directly impacted NIKE’s footwear focus
attachments linked to USB chargers. improved midsole manufacturing process, factories’ carbon footprint. By implementing
a new assembly oven, and material cutting NIKE’s energy and carbon reduction programs,
During FY18, we opened a new reverse technologies that have reduced energy use these factories partially mitigated the carbon
logistics distribution center in North by approximately 5%. While we expected footprint impacts of new coal-fired power plants
America (approximately 1.1 million square the savings to be higher, the failure to scale brought online. NIKE will continue to work with
feet), which received U.S. Green Building technologies that offer enhanced energy contract manufacturers on renewable energy
Council LEED (Leadership in Energy and savings offset some of our gains. To drive initiatives as well as work through collaborative
Environmental Design) Gold certification further energy reductions in footwear action within our industry to promote
for commercial interiors. manufacturing, in 2018, NIKE officially launched renewable energy.

90%
of focus footwear factories
successfully improved their
boiler systems in FY18

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Impact Appendix

Energy and Carbon

For the first time, NIKE Fuel Consumption (MWh) and Scope 1 Emissions (Metric Tonnes CO2e) by Business Division
has externally verified its FY15 FY16 FY17 FY18

Scope 1 and 2 emissions and Fuel

Consumed Scope 1
Fuel
Consumed Scope 1
Fuel
Consumed Scope 1
Fuel
Consumed Scope 1
Scope 3 commercial air travel Air MI 580 125 525 114 679 145 2,39950 496

emissions. Car Emissions 1,616 406 2,130 535 2,653 666 2,496 627
Corporate Jets 12,411 3,576 16,972 4,392 13,105 3,391 14,586 3,773

Learn more: Distribution Centers 40,970 8,084 34,026 6,698 39,872 7,861 52,377 10,048

PwC Assurance Report HQs 22,292 4,448 28,379 5,678 33,859 6,794 30,955 6,213

NIKE, Inc. Management Assertion Other Offices and

27,456 5,561 29,347 5,945 31,471 6,375 23,513 4,763
Building Construction
Retail 66,269 13,423 68,935 13,963 73,593 14,907 79,098 16,022
Total: NIKE, Inc. 171,595 35,623 180,314 37,325 195,232 40,139 205,421 41,94251

Headquarter Facilities Electricity Consumption (MWh) and Scope 2 Emissions (Metric Tonnes CO2e) by Business Division
At our Global HQs we continue to focus on FY15 FY16 FY17 FY18
implementing our 100% renewable energy Electricity
commitment and reducing energy usage Air MI
through the following programs: Grid Electricity 39,121 40,647 50,249 66,50850
Distribution Centers
• W
 orkspace optimization by reviewing the Grid Electricity 128,408 153,671 165,004 165,422
amount of new office space needed to fuel Onsite Solar 1,639 1,467 3,530 4,623
NIKE’s growth versus historic square footage Onsite Wind - - - 4,814
requirements while enhancing the employee HQs
workplace experience Grid Electricity 77,437 86,001 89,359 95,681
Onsite Solar 81 7 - -
• E
 nergy efficient building standards for new Other Offices and Building Construction
construction globally Grid Electricity 52,113 54,557 56,907 53,487
Retail
• HVAC and other equipment upgrades to high Grid Electricity 185,280 199,352 209,300 216,982
efficiency models Steam 1,007 614 865 764
Total: NIKE 485,087 536,316 575,213 608,282
• L
 ED lighting retrofits and maximizing natural Grid Electricity 482,359 534,229 570,818 598,081
light for new and renovated spaces Onsite Solar 1,721 1,474 3,530 4,623
Onsite Wind - - - 4,814
• HVAC SMART controls or other mechanisms Steam 1,007 614 865 764
to manage energy in occupied vs. Scope 2 Emissions
unoccupied spaces Air MI
Location-Based 25,792 25,028 33,737 34,492
In FY18, we completed the newly constructed Market-Based 18,099 14,873 18,156 36,781
Sebastian Coe and Coach K buildings at our Distribution Centers
World Headquarters. The Coach K building Location-Based 66,426 79,381 82,971 77,899
has been awarded LEED Platinum certification Market-Based 58,152 67,752 61,084 55,257
and the Sebastian Coe building is on track HQs
for certification. In addition, at our World Location-Based 33,457 31,481 39,176 33,235
Headquarters all HVAC and other equipment
Market-Based 27,038 15,935 14,577 14,317
replacements were upgraded to high
Other Offices and Building Construction
efficiency models.
Location-Based 27,046 26,795 28,158 20,170
Market-Based 27,238 27,254 27,280 19,908
At our Greater China Headquarters, the team
Retail
implemented air conditioning controls to reduce
Location-Based 97,772 99,670 103,215 93,307
air conditioning of unoccupied spaces. A facility
Market-Based 98,154 99,959 103,393 91,978
operations strategy which leverages weather
Total: NIKE, Inc.
forecasts to adjust morning cooldown scheduling
Location-Based 250,493 262,354 287,256 259,10351
has reduced air conditioning electricity
Market-Based 228,680 225,772 224,489 218,24051
consumption. And at our Hurley Headquarters,
50 Growth in FY18 energy consumption due to expansion of an existing Air MI facility and opening of an additional Air MI facility. Before the expansion, natural
we completed an LED lighting retrofit. gas was only used to heat a small section of the Beaverton Air MI facility. With the expansion, additional equipment was installed, some of which consumes
natural gas.
51 This metric is part of Management’s Assertion on select sustainability metrics, which PwC has performed limited assurance over for the period from June 1, 2017
to May 31, 2018, as indicated in the Report of Independent Accountants.

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Energy and Carbon

Nike Direct Stores Energy Consumption Outside of the Organization (MWh)
NIKE Direct saw reductions in energy FY15 FY16 FY17 FY18
consumption per square foot due to investments Inbound Logistics 2,355,055 1,878,244 2,521,478 2,252,525
in LEED stores and energy efficiency projects Outbound Logistics 250,606 273,722 275,661 279,127
such as HVAC and lighting upgrades. Energy FW Manufacturing 2,154,045 2,209,104 2,226,619 2,205,108
management systems (EMS) provide centralized AP Manufacturing (Estimated) 283,000 292,000 311,000 329,000
control and automation of HVAC and electrical EQ Manufacturing (Estimated) 205,000 206,000 176,000 186,000
systems. NIKE Direct has EMS installed in Textile Dyeing and Finishing 1,800,730 2,100,084 2,313,869 2,304,448
all U.S. and most Canadian stores and is
developing strategies to pilot these systems in Scope 3 Emissions (metric tonnes CO2e)
new markets across the globe.
FY15 FY16 FY17 FY18
Inbound Logistics 599,788 478,475 642,287 573,890
Outbound Logistics 66,379 72,465 73,080 74,017
FW Manufacturing 962,300 986,749 1,041,646 1,138,282
AP Manufacturing (Estimated) 176,000 181,000 193,000 205,000
EQ Manufacturing (Estimated) 114,000 114,000 98,000 103,000
Textile Dyeing and Finishing 542,089 635,676 703,731 693,518

Measure NIKE continues to see significant improvements

in energy use from dyeing and finishing facilities.
Decrease energy use and CO2e
emissions 35% per kg in textile During FY18, we identified our top 10 dyeing
and finishing materials suppliers, and we
dyeing and finishing processes analyzed efficiency projects at those suppliers
to help drive improvements. As part of this
Performance work, we developed an energy deployment plan
Energy Consumption Per kg – that highlights projects that each vendor can
Textile Dyeing and Finishing (kWhe/kg) use to meet energy targets. Specifically, NIKE
encourages factories to optimize their thermal
9.2% (vs. FY15 baseline) systems by eliminating steam leaks, maintaining
16
proper steam traps, using condensate recovery,
15.86 and optimizing their boiler efficiency.
15.46
The NIKE Shanghai House of Innovation 14.95
is LEED certified gold – Shanghai, China
13 14.40 We also conducted an energy assessment
of one of our largest contract manufacturing
FY18 External Engagements FY20 target
factory’s dyeing and finishing materials facilities.

35%
10 This analysis identified future potential for 23%
 regon Business for Climate
O further energy reductions. We used insights from
The Oregon Business Alliance for Climate is this assessment to develop training materials
a statewide initiative focused on mobilizing FY15 FY16 FY17 FY18 for the textile dyeing and finishing industry to
industry support and business leadership encourage energy reductions at scale.
towards advancing climate policy and
instituting a price on carbon emissions while Carbon Emissions Per kg –
investing in Oregon’s clean economy. Textile Dyeing and Finishing (kg CO2e/kg)

 cience Based Target Initiative

S 9.4% (vs. FY15 baseline)
We are setting ambitious emissions reduction 5.5
targets through the Science Based Targets 4.78 4.68
Initiative, a relationship between Climate 4.55
4.33
Disclosure Project, World Resources Institute 4.5
(WRI), World Wildlife Fund, and the UN
Global Compact. Participating businesses
FY20 target

35%
make commitments to set science-based 3.5
targets and then have two years to submit
their targets for validation by the initiative’s
team of experts. FY15 FY16 FY17 FY18

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Waste
We Imagine a World
Where There is No Waste
We have an exciting opportunity to transform
everything around the design solution,
how we source, how we make, how the
product’s used, how it’s returned, and how
it’s ultimately reimagined – and to solve
problems holistically. Achieving a circular
future is a collective effort and we’re working
with partners like the Ellen MacArthur
Foundation to explore new approaches
to unlocking the circular economy for our
industry. In FY18, we also joined the Global
Fashion Agenda 2020 Circular Fashion
System Commitment which calls on fashion
brands and retailers to accelerate the
transition to a circular fashion system.
Brillia Running Stadium walkway for paralympic track surface made from Mondo Super X with a Nike Grind backing – Tokyo, Japan

Target NIKE is pushing the boundaries of the circular In addition, we are exploring new and better
economy – from reducing waste generation uses of factory scrap through the expansion
Eliminate footwear wherever possible to transforming remaining
waste into value. Our focus is on diverting
of the Nike Grind program and the NIKE Open
Innovation Challenge, which launched with
manufacturing waste to waste from landfill or incineration52 by reducing a focus on developing higher value recycling
waste generation, increasing recycling, and markets for manufacturing materials currently
landfill or incineration, converting waste that can’t be recycled into going to energy recovery. To enable this, we are
while continuing to reduce energy. It doesn’t just make sense for the
planet, it makes business sense too. NIKE
also working to improve scrap quality control,
inventory data, processing infrastructure,
overall waste recognizes that the amount of materials that supply chain operational efficiency, and cost
we extract and refine increases our carbon competitiveness.
emissions, water use, and chemical footprint.
Performance Nike Grind
Waste to Landfill – Footwear Manufacturing (%) By the fourth quarter of FY18, 99.9% of Driven by the belief that “waste” is simply
our footwear finished goods manufacturing excess materials in the wrong person’s hands,
waste was recycled or converted to energy53. the Nike Grind program is a platform to recycle
FY16 / 6.6%
Additionally, 100% of in-scope footwear athletic footwear and surplus manufacturing
finished goods manufacturing factories fully scrap into performance products. Internally,
FY17 / 3.9% implemented the Waste Minimum Program, we upcycle Nike Grind materials back in NIKE
which sets expectations for: performance footwear and apparel. Externally,
NIKE has recovered and supplied Nike Grind
FY18 / 1.8% 4.8 p.p. (vs. FY15 baseline) • Waste management commitment materials – such as rubber and foam – to sports
FY20 target
surface manufacturers since 1992, which

0%
• A
 hierarchy of waste where disposal have been incorporated into more than
is a last resort 1 billion square feet of running tracks, gym
floors, and other surfaces worldwide.
 eparation and handling of waste
• S
for recycling

• Data collection and reporting for accountability

52 Incineration without energy recovery.

53 Waste to energy refers to a method of converting waste and non-recyclable materials into electricity, heat, or fuel. Methods include combustion, gasification, pyrolysis, anaerobic digestion, and cement kiln co-processing. Using waste as energy
reduces the need for virgin fossil fuel energy sources such as coal. Facilities are equipped to burn at EU level standards to protect air quality.

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Waste
Footwear Waste Volumes (Lbs) by Measure We’ve made some progress in waste reduction
at our HQs, due in large part to a durable
Nike Grind Program54
FY16 FY17 FY18 Reduce waste index by 10%, dishware program introduced in 2017 at NIKE’s
Factory Waste 9,336,826 11,257,883 9,374,920 covering footwear manufacturing, World Headquarters (WHQ) that replaces
Post-Consumer55 587,810 1,356,021 1,196,390 single-use plastic alternatives. And while this
distribution centers, and is good progress, we continue to review ways
54 Measured in pounds of Nike Grind for use in sports and other
flooring surfaces. headquarter locations to address other complex factors in footwear
55 Post-consumer includes waste from distribution centers, Reuse-A-Shoe
program, defective samples, and returns.
manufacturing that make waste reduction
challenging, including more complicated
Performance designs that can increase defect rates, new
NIKE’s premium materials are made with Waste Index – FW Manufacturing, Distribution
athletes in mind. By recycling those materials production shifting to factory locations that
Centers (DCs), and Headquarters (HQs)
into Nike Grind sports surfaces, we continue to have less experience managing waste efficiency
support the athlete in all of us. This year, NIKE 3% (vs. FY15 baseline)
programs, and an overall tension between
worked with Olympic marathoner Joan Benoit innovation and speed-to-consumer versus
105 material efficiency. For DCs, we have seen
Samuelson and the community of Freeport, ME
100 103 customer orders trend away from full-case
to install a new competition level track and field
using Nike Grind at the local high school. cartons, driving the need to debox inbound
100 100
factory cartons in our distribution centers,
98 resulting in additional waste.
Looking to the future, NIKE is exploring
new, non-sport uses for Nike Grind through FY20 target

10%
95
relationships across the automotive, furniture, NIKE’s cross-functional Material Efficiency
technology, and built-environment industries. Team has identified and is driving a portfolio
In April, Nike Grind launched the Design with FY15 FY16 FY17 FY18 of manufacturing waste reduction initiatives
Grind Open Innovation Challenge, calling upon intended to mitigate the increase in
designers, engineers, and scientists to create manufacturing waste. Through data analysis
new products using Nike Grind materials. NIKE is actively working towards reducing and engagement of suppliers and key NIKE
After receiving over creative 600 creative waste from footwear manufacturing, DCs, stakeholders, broad agreement has been
submissions from 50 countries, we selected and HQs. While HQ are on track with waste reached on the most significant drivers of
five winners and are now supporting them to reduction efforts, footwear manufacturing and increased manufacturing waste. This is
develop scalable, beautiful products made with DCs, are experiencing challenges which are informing development of additional initiatives
Nike Grind. offsetting our gains, making the overall measure and 2025 waste reduction targets.
increase by 3% versus the FY15 baseline.
From Apparel to Acoustic Panels –
Distribution Centers
Corrugated cardboard cartons are the biggest
source of waste at our DCs, accounting for
about 85% of DC waste. Cardboard waste
generation continues to grow because of
changing customer order profiles to greater
variety of products and/or smaller orders at any
given time. This, in turn, means that our DCs
must debox cartons delivered from our factories
and repackage products into more customized
orders, a process that inherently creates
more waste.

The most impactful initiative that we can

implement within our DCs to mitigate
increasing waste generation is the Re-Use-
A-Box program which focuses on reusing the
deboxed corrugated cardboard carton waste
on outbound shipments. Several of our DCs
worked on optimizing their Re-Use-A-Box
program during FY18.

Yogo – NIKE Circular Innovation Challenge Top Idea Grand Prize

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Waste
More than half of the soles of NIKE shoes
are made using a process in which rubber or
plastic-based material is injected into a mold
– through channels – and formed into parts.
When this process is completed, the parts are
removed and there is leftover material in the
channels. Some material also gets pushed
out the sides of the mold. These sources
of waste account for 18% of total footwear
waste. In FY18, we rolled out guidelines
for designing injection molds in a way that
minimizes the volume of the injection channels
and associated waste. These guidelines will
be applied when new molds are designed.
This is expected to reduce waste from 500,000

1.2m kg
to 1 million kilograms per year and save more
than $1 million starting in FY19.

Unfortunately, efforts such as those outlined

of material saved above were offset by unexpected new sources
through investment in of waste, with the net result that footwear
new cutting machines by manufacturing waste per-unit increased. We
contract footwear factories analyzed the root causes of this and found
broad agreement within NIKE and across our
suppliers on the most significant drivers. Some
of these include new product innovations that
Looking ahead, we are actively piloting NIKE programs such as the expansion of have yet to be fully optimized in manufacturing,
alternative packaging solutions, such as reusable dishware, food waste optimization more complex designs leading to higher
reusable shipping totes. We are also exploring and diversion programs, and water machines at defects, production shifts to regional locations
and implementing proof of concepts with end- headquarters have contributed to decreases. with less mature waste avoidance programs,
of-life product. One example of this is at our and misaligned incentives for mitigating waste.
European Logistics Campus, which repurposed For food waste optimization, Nike Food
end-of-life apparel into acoustic panels used in Services partners with Beaverton-based We have begun to attack some of these root
office conference rooms. software Leanpath to closely monitor daily food causes working cross-functionally and with
production and waste levels at our WHQ. By our factory partners. However, achieving this
Keeping Waste out of Landfills – HQs using Leanpath’s smart meters to measure and 2020 waste target is likely out of reach, so we
At our HQs globally we continue to focus first analyze cafe food waste, culinary teams use are focused on getting footwear manufacturing
on eliminating waste from our operations and real-time data to alter their recipes for efficiency, waste per-unit back down to, and driving
then second on diverting waste from landfill. to make leaner purchasing decisions, and to below, the FY16 baseline. Key focus areas
Our primary sources of waste are driven ultimately reduce food waste levels at their in the next year will be reducing bottom
by onsite food and catering services and locations. As a result, we were able to keep a component defects through better tracking
include coffee cups, grab ’n go food/beverage total of over 36,000 kgs of food waste out of and troubleshooting and reducing inbound
containers, and waste from food storage. landfills in FY18. materials packaging by switching some single-
We continue to focus on waste elimination use cardboard boxes to reusable totes.
through the following programs: Contract Manufacturing: Footwear
Cutting scraps from upper materials such as Looking forward, we recognize that we need to
• Reusable dishware and coffee cup program textiles, leather, synthetic leather, and foams improve the effectiveness of efforts to design
accounts for about 40% of NIKE’s footwear waste out of products to truly achieve global
• O
 ptimizing food production for campus manufacturing waste. One driver of this waste and long-lasting change. We also need to
demand to reduce food waste is the gap between cut parts. Modern cutting incentivize manufacturing factories to focus on
equipment can achieve smaller gaps between the sources of waste that they can influence.
• D
 irect line water machines throughout parts than traditional die cutting can. In For instance, midsole and outsole waste
campus encouraging refill of reusable collaboration with our factory partners, nearly accounts for two-thirds of the increase in global
water bottles 700 state-of-the-art cutting machines were waste generation FY16 to FY18. We know that
deployed to 48 factories, saving nearly 1.2 by focusing on better management of molds
Because of its size, waste reductions for global million kilograms of material with an estimated and overall operational and process excellence,
headquarter facilities are driven by our WHQ, value of $12 million in FY18. factories can reduce this waste.
which saw nearly a 10% decrease in waste
per occupant versus the FY15 baseline.

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Waste
Reuse-a-Shoe Facility – Memphis, Tennessee USA
Waste (metric tonnes)
FY15 FY16 FY17 FY18
Distribution Centers
Landfilled 2,719 3,117 3,270 3,507
Recycled 29,391 29,593 32,687 34,183
Composted 247 274 197 219
Waste to Energy Incineration 560 715 1,022 1,040
Total DC Waste 32,917 33,699 37,176 38,949
HQs
Landfilled 1,626 1,816 1,807 2,105
Recycled 2,063 1,708 1,927 2,325
Composted 707 1,042 1,157 868
Total HQs Waste 4,396 4,566 4,891 5,298
FW Manufacturing56
Reused and Recycled - 49,800 48,055 45,887
Energy Recovery - 30,356 38,335 45,389
Landfilled and Incinerated - 5,639 3,550 1,702
Total FW MFG Waste - 85,794 89,941 92,979

56 FW manufacturing waste baseline is FY16.

Measure can’t be recycled. In locations where recycling Though some smaller programs have helped
and composting infrastructure is non-existent diversion rates in our HQs globally, a change
Increase landfill diversion for particular waste streams, some DCs are in the municipal composting program at WHQ
at distribution centers and exploring alternative options for waste disposal, has eliminated non-food waste materials from
as well as material substitution. compost streams. Since WHQ account for
headquarter locations approximately 80% of the total HQs facility
Seeking New Opportunities to waste, this has negatively influenced our overall
Performance Reduce Waste – Distribution Centers diversion rates. However, Hurley HQ saw an
Landfill Diversion DCs and HQs (%) The waste diverted from landfills by our DCs increase in landfill diversion due to increased
has remained fairly constant since the FY15 focus on employee engagement programs to
baseline at 91%. promote recycling. The remaining campuses
FY15 / 88% have consistent diversion rates due to limited
Our European Logistics Campus, as well waste diversion opportunities in local markets.
as Japan and Converse Ontario distribution
FY16 / 87% centers, all continued to have 100% We continue to implement and explore viable
landfill diversion. options to improve diversion rates at our
HQs, including:
FY17 / 88%
At five of our largest North America distribution
centers in Memphis, Tennessee, we worked • Kitchens, cafes, and breakrooms have well-
FY18 / 87% 1 p.p. (vs. FY15 baseline) with an independent third-party to conduct marked compost bins
a comprehensive waste audit. The objective
FY20 target
was to have an in depth understanding of • Construction projects have waste diversion
our waste components to reduce overall features such as well-marked recycling bins
Increase waste and minimize, if not eliminate, sending and construction waste reduction policies
waste to landfill. In FY19, we will prioritize the
Despite NIKE’s effort to reduce overall opportunities identified during the audits and • A focus on reducing the amount of printing
waste, DCs and HQs are facing challenges develop a roadmap for implementation. – including quarterly employee engagement.
in increasing landfill diversion rates, leading Converse has experienced over a 30%
to 1 p.p. decrease from the FY15 baseline. Headquarter Facilities reduction in printing due to this program
One factor was a change in the municipal We continue to focus on waste diversion
composting program at WHQ that eliminated through the following programs:
non-food waste materials from compost
streams, ultimately directing compostable 1. Composting food waste from campus services
cups to landfills. In addition, headcount has
gone up, which led to an increase in cafeteria 2. Recycling for paper/corrugate, glass,
and recycling waste that once contaminated plastic, and miscellaneous streams such
as construction waste

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Water
Target
Innovate and adopt new
approaches to reduce
water use in our supply
chain, with a 20%
reduction in freshwater
use in textile dyeing
and finishing per unit
of production
Performance
Freshwater Use Per Kg – Textile
Dyeing and Finishing (L/kg)

14% (vs. FY16 baseline)

135
126.5

120
117.2 109.3

FY20 target

20%
105

FY16 FY17 FY18 NIKE employees at T-shirt dyeing workshop – WHQ, Beaverton, Oregon

At NIKE, we take a whole-facility approach57 By the end of FY18, we were 68% of the investing in manufacturing efficiency, they
to water sustainability, meaning that when we way to our FY20 target. Our key material realized a 70% reduction in their freshwater
reduce our water footprint, we help to reduce vendors saved a cumulative 8.7 billion liters withdrawals by the end of FY18 from their FY16
the facility’s overall impact on the surrounding of freshwater from our FY16 baseline, of baseline and became NIKE’s third most water-
watersheds. We work with 38 material vendor which 2.5 billion liters was the reduction of efficient vendor.
facilities – representing almost 80% of our NIKE’s freshwater footprint. For context, 8.7
global materials production – that primarily billion liters can supply approximately 50,000 The number of key material suppliers installing
dye and finish fabric. All 38 facilities have Vietnamese households with freshwater for or pursuing wastewater recycling continues
been reporting their freshwater withdrawals a year58. Because we share our supply chain to grow. In FY15, only 10% of our key vendor
since 2015. manufacturing capacity our whole-facility facilities were operating or planning to install
approach helps advance the industry at large. wastewater recycling systems. By the end of
NIKE encourages each vendor to have a FY18, 55% of those same vendor facilities
short-term strategy based on improving One of our success stories is Vertical Knits in were operating, building, or working to install
manufacturing process efficiencies – fixing Merida, Mexico, which primarily dyes cotton water recycling systems. As we move into
leaks; replacing old dyeing machines with fabric. The facility was consistently ranked FY19, we’re expecting continued water savings
more water-efficient equipment; optimizing 25th of our 38 material vendor facilities in as our vendors meet their commitments,
rinsing and scouring steps; and ensuring their terms of water efficiency. Through adopting moving towards and possibly exceeding our
wastewater meets the requirements of the NIKE’s Minimum Water Program, installing 2020 commitment.
ZDHC Wastewater Guideline – since all of these a 50% wastewater recycling system, and
will result in a more cost-effective long-term
strategy for wastewater recycling.

57 S
 ome facilities have non-NIKE-related water-intensive manufacturing on property that are included in our overall key metric of liters freshwater withdrawn per kilogram of fabric produced. This requires the facility to improve in all aspects of their
operation, not just the portion that is related to NIKE business. Why take on a whole-facility approach that could put our 2020 target at risk? Because it’s the right thing to do.
58 Reference: “Vietnam’s Future Water Usage Model: A Controlled Living Experiment”, Journal of Water Resources and Protection, 18, 10, 204-214.

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Water
Measure Water (million lliters)
FY16 FY17 FY18
Build resilience through supplier Air MI
water risk mitigation plans with Total Freshwater Use 31.9 41.9 82.759
materials processors HQs
Total Freshwater Use 597.8 604.7 792.5
Other Offices60
Performance Total Freshwater Use 28.0 30.3 25.2
Focus Factories in High-risk Zones Textile Dyeing and Finishing61
with Risk Mitigation Plans (%) Condensate Use 367.1 389.5 344.7
Ground Water 4,810.0 5,272.3 4,958.1
Municipal/City Water to Facility 8,480.2 9,269.7 9,887.6
Rain Water Collection 44.2 13.0 0.8
FY18 / 79% Surface Water 2,175.0 2,159.1 1,333.6
FY20 target

100 %
Total Freshwater Use 15,876.4 17,103.6 16,524.8

59 Increase in water consumption due to expansion of existing Air MI facility and additional facilities brought online.
60 Scope includes U.S. only.
61 Includes focus suppliers only. Focus suppliers represent key suppliers involved in the dyeing and/or finishing of materials, which directly support footwear and
apparel finished product assembly.

Extreme weather events, like flooding and For example, after a severe flood one of our key
drought, due to climate change have the footwear finished goods factories in Indonesia
potential to interrupt our supply chains so we installed flood gates, elevated some of their
are proactively working with our key finished buildings, and undertook other protective
goods factories and material vendors to help measures. When their risk was recalculated,
them prepare for a water event. they were no longer in high risk.

We use the WRI’s Aqueduct Tool to regularly Mitigation Efforts are Effective
monitor the “baseline” water scarcity and Of the 529 finished good factories across the
flooding risks of each of our key suppliers. globe, only ten key finished goods factories
in four countries – Brazil (1), India (1), China (3),
Learn more: and Indonesia (5) – are in regions flagged as
WRI Aqueduct Tool having a high baseline risk of flooding or
drought. Of the 38 key material vendor facilities,
NIKE developed a Water Risk Mitigation only three facilities in the Greater China region
Guideline for suppliers, giving them an were identified with a high baseline water risk.
overview of what is expected of them as they By the end of FY18, all ten key finished goods
better understand their water risks. Our local factories completed their water risk mitigation
field consultants work with these suppliers plans and were acting against those plans. The
to validate their WRI risk score, taking local three material vendors located in regions of
conditions into consideration, and help them high-water risk are on track to have their risk
develop mitigation and management plans. mitigation plans complete
Once these plans are developed, we recalculate by the end of FY19. If there are no significant
their risk score to determine if their plans changes to our supply chain, we are on track to
are effective. achieve 100% of focus factories in high-risk
zones acting against plans one year ahead
of schedule.
Nike Flyleather uses less water than traditional leather manufacturing

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Chemistry
Target We know that chemicals must be managed It clearly outlines the expectations we place
properly to protect our workers, the on our suppliers in one single supplier-facing
Enable zero discharge environment, and our consumers. To achieve
this, we operate a chemistry program that
document and along with our updated
chemistry website, it represents a significant
of hazardous chemicals manages chemicals throughout the entire step forward for how we communicate our
product creation process – from innovation compliance requirements.
(ZDHC) and development, right through to raw material
and product creation. Chemical compliance Learn more:
is the foundation of our program, and our NIKE’s Chemistry Playbook
Chemistry is essential to our business. From suppliers must adhere to our updated Code of
raw material processing to product creation, it Conduct, which includes greater emphasis on In a shared supply base, industry-wide action
is used to manufacture the products we sell and chemical management. is essential for helping us work toward our goal
enables us to innovate new methods of make. of ZDHC. We continue to work within the ZDHC
Chemistry deeply influences product design, In April 2018, NIKE launched the Chemistry Foundation, a global industry collaboration of
performance, and the sustainability of our Playbook to support our compliance program currently 122 contributors, from co-creating
overall product creation process. and explain our end-to-end chemistry strategy. the ZDHC Wastewater guideline in FY17 to
actively monitoring continued compliance of our
focus suppliers. We also use software tools to
measure the uptake of manufacturing restricted
substance list (MRSL) compliant formulations
within key facilities and actively support use of
the ZDHC Chemical Gateway to help procure
compliant chemicals.

Beyond our current chemical compliance

programs, further work is being advanced
across three core areas to move us closer to
our ZDHC goal:

1. Elevating Chemicals
Management Capability
Association with the ZDHC, Sustainable
Apparel Coalition (SAC) and Apparel and
Footwear International RSL Management
Group (AFIRM) is being centered on the
creation of tools to improve chemicals
management across the supply chain

2. Assessing New Chemicals

By expanding the Chemistry Assessment
process, we can evaluate not just the
attributes, but also the risks of new
chemistries used within materials and
manufacturing processes. Through our
review, we aim to protect both human health
and the environment

3. Prioritizing Chemicals
Following a multi-year effort to landscape
the chemicals used in our industry, we are
now able to prioritize key chemicals for
phase-out and action, reducing our overall
chemical footprint

By combining compliance activities with actions

that go beyond compliance, and by using
industry-wide tools to support and measure
progress, we can scale practices that move us
NIKE HyperShield Waterproof Jacket
closer towards achieving our ZDHC goal.

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Chemistry
their chemicals management practices
where needed. To assess such management
behaviors within a supplier’s facility and
evaluate how effectively they can meet our
requirements, we launched a new set of Code
Leadership Standard for Restricted Substance
Management, which we integrated into our
global audit framework for finished goods
facilities. This builds upon our updated Code
of Conduct and is also an expectation of our
raw material vendors, with assessments carried
out through industry-centric tools, such as the
Sustainable Apparel Coalition’s (SAC) Facilities
Environment Module (FEM).

We continue to integrate the core requirements

of the RSL program into our materials sourcing
and supplier management practices. This
included work completed in FY18 which
created a stronger integration of RSL testing
and training into our standard onboarding
procedures for new material vendors.

Measure
NIKE Women’s Metallic Sheen Apparel
100% compliance with ZDHC
MRSL
Measure Since 2001, NIKE’s RSL program has been
at the center of our approach to managing
100% compliance with NIKE restricted chemicals. Continued commitment to Performance
Restricted Substance List (RSL) meeting global requirements supports our goal Compliance with the ZDHC MRSL62
of achieving 100% compliance and enables us
to see improvements in program performance.
Performance However, we recognize that tightening our FY18 / 68%
Tested Material in Compliance with NIKE own voluntary commitments or adapting FY20 target

100 %
RSL (%) manufacturing to meet new regulations can
result in materials initially not meeting our RSL
requirements. Such failures are resolved before
FY15 / 95% 62 FY18 was the first year we had a ZDHC standard.
products are placed on the market.
We believe that certain chemicals should not be
FY16 / 99% Consistently meeting increasingly stringent used to manufacture the materials and products
requirements demands a strong foundation of that we place on the market due to potential
capability across our supply base. To elevate health and environmental risks. Controlling
FY17 / 98% supplier understanding of our requirements, the chemicals used within manufacturing
we built a global RSL and chemicals is therefore a critical part of our chemicals
management training program and launched management program, as this can reduce risk
FY18 / 99% this to our supply base during FY16. We to our workers, the environment and support
FY20 target annually review the training curriculum to meet

100 %
the efforts of our product compliance (RSL)
suppliers’ needs and make training available program. However, we operate in a complex
to all suppliers across the globe. To date, we multi-tiered supply chain and achieving this
have trained over 1,000 facilities. NIKE also requires us to work across the industry to
leads an effort within the AFIRM Group to develop globally relevant solutions.
better coordinate and align training across our
shared facilities and the greater industry.
Once trained, it is essential that suppliers
implement these learnings and strengthen

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MinimizeEnvironmental
EnvironmentalFootprint
Impact Appendix

Chemistry
The ZDHC Foundation is a center for Measure Measure
sustainable chemicals management and is
one of the industry’s leading examples of how Achieve better chemical input Lead industry change through
engagement across the supply chain can management through scaling collective action
positively impact the way chemicals are used to
produce footwear and apparel products globally.
more sustainable chemistries
As we commit to scaling sustainable
Through our continued efforts to support and
To scale more sustainable chemistry, NIKE has chemistry across our supply chain, we are
strengthen ZDHC solutions, and further integrate
launched several tools including our internal actively exploring even broader avenues for
these into our business, FY18 represented a
chemical assessment process to help our engagement across the industry. Without
year of progress on many levels. This included:
suppliers and vendors align on what better continued and sustained commitment to
chemistry looks like. Through this assessment industry collaboration, the tools that we use
• Improving credibility of the ZDHC MRSL by
process we apply a standard method for would not be as effective in shaping the global
creating a transparent governance framework
evaluating new chemistries which provides a supply chain. The value of multiple brands
that now includes oversight from a range
consistent measure that can be used across aligning on a common approach is clear: it
of independent stakeholders that represent
a variety of chemistry types and ensures new increases awareness, adoption, compliance
NGO, academia, regulators, and industry
chemistries coming into the supply chain and, importantly, reduces confusion.
• L
 aunching the ZDHC Gateway – a support our sustainable chemistry goals. We
work closely with our innovation teams and Our external focus is on advancing work with
database of MRSL compliant formulations
contract manufacturers to assess chemical three groups:
– to enable suppliers to source MRSL
compliant chemistry hazards, allowing us to reduce the use of
particular chemicals and replace them with • AFIRM: We’ve actively engaged within
better alternatives. Alongside this program, we AFIRM for over a decade and remain focused
• C
 ontinuing to roll-out “Cleanchain®”
have implemented methods to baseline our on providing leadership via our position
software to our key raw material vendors,
chemistry footprint and to track our progress on the AFIRM Steering Committee, further
enabling us to gain systematic visibility
toward reducing the usage of controversial enabling achievement of the Group’s goals.
into chemical formulations used across our
chemicals. We continue to support the evolution of the
manufacturing sites and compare this against
AFIRM RSL and have integrated this into our
the ZDHC Gateway. Currently, all NIKE’s
One example of our efforts is our commitment own Chemical Playbook.
focus suppliers are disclosing their chemical
inventories into this system. to eliminate all PFC-based finishes from our
products by 2021 – while still enabling the • SAC: The roll-out of the updated SAC Higg
aesthetics and functionality customers expect. FEM enables an assessment of our supply
• R
 equiring focus suppliers to perform bi-
All PFC alternatives undergo our chemical chain’s chemical management capabilities.
annual wastewater testing against the ZDHC
assessment process to ensure that regrettable Use of the Higg FEM supports a unified
Wastewater Guideline to determine presence
substitutions are not introduced into the approach to measuring the environmental
of MRSL chemicals. During FY18, 68% of
supply chain. performance of our supply chain and
facilities were shown to be compliant against
identifying areas for improvement.
the ZDHC MRSL through wastewater testing.
• ZDHC: NIKE continues to provide leadership
within ZDHC and across all of ZDHC’s core
focus areas (Input, Process, and Output). We
have also leveraged technical expertise to
guide the continued development of the ZDHC
Gateway, the ZDHC Wastewater Guidelines,
and future ZDHC Air Emissions Guidelines.

Our industry has made strong progress

by aligning on common lists of restricted
substances and developing tools to elevate
capability and measure compliance. We are
proud to be part of this effort and remain
dedicated to shaping the future of the
global industry.

NIKE Just Do It Pack Mercurial 360, Hypervenom, Magista and Tiempo

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MinimizeEnvironmental
EnvironmentalFootprint
Impact Appendix

Chemistry
Measure
100% of focus suppliers meeting
NIKE’s wastewater quality
requirements for textile dyeing
and finishing processes

Performance
Suppliers Meeting NIKE’s Wastewater
Quality Requirements – Textile Dyeing
and Finishing (%)63
NIKE collaboration with London Cloth Yields women’s-only
footwear collection created with hand-woven, indigo-dyed fabric

FY16 / 58%
vendors, we expected a significant decrease in last parameter is requiring more time to
those vendors who met our new requirements. resolve since it involves capital construction.
FY17 / 73%
In FY18, the first year of testing against the In addition, other consultants are also working
ZDHC standard rather than the previous with other vendors in various parts of the
FY18 / 69% 11 p.p. (vs. FY16 baseline) standard, approximately 40% of our key world to address their wastewater issues.
FY20 target materials vendors reported compliance to our

100 % new requirements. • Basic Training: In regions where we see a

common issue among several facilities, we
63 FY16 is the baseline for this measure. Measurement of supplier These results tell us that the textile industry is hire an expert to provide training in the local
adherence to NIKE’s wastewater quality standards between FY16 and
FY18 in this table is based on a prior standard.
ripe for disruption when it comes to wastewater language at the site of one of the affected
treatment. We are proactively changing the vendors. In FY18, we provided a full-day
industry with these initiatives: training session in Suzhou, China for a half-
Legal compliance for discharging wastewater dozen vendors on how to perform proper
is a minimum requirement for NIKE suppliers. • Innovation: In a first for the textile industry, chemical dosing. As a result, several vendors
But legal compliance differs from country to NIKE, in conjunction with TÜV SÜD Water saw a 10-20% reduction in chemical use in
country. This is why, through collective action Services Singapore, Ramboll Group A/S, their wastewater treatment systems.
with other brands, we helped develop and and Elevate Textiles, demonstrated the
adopt the ZDHC Wastewater Guideline. effectiveness of the PetWin64 computer • Collective Action: NIKE’s water program
modeling software to predict the performance through FY19 and FY20 will be focused on
In FY11, we helped develop an industry of textile wastewater treatment systems65. building and improving wastewater treatment
standard that held our materials vendors This game-changing approach enables capability at our materials vendors. Because
accountable to five key conventional faster compliance to the ZDHC Wastewater we share our suppliers with other brands,
wastewater parameters. In FY17, 73% of our Guideline and NIKE’s new wastewater we realize the key to long-term success is to
key material vendors met these requirements, discharge requirements, and can be used to leverage collective action. We will continue to
but we saw a slight dip in FY18, with 69% assist in the design of new treatment systems occupy leadership positions in the ZDHC and
compliance. We attribute this fluctuation to before they are constructed. to champion the deployment of the FEM of
training and capability issues within the supply the SAC.
chain. Moving forward, we will strive to unleash • Networking: We developed a global network
the human potential of our vendors by focusing of wastewater treatment professionals and Moving to 100% compliance with the new NIKE
on training and capability building to ensure consulting firms experienced in treating wastewater requirement by the end of FY20 will
their wastewater treatment operations are difficult wastewaters who are readily available no doubt be challenging. But as NIKE has seen
consistent and robust. to assist vendors. In October 2017, one firsthand, industry transformation is not just
vendor in Indonesia was unable to meet possible – it is well underway. As we push for
In FY17, we introduced the ZDHC Wastewater our new wastewater requirements for seven cleaner wastewater discharges, we are enabling
Guidelines, holding suppliers accountable to conventional parameters. After hiring one of cost-effective water recycling to reduce our
24 additional conventional parameters and our recommended consultants to perform a freshwater footprint. Our vision is to be so
202 hazardous chemicals, to vendors that site visit, they were quickly able to eliminate successful with closed-loop water that we
produce approximately 80% of our materials. all but one parameter with minor adjustments make the need for any wastewater quality
Because we raised the bar for our key materials to their wastewater treatment system. The guidelines obsolete.

64 PetWin was developed by EnviroSim Associates, Ltd., Hamilton, Ontario, Canada (https://envirosim.com/)
65 J.Rydzewski, S. Pattanayak, R. Woodling, and J. Summers, ”Activated Sludge Modeling for Evaluating Textile Wastewater Treatment Plant Operations and Performance,” WEF-EESS Conference on Advancement in Water and Wastewater Treatment
and Reuse, AWWTR 2019, Singapore, July 31-August 1, 2019.

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PwC Assurance Report

Report of Independent Accountants
To the Board of Directors of NIKE, Inc.

We have reviewed the accompanying NIKE, Inc. (“NIKE”) Management Assertions management assertion, included in the accompanying Appendix
(Management Assertion), that the sustainability metrics identified below, for the year ended May 31, 2018, are presented in conformity with the assessment
criteria set forth in management’s assertion (the “assessment criteria”).

•  Total energy consumption (MWh)

• Scope 1 (Direct) Emissions (Metric tonnes CO2e)
• Scope 2 (Indirect) Location-Based Emissions (Metric tonnes CO2e)
• Scope 2 (Indirect) Market-Based Emissions (Metric tonnes CO2e)
• Scope 3 (Indirect) Emissions from Commercial Air Travel (Metric tonnes CO2e)

NIKE’s management is responsible for its assertion and for the selection of the criteria, which management believes provide an objective basis for measuring
and reporting on the sustainability metrics. Our responsibility is to express a conclusion on management’s assertion based on our review.

Our review was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants (“AICPA”) in AT-C
section 105, Concepts Common to All Attestation Engagements, and AT-C section 210, Review Engagements. Those standards require that we plan and
perform the review to obtain limited assurance about whether any material modifications should be made to management’s assertion in order to be fairly
stated. A review is substantially less in scope than an examination, the objective of which is to obtain reasonable assurance about whether management’s
assertion is fairly stated, in all material respects, in order to express an opinion. Accordingly, we do not express such an opinion. We believe that our review
provides a reasonable basis for our conclusion.

In performing our review, we have complied with the independence and other ethical requirements of the Code of Professional Conduct issued by the AICPA.

We applied the Statements on Quality Control Standards established by the AICPA and, accordingly, maintain a comprehensive system of quality control.

GHG emissions quantification is subject to inherent measurement uncertainty because of such things as GHG emission factors that are used in mathematical
models to calculate GHG emissions and the inability of those models, due to incomplete scientific knowledge and other factors, to accurately measure under
all circumstances the relationship between various inputs and the resultant GHG emissions. Environmental and energy use data used in GHG emissions
calculations are subject to inherent limitations, given the nature and the methods used for measuring such data. The selection by management of different
but acceptable measurement techniques could result in materially different amounts or metrics being reported.

Data related to total energy consumed is subject to inherent limitations given the nature and the methods used for determining such data. The selection by
management of different but acceptable measurement techniques could result in materially different amounts or metrics being reported.

As discussed in the accompanying NIKE, Inc. Management Assertion, NIKE has estimated GHG emissions for certain emission sources for which no
primary usage data is available.

Based on our review, we are not aware of any material modifications that should be made to the accompanying NIKE, Inc. Management Assertion in order for
it to be fairly stated.

May 15, 2019

PricewaterhouseCoopers LLP, 805 SW Broadway, Suite 800 Portland, OR 97205

www.pwc.com

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NIKE, Inc.’s Management Assertion

Fiscal Year ended May 31, 2018 Scope 1, 2, and 3 (Commercial Air Travel) Energy Consumption and Greenhouse Gas (GHG) Emissions

SELECTED SUSTAINABILITY METRICS Fiscal Year ended

May 31, 2018 (FY18)

Total Energy Consumption (MWh) 813,703

Scope 1 (Direct) Emissions (Metric tonnes CO2e) 41,942

Scope 2 (Indirect) Location-Based Emissions (Metric tonnes CO2e) 259,103

Scope 2 (Indirect) Market-Based Emissions (Metric tonnes CO2e) 218,240

Scope 3 Emissions from Commercial Air Travel (Metric tonnes CO2e) 75,645

Prior to conversion to CO2e, metric tonnes of GHG emissions by gas are 258,803, 17, and 3 of CO2, CH4, and N2O, respectively.

Overview
NIKE, Inc. (NIKE) captures, calculates, and reports direct and indirect GHG emissions data in accordance with the principles and guidance of the World
Resources Institute and the World Business Council for Sustainable Development’s Greenhouse Gas Protocol Initiative’s Corporate GHG Accounting and
Reporting Standard (Revised Edition) (“GHG Protocol”) and the Corporate Value Chain (Scope 3) Accounting and Reporting Standard, which are recognized
external standards.

NIKE management is responsible for selecting or developing, and upholding, the assessment criteria, which management believes provide an objective
foundation for measuring and reporting on the selected sustainability metrics (the “metrics”) presented in the table above. NIKE management is also
responsible for the assessment, collection, quantification, and reporting of energy and emissions data, and for the completeness, accuracy, and validity of
the GHG emissions calculations for the Fiscal Year ended May 31, 2018.

Organizational Boundary
NIKE uses the operational control approach in conformance with the GHG Protocol to report energy consumption and direct and indirect GHG emissions for
100% of the facilities where NIKE has operational control.

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NIKE, Inc.’s Management Assertion

Scope
NIKE’s Scope 1 and 2 reporting is outlined below. Scope 3 (commercial air travel only) is also shown.

SCOPE DESCRIPTION

RETAIL • Includes NIKE owned or operated Nike Brand, Converse, and Hurley stores globally.
• Energy consumed includes natural gas, electricity, and steam. Natural gas and electricity usage outside of the U.S. and
Canada, as well as for landlord-managed sites in the U.S. and Canada, is estimated. Our estimation methodology is
described below.
• Refrigerant leakage from HVAC units are not included in reporting at this time.

DISTRIBUTION CENTERS • Includes top 21 NIKE owned or operated DCs globally as of May 31, 2018, which represent more than 94% of shipped
(DCs) units and square footage.
• Energy consumed includes natural gas, hi-sene, diesel, propane, electricity, onsite solar, and onsite wind.
• Diesel is used in backup generators.
• Propane is used in at least two DCs for scrubbers/floor sweepers. A portion of propane usage is estimated leveraging
known propane usage. Our estimation methodology is described below.
• Refrigerant leakage from HVAC units are not included in reporting at this time.

HEADQUARTERS (HQs) • Includes emissions from building facilities at five HQs: World HQ U.S. (WHQ), European HQ, Greater China HQ, Converse
HQ, and Hurley HQ. This covers over 8 million square feet. Emissions from new construction at HQ locations are reported
separately under Other Offices and WHQ Building Construction discussed below until buildings become operational.
• Energy consumed includes natural gas, diesel, propane, and electricity.
• Diesel is used in backup generators.
• Propane is used in food services, vendor landscaping services, and some forklifts.
• Refrigerant leakage from HVAC units are not included in reporting at this time.

AIR MANUFACTURING • Includes NIKE-owned manufacturing facilities and related facilities that are the primary producers of NIKE Air units.
INNOVATION Included four sites in FY18, one of which was closed (ancillary storage site), one of which was opened, and one of which
was expanded.
• Energy consumed includes natural gas, diesel, propane, and electricity.
• Diesel is used in backup generators.
• Propane is used in a single limited application in one Air Manufacturing Innovation (Air MI) facility.
• Refrigerant leakage from HVAC units are not included in reporting at this time.

OTHER (NON- • Includes non-HQ office facilities (such as regional sales offices) and new building construction at WHQ prior to newly
HQ) OFFICES AND constructed sites becoming operational. Once new construction becomes operational, in alignment with NIKE’s financial
WHQ BUILDING reporting approach, new construction is reclassified to HQ scope. Three facilities transitioned to HQ scope during FY18.
CONSTRUCTION Energy consumed includes natural gas and electricity. Natural gas and electricity usage outside of the U.S. and Canada, as
well as for landlord-managed sites in the U.S. and Canada, is estimated. Our estimation methodology is described below.

VEHICLES • V
 ehicles include service vehicles at WHQ. Company-leased vehicles for use by employees in other geographies are not
included in reporting at this time.

JETS • Includes jet aviation fuel from our business travel using NIKE’s two corporate jets, operated from the U.S.

COMMERCIAL TRAVEL • Data represents commercial business air travel across 48 countries.
• Commercial air travel emissions are estimated based on mileage calculated from number and route distance of trips.

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Exclusions
Each year, we aim to increase the quality of the data reported. As tenants of leased facilities, we do not yet have access to complete refrigerant sources
and certain energy sources for shared building common spaces. We are pursuing this data, as well as company-leased vehicles operated in geographies
outside of the U.S. for future reports.

GHG Base Data

FY15 is used as the base year in alignment with FY20 targets baseline year. Activity data used to calculate Scope 1 (direct) emissions is sourced from direct
measurements or third-party invoices (e.g., diesel, jet fuel and natural gas). Activity data used to calculate Scope 2 (indirect) emissions is sourced from third-
party invoices (e.g., electricity) wherever possible and is collected across the business via a variety of internal processes and systems. Scope 3 (commercial
air travel) data used to report GHG emissions from transporting our employees is obtained from reports provided by third-parties which includes number of
flights and distance data.

As described in this assertion, activity data for Scope 1 and Scope 2 is sourced from estimates where actual consumption data is not available. NIKE
continues to work on obtaining systematic access to more actual consumption data. Estimates are described in more detail below. Reported data has
been rounded to the nearest whole number.

Estimation Methodology
Estimation methodologies employ reasonable assumptions to avoid understating NIKE’s emissions footprint and are described below.

Natural Gas (retail and Natural gas usage is estimated for sites outside of the U.S. and Canada, and for landlord-managed sites in the U.S. and
non-HQ offices outside of Canada where visibility on energy consumption is low. Square footage of retail and non-HQ offices per country is used, along
the U.S. and Canada) with country-level climate assumptions and CBECS energy use intensity applied to NIKE square footage based on climate
type. In the U.S. and Canada, where some sites are landlord-managed and visibility on energy consumption is low, our
internal known average country-level energy use intensity is used instead of the external CBECS benchmark. Approximately
88% of retail Scope 1 emissions in FY18 were estimated, and approximately 72% of non-HQ Scope 1 emissions in FY18
were estimated.

Electricity (retail and non- Electricity usage is estimated for sites outside of the U.S. and Canada, and for landlord-managed sites in the U.S. and
HQ offices outside of the Canada where visibility on energy consumption is low. Square footage of retail and non-HQ offices per country is used using
U.S. and Canada) actual FY18 square footage data, along with electricity intensity kWh per square foot of known FY15 NIKE retail or offices
electricity. About 72% of retail Scope 2 emissions in FY18 were estimated. About 87% of non-HQ Scope 2 emissions in FY18
were estimated.

Propane (DC) Propane usage at one DC is estimated leveraging propane consumption intensity at a comparable DC based on relative
square footage.

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Emissions Factors
Emissions are reported in metric tonnes of carbon dioxide equivalent and include CO2, CH4, and N2O.
Exceptions to reporting CH4 and N2O are as follows:

• F acilities’ emissions are reported in CO2e except within a limited subset of consumption data where emissions factors for other gases (CH4, N2O) are not
provided. These exceptions include AIB/EU Residual Mix Emissions factors and certain supplier-specific emissions factors. Although Green-E/US Residual
Mix only provides CO2, NIKE back-calculates CH4 and N2O leveraging eGRID.
• Commercial Travel emissions are in CO2 due to data availability. The emissions from other gases are not material to our reported GHG emissions.

Carbon dioxide emissions and equivalents resulting from the activities and business units described above have been determined on the basis of measured
or estimated fuel and electricity usage, multiplied by relevant, published carbon emission factors, which are updated annually according to an internal policy
to use the most recent emissions factors available before the annual internal cutoff date, which is 15 days after the fiscal year end. Carbon dioxide equivalent
emissions utilize Global Warming Potentials (GWPs) primarily sourced from the Intergovernmental Panel on Climate Change Fifth Assessment Report
(Assessment Report 5 – 100 year), and EPA emissions factor sources use Assessment Report 4.

The tables below outline the emissions factors sources used in emissions calculations.

EMISSIONS
EMISSION SOURCE SOURCE TYPE EMISSION FACTOR EMPLOYED
Scope 1 Natural Gas GHG Protocol Emissions Factors from Cross-Sector Tools March 2017

Scope 1 Hi-sene GHG Protocol

Scope 1 Diesel GHG Protocol Emissions Factors from Cross-Sector Tools March 2017

Scope 1 Propane EPA Center for Corporate Climate Leadership’s Emission Factors for Greenhouse
Gas Inventories

Scope 1 Gasoline GHG Protocol Emissions Factors from Cross-Sector Tools March 2017

Scope 2 Electricity (U.S.) Contractual instruments (Power purchase agreement)

Scope 2 Electricity (U.S. and Canada) Supplier-specific emission factors (various sources)

Scope 2 Electricity (U.S.) Green-e Energy U.S. Residual Mix Emissions Rates

Scope 2 Electricity (U.S.) EPA Center for Corporate Climate Leadership’s Emission Factors for Greenhouse Gas
Inventories

Scope 2 Electricity (U.S.) eGRID (location-based)

Scope 2 Electricity (EU) Association of Issuing Bodies (AIB) European Residual Mixes

Scope 2 Electricity (Global) IEA World Electricity CO2 Emissions Factors

Scope 2 Steam 2006 IPCC Guidelines for National Greenhouse Gas Inventories

Scope 3 Air Travel U.K. Department for Environment Food and Rural Affairs (DEFRA) and the Department of
(Commercial Travel Only) Energy and Climate Change (DECC); GHG Protocol

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In quantifying market-based electricity GHG emissions, GHG Protocol Scope 2 Guidance defines a hierarchy of factors for quantifying market-based
emissions, in order from highest to lowest precision. The table below describes the hierarchy and the relevance to NIKE for the current year reporting.

EMISSION
SOURCE TYPE EMISSION FACTOR EMPLOYED
Direct Line Connection Not applicable

Energy Attribute Certificates NIKE applies a zero emission factor for onsite solar and wind generation where Renewable Energy Credits (or Guarantees
of Origin) generated are retained by NIKE; and for purchased renewable energy attribute certificates applied to NIKE’s
operations. Biomass renewable energy credits employ a zero emission factor for CO2; however, biomass source-specific
emissions factors are applied for CH4 and N2O.

Electricity Contracts NIKE applies a zero emission factor for all sites in scope of its power purchase agreement.

Energy Supplier-Specific U.S.: NIKE applies publicly available supplier-specific emission factors where available.
Emissions Factors

Residual Mix U.S.: NIKE applies residual mix emission factors from Green-e Energy U.S. Residual Mix Emissions Rates.

Europe: NIKE applies country emission factors from the AIB.

Location-Based Factors If none of the above options are available, NIKE uses location-based factors as described in the table above.

Uncertainty
GHG emissions quantification is subject to inherent measurement uncertainty because of such things as the GHG emissions factors that are used in
mathematical models to calculate GHG emissions and the inability of these models, due to incomplete scientific knowledge and other factors, to accurately
measure under all circumstances the relationship between various inputs and the resultant GHG emissions. Environmental and energy use data used in GHG
emissions calculations are subject to inherent limitations, given the nature and the methods used for measuring such data. The selection by management of
different but acceptable measurement techniques could result in materially different amounts of metrics being reported.

Data related to total energy consumed is subject to inherent limitations given the nature and the methods used for determining such data. The selection by
management of different but acceptable measurement techniques could result in materially different amounts or metrics being reported.

NIKE recognizes that commercial air travel remains an estimate since unforeseen circumstances can occur (e.g., different routes due to adverse weather or
unforeseen aircraft fleet changes); however, the figure presented is considered to be a reasonable estimate of NIKE’s commercial air travel emissions.

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Global Reporting Initiative (GRI) Index

This report is aligned with the GRI Standards at the Core level. The Sustainable Development Goals (SDGs) and the United Nations
Global Compact (UNGC) Principles are also referenced below.

GENERAL DISCLOSURES

GRI UNGC
STANDARD NUMBER GRI DISCLOSURE LOCATION AND NOTES OMISSION PRINCIPLE SDG
ORGANIZATION
102-1 Name of the organization NIKE, Inc.
PROFILE
FY18 10-K: Item 7. Management’s Discussion and Analysis of Financial
102-2 Activities, brands, products, and services
Condition and Results of Operations: page 73 (Annual Report)
102-3 Location of headquarters One Bowerman Dr, Beaverton, OR 97005
FY18 10-K: Item 1. Business: pages 55–59 and Item 2. Properties: page 68
102-4 Location of operations (Annual Report)
NIKE Manufacturing Map
FY18 Proxy Statement
102-5 Ownership and legal form Company Bylaws
FY18 10-K: Item 1. Business: page 55 (Annual Report)
102-6 Markets served FY18 10-K: Item 1. Business: pages 55–59 (Annual Report)
102-7 Scale of the organization FY18 10-K: Item 1. Business: pages 55–59 (Annual Report)

Unleash Human Potential: Employees: page 14

102-8a, b: We
FY18 10-K: Item 1. Business: page 59 (Annual Report)
currently do not have
102-8 Information on employees and other workers d. We do not have a significant portion of the organization’s activities
temporary workers in
performed by people who are not employees.
our data sources.
e. No significant variations

Additional Information
TOTAL EMPLOYEES BY EMPLOYMENT TYPE AND GENDER1 (102-8C)
CY16 CY17 CY18
Female Male Female Male Female Male
Regular Full-Time 21,599 23,824 21,628 23,875 23,581 25,345
Regular Part-Time 9,741 10,052 10,456 10,780 8,219 8,187
TOTAL REGULAR 31,340 33,876 32,084 34,655 31,800 33,532
FULL-TIME 69% 70% 67% 69% 74% 76%
1 Temporary employees excluded.

NIKE, INC. EMPLOYEE TOTALS BY ETHNICITY (U.S.)

ALL EMPLOYEES DIRECTORS+ VPs
CY18 CY17 CY16 CY18 CY17 CY16 CY18 CY17 CY16
URG 55.2% 56.5% 54.6% 23.9% 22.9% 22.4% 18.6% 15.6% 16.6%
Unknown 0.6% 0.4% 0.0% 2.1% 1.5% 0.1% 2.6% 2.4% 0.3%
White (Not Hispanic/Latino) 44.2% 43.1% 45.4% 74.0% 75.6% 77.5% 78.8% 82.0% 83.1%

Transform Manufacturing: Sustainable Sourcing: page 28

FY18 10-K: Item 1. Business: pages 57–58 (Annual Report)
102-9 Supply chain
Stages of Our Value Chain
Value Chain Footprint
FY18 10-K: Item 7. Management’s Discussion and Analysis of Financial
Significant changes to the organization
102-10 Condition and Results of Operations: page 73 (Annual Report)
and its supply chain
FY18 10-K: Item 2. Properties: page 68 (Annual Report)
Issue Prioritization: page 8
102-11 Precautionary Principle or approach Targets Summary: page 10
Minimize Environmental Impact: pages 34–56
Sustainability Commitments
102-12 External initiatives Industry Standards & Assessment Tools
We also mention external initiatives throughout the report.
Transform Manufacturing: Partnerships to Accelerate Industry Change:
ORGANIZATION page 32
102-13 Membership of associations
PROFILE Partnerships & Collaborations
We also mention memberships throughout the report.
Letter From Our CEO: page 5
STRATEGY 102-14 Statement from senior decision-maker
Purpose Committee: page 7
Letter from Our CEO: page 5
NIKE Code of Conduct
ETHICS AND Values, principles, standards, and norms
102-16 NIKE Code Leadership Standards
INTEGRITY of behavior
NIKE Code of Ethics
Sustainability Policies

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GRI UNGC
STANDARD NUMBER GRI DISCLOSURE LOCATION AND NOTES OMISSION PRINCIPLE SDG
FY18 Proxy Statement: Corporate Governance: pages 14–23
GOVERNANCE 102-18 Governance structure Purpose Committee: page 6
Sustainability Governance

Additional Information
Corporate Responsibility, Sustainability and Governance Committee
The purpose of the Corporate Responsibility and Sustainability Committee of the Board of Directors of NIKE, Inc. is to review NIKE’s significant strategies, activities, and policies regarding sustainability (including labor
practices), and community impact and charitable activities, and make recommendations to the Board. Learn more.

Responsibilities include:
• Review and provide guidance to management on sustainability issues and impacts, and the integration of sustainability into NIKE’s business, including innovation, product design, manufacturing and sourcing, and
operations.
• Review, provide guidance to management, and report to the Board on sustainability (including labor practices) within NIKE’s supply chain, and review reports of NIKE’s sustainability audits.
• Review and provide guidance to management regarding NIKE’s work with industry organizations and non-governmental organizations concerning corporate responsibility.
• Annually review the activities of the NIKE Foundation and NIKE community impact initiatives.
• Review and make recommendations to management on reporting to shareholders and other communities regarding corporate responsibility activities.
• Review, provide guidance to management, and report to the Board regarding the involvement of significant corporate responsibility issues in major business decisions, to protect NIKE’s valuable goodwill, and
human and intellectual capital.
• Review and make recommendations to the Board with respect to any shareholder proposal that relates to the matters overseen by the Committee.
• Annually evaluate the performance of the Committee and report the results of the evaluation to the Board.
• Review and assess annually the adequacy of the Committee’s charter.
• Perform such other duties and functions as may, from time to time, be assigned to the Committee by the Board.

FY18 10-K: Item 1A. Risk Factors: pages 60–67 (Annual Report)
Identifying and managing economic,
102-29 FY18 10-K: Risk Management and Derivatives: pages 113–116 (Annual Report)
environmental, and social impacts
Minimize Environmental Impact: Energy and Carbon: pages 41–46

102-30 Effectiveness of risk management processes Minimize Environmental Impact: Energy and Carbon: pages 41–46
STAKEHOLDER Issue Prioritization: page 8
102-40 List of stakeholder groups
ENGAGEMENT Partnerships & Collaborations

102-41 Collective bargaining agreements FY18 10-K: Item 1. Business: page 59

102-42 Identifying and selecting stakeholders Partnerships & Collaborations

See below
102-43 Approach to stakeholder engagement Partnerships & Collaborations
Sustainability Governance
102-44 Key topics and concerns raised Issue Prioritization: page 8
REPORTING Entities included in the consolidated financial About This Report: page 2
102-45
PRACTICE statements FY18 10-K: Item 1. Business: page 55 (Annual Report)
102-46 Defining report content and topic Boundaries Issue Prioritization: page 8
102-47 List of material topics Issue Prioritization: page 8
In cases where shifts in scope, methodology, and/or data quality have led
102-48 Restatements of information to changes in previously reported performance results, we’ve restated
historically reported results. Details are provided below.

DATA PAGE REASON

Employee Data 14–15 All previously reported data was restated to show calendar year figures instead of fiscal year figures.
Occupational Health & Safety Industry Rates & Codes 24 CY17 Industry Rates were adjusted to align with CY17 BLS rates, as at the time of NIKE’s FY16/17 Sustainable Business
Report publication, CY17 BLS rates hadn’t yet been published and CY16 BLS rates were used instead.

The Air MI Industry Code changed from 326100 (Plastics product manufacturing) to 326113 (Unlaminated plastics film and
sheet [except packaging] manufacturing) to reflect a more accurate classification of the current manufacturing practices at
NIKE, Inc. facilities.

The Offices Industry Code changed from 561400 (Business Support Services) to 551114 (Corporate, subsidiary, and
regional managing offices), which reflects a more accurate classification of the current NIKE, Inc. office activities.
• Materials Target: Increase use of more sustainable materials 10, 38, 39, 40 FY16 and 17 target and measure performance values were adjusted, along with underlying reported cotton and polyester
• Materials Measure: Source 100% of our cotton more sustainably volumes. Due to data availability limitations in the past, we reported Fall through Summer product in each fiscal year’s
(certified organic, better cotton initiative or recycled) across NIKE performance value (e.g. FY17 was reported as FA16–SU17). To align with the 2020 target year Spring through Holiday 20
by the end of calendar year 2020 (SP–HO20), we’re now able to report SP–HO product for each fiscal year. Additionally, an error discovered in underlying
data was corrected and the source for some material volume data was shifted.
• Waste Target: Eliminate footwear manufacturing waste to landfill 10, 47, 48, 50 FY17 target and measure performance values were adjusted, along with underlying reported manufacturing waste volumes.
or incineration, while continuing to reduce overall waste. The changes are due to improved data integrity and alignment with NIKE guidelines/definitions.
• Waste Measure: Reduce waste index by 10%, covering footwear
manufacturing, distribution centers, and headquarter locations

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DATA PAGE REASON

 arbon Measure: Decrease energy use and CO2e emissions 25%
• C 10, 42, 43, 45, 46 FY15 through FY17 measure performance values were adjusted to include estimated natural gas consumption and
per unit in key operations (inbound and outbound logistics, DCs, associated emissions for retail facilities outside of the U.S. and Canada (and landlord-managed retail facilities within the
HQs, finished goods manufacturing, and NIKE-owned retail) U.S. and Canada), in alignment with Scope 1 and 2 emissions assurance activities, as well as other minor data integrity
• Scope 1 Energy Consumed and Emissions improvements that slightly adjusted FY17 reported indirect energy consumption and emissions.

Scope 1 energy consumption and emissions data were also restated to reflect a broader scope of coverage, with the
addition of estimated natural gas consumption and associated emissions for retail facilities and non-HQ office facilities
outside of the U.S. and Canada (and for landlord-managed sites within the U.S. and Canada), along with diesel, propane,
and gasoline.

Data Integrity

Sustainability data is shaped by a landscape of evolving methodologies, advancing standards, and expansions in data accessibility over time. Adapting to these changes while maintaining comparability in our data
is critical to instilling integrity and confidence in the validity of the insights the data provides. We understand that we must adapt and be nimble to keep pace with broadening data sets and emerging standards. We
continue to focus on the internal controls in our sustainability data processes and systems.

For the first time, we have obtained external assurance on select reported metrics (Scope 1 and 2 energy consumption and emissions, and Scope 3 commercial air travel emissions). More information can be found
in the appendix.

In cases where shifts in scope, methodology, and/or data quality have led to changes in previously reported performance results, we’ve restated historically reported results and provided context on the changes in
the Restatements section of the Appendix.

The data presented in this report has been collected, reviewed, and internally validated and represents the most complete and accurate information at the time of publication. NIKE will continue to be transparent on
revisions to reported data in the future.
GRI LOCATION AND UNGC
STANDARD NUMBER GRI DISCLOSURE NOTES OMISSION PRINCIPLE SDG
Issue Prioritization: page 8
102-49 Changes in reporting
About This Report: page 2
102-50 Reporting period About This Report: page 2
102-51 Date of most recent report We published the FY16/17 Sustainable Business Report in May 2018.
102-52 Reporting cycle NIKE reports on an annual reporting cycle.
102-53 Contact point for questions regarding the report sustainability@nike.com
Claims of reporting in accordance with the
102-54 About This Report: page 2
GRI Standards
102-55 GRI content index GRI Index: pages 66–74
PwC Assurance Letter: page 58
102-56 External assurance
NIKE, Inc. Management Assertion: pages 59–63

ECONOMIC

GRI UNGC
STANDARD NUMBER GRI DISCLOSURE LOCATION AND NOTES OMISSION PRINCIPLE SDG
ECONOMIC PERFORMANCE
MATERIAL ASPECTS: Climate Change Risks
Issue Prioritization: page 8
Explanation of the material topic and its
103-1 Minimize Environmental Impact: Energy and Carbon: pages 41–46
GRI 103: Boundaries
Energy & Emissions
MANAGEMENT
Minimize Environmental Impact: Energy and Carbon: pages 41–46
APPROACH 103-2 The management approach and its components
Energy & Emissions
103-3 Evaluation of the management approach Minimize Environmental Impact: Energy and Carbon: pages 41–46

GRI 201: Minimize Environmental Impact: Energy and Carbon: pages 41–46
Financial implications and other risks and
ECONOMIC 201-2 Minimize Environmental Impact: Water: pages 51–52
opportunities due to climate change
PERFORMANCE Energy & Emissions

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MATERIALS
MATERIAL ASPECTS: Non-Renewable Resource Depletion
Explanation of the material topic and its Issue Prioritization: page 8
103-1
GRI 103: Boundaries Minimize Environmental Impact: Materials: pages 38–40
MANAGEMENT The management approach and its Minimize Environmental Impact: Materials: pages 38–40
103-2
APPROACH components Materials
103-3 Evaluation of the management approach Minimize Environmental Impact: Materials: pages 38–40
GRI 301:
301-1 Materials used by weight or volume Minimize Environmental Impact: Materials: pages 38–40 8
MATERIALS

Additional Information
The top five material volumes reported include renewable materials: cotton and corrugate/paper; and non-renewable materials: polyester, rubber, and EVA foam. All material types reported are purchased
from external suppliers except for EVA foam, which is sourced internally. Data reported consists of both direct measurements and estimates. While many materials are measured directly for a wide variety
of products, total corrugate volumes are estimated using average packaging material used for each product group. The majority of cotton and polyester volume data is sourced using direct measurements,
though product creation data is used to estimate material volumes for certain parts of the business. In FY18, NIKE shifted the data source used for reporting Nike brand apparel and footwear volumes as
well as polyester volumes across all product engines.
ENERGY
MATERIAL ASPECTS: Energy
Issue Prioritization: page 8
Explanation of the material topic and its
103-1 Minimize Environmental Impact: Energy and Carbon: pages 41–46
GRI 103: Boundaries
Energy & Emissions
MANAGEMENT
The management approach and its Minimize Environmental Impact: Energy and Carbon: pages 41–46
APPROACH 103-2
components Energy & Emissions
103-3 Evaluation of the management approach Minimize Environmental Impact: Energy and Carbon: pages 41–46
8

GRI 302: ENERGY 302-1 Energy consumption within the organization Minimize Environmental Impact: Energy and Carbon: pages 41–46

WATER
MATERIAL ASPECTS: Water Use
Issue Prioritization: page 8
Explanation of the material topic and its
103-1 Minimize Environmental Impact: Water: pages 51–52
GRI 103: Boundaries
Water
MANAGEMENT
The management approach and its Minimize Environmental Impact: Water: pages 51–52
APPROACH 103-2
components Water
103-3 Evaluation of the management approach Minimize Environmental Impact: Water: pages 51–52
GRI 303: WATER 303-1 Water withdrawal by source Minimize Environmental Impact: Water: pages 51–52 8

Additional Information
Contract manufacturers report their freshwater withdrawal volumes and source to NIKE in accordance with NIKE’s Water Program, which outlines measurement practices and defines freshwater sources.
The facility boundary is equivalent to the property boundary, and freshwater is inclusive of domestic and manufacturing uses.
EMISSIONS
MATERIAL ASPECTS: GHG Emissions
Issue Prioritization: page 9
Explanation of the material topic and its
GRI 103: 103-1 Minimize Environmental Impact: Energy and Carbon: pages 41–46
Boundaries
MANAGEMENT Energy & Emissions
APPROACH The management approach and its Minimize Environmental Impact: Energy and Carbon: pages 41–46
103-2
components Energy & Emissions
103-3 Evaluation of the management approach Minimize Environmental Impact: Energy and Carbon: pages 41–46
305-1 Direct (Scope 1) GHG emissions 8
GRI 305:
305-2 Direct (Scope 2) GHG emissions Minimize Environmental Impact: Energy and Carbon: pages 41–46
EMISSIONS
305-3 Direct (Scope 3) GHG emissions

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Additional Information
NIKE converts all energy consumed to kWhe using net calorific value of the direct fuels consumed, including transportation fuels. Emissions data for HFCs, PFCs, and SF6 are not reported.
NIKE has phased out SF6 and therefore doesn’t have SF6 emissions. Emissions for other greenhouse gases are either not relevant, immaterial or data is not available.

SCOPE 1 AND 2
For information on direct and indirect energy consumption, scope 1 and 2 emissions and the scope 3 emissions accounting standard used, see the Management Assertion letter.
Additional breakdowns of scope 1 and 2 emissions are shown below.

FUEL CONSUMPTION BY FUEL TYPE (MWh)

FY15 FY16 FY17 FY18
Natural Gas 153,342 157,002 175,197 183,861
Gasoline 1,616 2,130 2,653 2,496
Jet Fuel 12,411 16,972 13,105 14,586
Recycled Oil1 2,470 2,439 2,507 -
Hi-Sene - - - 2,648
Diesel 1,236 1,251 1,251 1,308
Propane 520 520 519 523
TOTAL 171,595 180,314 195,232 205,421
1 R ecycled oil was only consumed at one distribution center. Usage stopped in FY17. Reported values reflect consumption at this
single facility.
2 Hi-sene is only consumed at one distribution center, starting in FY18. Reported values reflect consumption at this single facility.

FUEL CONSUMPTION (MWh) & SCOPE 1 EMISSIONS (METRIC TONNES CO2e) BY COUNTRY/REGION
FY15 FY16 FY17 FY18
Fuel Consumed Scope 1 Fuel Consumed Scope 1 Fuel Consumed Scope 1 Fuel Consumed Scope 1
Argentina 1,030 209 1,090 221 1,138 231 1,205 244
Australia 1,146 232 1,213 246 1,268 257 1,342 272
Austria 680 138 721 146 755 153 800 162
Belgium 11,399 2,309 10,959 2,220 15,155 3,070 12,745 2,582
Brazil 3,074 625 3,268 664 3,438 699 3,651 742
Canada 7,144 1,447 8,535 1,556 8,802 1,606 10,255 1,870
Chile 630 128 669 136 703 142 745 151
China 26,671 5,326 28,348 5,663 29,558 5,913 30,827 6,180
Croatia 209 42 218 44 224 45 235 48
Czech Republic 309 63 324 66 334 68 352 71
Denmark 432 88 456 92 473 96 500 101
Finland 96 20 99 20 99 20 103 21
France 3,504 710 3,712 752 3,885 787 4,115 834
Germany 5,316 1,077 5,589 1,132 5,787 1,172 4,643 940
Greece - - - - - - - -
Hong Kong 370 75 380 77 380 77 393 80
Hungary 391 79 413 84 429 87 453 92
India 242 49 248 50 248 50 257 52
Indonesia 225 46 231 47 231 47 239 48
Ireland 273 55 290 59 305 62 324 66
Israel - - - - - - - -
Italy 1,990 403 2,112 428 2,215 449 2,349 476
Japan 5,300 1,020 5,218 1,009 5,946 1,141 6,402 1,227
Malaysia 386 78 410 83 432 87 459 93
Mexico 3,454 700 3,685 747 3,896 789 4,147 840
Netherlands 1,183 240 1,253 254 1,310 265 1,387 281
New Zealand 84 17 89 18 93 19 98 20
Norway 422 86 440 89 450 91 472 96
Panama 21 4 21 4 21 4 22 4
Philippines 56 11 57 12 57 12 59 12
Poland 832 169 882 179 923 187 978 198
Portugal - - - - - - - -
Russia 2,207 447 2,349 476 2,474 501 2,629 533

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FUEL CONSUMPTION (MWh) & SCOPE 1 EMISSIONS (METRIC TONNES CO2e) BY COUNTRY/REGION CONTINUED
FY15 FY16 FY17 FY18
Fuel Consumed Scope 1 Fuel Consumed Scope 1 Fuel Consumed Scope 1 Fuel Consumed Scope 1
Singapore 630 128 656 133 669 135 699 142
Slovakia 88 18 95 19 101 20 107 22
South Africa 795 161 859 175 900 183 954 194
South Korea 5,007 1,250 5,115 1,269 5,289 1,310 5,587 1,245
Spain 2,560 519 2,735 554 2,897 587 3,087 625
Sri Lanka 8 2 8 2 8 2 8 2
Sweden 452 92 471 95 481 97 503 102
Switzerland 515 104 543 110 565 114 597 121
Taiwan 38 8 40 8 43 9 46 9
Thailand 405 82 430 87 452 92 479 97
Turkey 1,173 238 1,246 252 1,308 265 1,116 226
United Arab Emirates 6 1 6 1 6 1 7 1
United Kingdom 5,057 1,024 5,390 1,092 5,689 1,152 6,051 1,226
United States 75,481 16,047 79,129 16,893 85,468 17,978 93,833 19,562
Uruguay 151 31 162 33 172 35 - -
Vietnam 150 30 154 31 154 31 160 32
TOTAL 171,596 35,623 180,314 37,325 195,232 40,139 205,421 41,941

CARBON SCOPE MATRIX1

25% ENERGY AND CARBON

35% ENERGY AND CARBON

SCOPE 1 EMISSIONS BY GAS (METRIC TONNES CO2e)
IN SCOPE OUT OF SCOPE
FY15 FY16 FY17 FY18

CARBON FOOTPRINT
PER UNIT REDUCTION2
CH4 166 171 179 110

PER UNIT REDUCTION

PER UNIT REDUCTION

CHAIN IMPACTS
10% PRODUCT
CO2 35,423 37,115 39,921 41,800

MOONSHOT

FULL VALUE
N2O 35 37 38 31
TOTAL 35,624 37,324 40,138 41,941

RE100
NIKE VALUE CHAIN TERMINOLOGY
CORPORATE SERVICES
STEAM CONSUMPTION (MWh) HQs
FY15 FY16 FY17 FY18
Other Office Facilities and
Steam 1,007 614 865 764 WHQ Building Construction
Heat 0 0 0 0 Air MI
Cooling 0 0 0 0 Corporate Jets
Commercial Air Business Travel
RAW MATERIALS PRODUCTION
BIOMASS CO2 EMISSIONS (METRIC TONNES CO2) Raw Materials Production
FY15 FY16 FY17 FY18 MATERIALS MANUFACTURING
Biomass 4,696 4,254 3,051 2,422 Materials Manufacturing
MATERIALS FINISHING
Textile Dyeing and Finishing
FINISHED GOODS MANUFACTURING
FW, AP, and EQ Manufacturing
LOGISTICS
Inbound Logistics
Outbound Logistics
Distribution Centers
RETAIL
NIKE Direct
CONSUMER USE
Consumer Use
END OF LIFE
End of Life
1 Only NIKE-owned Retail (NIKE Direct) and Logistics (Distribution Centers, Inbound and
Outbound Logistics) are in scope of NIKE commitments where designated as in scope. Non-
NIKE-owned Retail and Logistics are included in the Full Value Chain Impacts.
2 Target covers Nike brand apparel and footwear only.

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ELECTRICITY CONSUMPTION (MWh) & SCOPE 2 EMISSIONS (METRIC TONNES ELECTRICITY CONSUMPTION (MWh) & SCOPE 2 EMISSIONS (METRIC TONNES
CO2e) BY COUNTRY/REGION CO2e) BY COUNTRY/REGION

FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18

Australia New Zealand
Grid Electricity 1,399 1,456 1,487 808 Grid Electricity 91 62 94 144
Total Electricity 1,399 1,456 1,487 808 Total Electricity 91 62 94 144
Location-Based 1,122 1,097 613 Location-Based
1,129 17 10 13 18
Scope 2 Scope 2
Market-Based Scope 2 1,129 1,122 1,097 613 Market-Based Scope 2 17 10 13 18
Belgium South Africa
Grid Electricity 24,022 25,445 34,135 30,399 Grid Electricity - 1,104 951 835
Onsite Solar 1592 1,418 1,624 2,579 Total Electricity - 1,104 951 835
Total Electricity 25,613 26,863 35,759 37,791 Location-Based -
1,045 965 831
Scope 2
Onsite Wind 4,814
Market-Based Scope 2 - 1,045 965 831
Location-Based 5,242 5,073 7,104 6,913
Scope 2 South Korea
Market-Based Scope 2 89 81 58 241 Grid Electricity 1,599 1,742 1,874 1,864
Brazil Total Electricity 1,599 1,742 1,874 1,864
Grid Electricity 3,155 3,110 2,178 1,939 Location-Based
886 937 972 985
Scope 2
Total Electricity 3,155 3,110 2,178 1,939
Market-Based Scope 2 886 937 972 985
Location-Based
315 422 350 304
Scope 2 United States of America
Market-Based Scope 2 315 422 350 304 Grid Electricity 285,364 318,111 337,669 357,141
Canada Onsite Solar 81 7 - -
Grid Electricity 3,582 4,972 4,786 4,332 Steam 1,007 614 865 764
Total Electricity 3,582 4,972 4,786 4,332 Total Electricity 286,452 318,731 338,534 357,904
Location-Based Location-Based
567 748 698 659 153,273 157,752 177,067 159,661
Scope 2 Scope 2
Market-Based Scope 2 179 456 354 293 Market-Based Scope 2 135,843 125,298 121,083 125,416
China Regional Extrapolation: Asia (excluding China)
Grid Electricity 45,558 51,626 53,977 59,537 Grid Electricity 38,790 42,510 44,670 46,745
Onsite Solar 48 49 1906 2,045 Total Electricity 38,790 42,510 44,670 46,745
Total Electricity 45,606 51,675 55,883 61,581 Location-Based
26,603 28,246 30,765 17,230
Scope 2
Location-Based
33,268 36,788 36,880 39,300
Scope 2 Market-Based Scope 2 26,603 28,246 30,765 17,230
Market-Based Scope 2 33,268 36,788 36,880 39,300 Regional Extrapolation: Europe
Japan Grid Electricity 62,357 67,149 71,054 74,957
Grid Electricity 6,363 6,719 7,313 7,797 Total Electricity 62,357 67,149 71,054 74,957
Total Electricity 6,363 6,719 7,313 7,797 Location-Based
21,067 21,745 22,240 22,720
Scope 2
Location-Based
3,585 3,852 4,086 4,228
Scope 2 Market-Based Scope 2 21,067 21,745 22,240 22,720
Market-Based Scope 2 3,585 3,852 4,086 4,228 Total: NIKE, Inc.
Mexico Grid Electricity 482,359 534,229 570,818 598,081
Grid Electricity 1,445 1,352 1,603 1,536 Onsite Solar 1,721 1,474 3,530 4,623
Total Electricity 1,445 1,352 1,603 1,536 Onsite Wind - - - 4,814
Location-Based Steam 1,007 614 865 764
718 653 735 708
Scope 2
Total Electricity 485,087 536,316 575,213 608,282
Market-Based Scope 2 718 653 735 708
Location-Based
250,493 262,354 287,256 259,103
Netherlands Scope 2
Grid Electricity 8,635 8,869 9,025 10,047 Market-Based Scope 2 228,680 225,772 224,489 218,240
Total Electricity 8,635 8,869 9,025 10,047
Location-Based
Scope 2
3,823 3960 4,283 4,933 SCOPE 3 EMISSIONS BY CATEGORY AND OPERATIONAL BOUNDARIES
Market-Based Scope 2 4,982 5117 4,891 5,354 EMISSIONS EMISSIONS FACTOR SOURCE
IEA World Electricity CO2 Emissions Factors
Network for Transport Measurement (NTM)
SCOPE 3 Clean Cargo Working Group (CCWG) Nominal Trade Lane Average Port – Port
U.K. Department for Environment Food and Rural Affairs (DEFRA) and the Department
of Energy and Climate Change (DECC) & GHG Protocol

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SCOPE 3 EMISSIONS BY CATEGORY AND OPERATIONAL BOUNDARIES

SCOPE 3 EMISSIONS IN SCOPE OF MOONSHOT AMBITION
FY18 METRIC TONNES
EMISSIONS
CO2e AND/OR SCOPE OF REPORTED EMISSIONS EMISSIONS CALCULATION METHODOLOGY
SOURCES
EVALUATION STATUS
UPSTREAM

Emissions data is calculated using primary activity data and extrapolations. CO2e emissions
include CO2, CH4, and N2O. Nike Brand and Converse footwear finished goods manufacturing
emissions data is derived from 100% primary data and represents nearly 90% of the emissions in
Includes emissions across Nike brands and product finished goods manufacturing. For this subset, vendors provide monthly energy consumption: from
1 - PURCHASED
engines, including from raw materials production, materials the local utility grid, onsite generators, other fuels, and purchased steam. For electricity: kWh values
GOODS AND 10,497,428
manufacturing, materials finishing, and finished goods are multiplied by CO2e emissions factors for electricity purchased from the local utility grid by the
SERVICES
manufacturing. country/region the factory resides in. For onsite generation and other fuels: CO2e emissions are
calculated using the IPCC bottoms up calculation methodology. CO2e methodologies are used for
emissions estimates outside of footwear finished goods manufacturing based on lifecycle analysis
data and employ conservative assumptions to avoid understating NIKE’s footprint.

4- Includes ~95% of global inbound transportation and ~90% Transactional data is applied to a third-party transportation carbon calculator against industry
TRANSPORTATION of global outbound transportation via the following modes of standard emissions factors. For Air: Distance traveled (km) x cargo weight (kg) x Emission factor [g
647,907
AND DISTRIBUTION transportation: air, ocean, truck, and rail. Excludes non-NIKE of CO2/ (TEU x km)]. For all other modes: Distance traveled (km) x cargo volume (TEU) x Emission
(UPSTREAM) paid freight. factor [g of CO2/ (TEU x km)].

Air CO2 emissions are estimated based on number and distance of trips. Short haul trips are less
6 - BUSINESS
75,6451 Includes emissions from commercial air travel. fuel efficient per mile flown. Longer-haul flights become less efficient due to the need to carry
TRAVEL
more fuel.

DOWNSTREAM

There is no primary emissions data available for end of life treatment of NIKE’s products. To evaluate
NIKE’s value chain footprint, we identified and quantified CO2e emissions created at each stage
of the value chain. The impact of each individual product differs considerably, based on its profile,
12 - END-OF-LIFE
These emissions are associated with the disposal of products materials used, size and weight, method of manufacture, and location of production, use and
TREATMENT OF 448,759
including landfill, recycling, and incineration. disposal. Several internal and external tools were used to develop this estimation including NIKE’s
SOLD PRODUCTS
Business and Environmental Scenario Tool (BEST), Enablon database, NIKE’s Apparel Sustainability
Index, NIKE’s Footwear Sustainability Index, and NIKE’s Materials Sustainability Index. End of Life
Stage: at the disposal stage we assumed the finished good is disposed of at the end of one year.

5 - WASTE
Emissions relative to the fate of the waste generated in our own Total HQs and DC waste not diverted from landfill multiplied by a lifecycle assessment-based
GENERATED 2,245
operations including HQs and DCs. emission factor for municipal waste sent to landfill.
IN OPERATIONS

Transactional data is applied to a third-party transportation carbon calculator against industry

9-
standard emissions factors. For Air: Distance traveled (km) x cargo weight (kg) x Emission factor [g of
TRANSPORTATION Includes emissions from non-NIKE paid freight. Excludes
113,173 CO2/ (TEU x km)]. For all other modes: Distance traveled (km) x cargo volume (TEU) x Emission factor
AND DISTRIBUTION emissions from consumers traveling to stores.
[g of CO2/ (TEU x km)]. Non-NIKE paid freight is determined by subtracting NIKE-paid inbound and
(DOWNSTREAM)
outbound freight from total units, separately.

There is no primary emissions data available from use of NIKE’s products. To evaluate NIKE’s value
chain footprint, we identified and quantified CO2e emissions created at each stage of the value
chain. The impact of each individual product differs considerably, based on its profile, materials
These emissions are associated with washing and drying
used, size and weight, method of manufacture, and location of production, use, and disposal.
NIKE’s sold apparel and socks. We assumed for the value
Several internal and external tools were used to develop this estimation including NIKE’s Business
chain footprint exercise that footwear and equipment were
11 - USE OF and Environmental Scenario Tool (BEST), Enablon database, NIKE’s Apparel Sustainability Index,
8,090,266 not washed. Based on our footprinting work, we estimate
SOLD PRODUCTS NIKE’s Footwear Sustainability Index, and NIKE’s Materials Sustainability Index. Consumer Usage:
that about 36% of the emissions throughout our value chain
Water and Energy Usage was estimated based on the following assumptions – only apparel units
are emitted during the use phase of NIKE products. These
and socks were considered. Each item was assumed washed 52 times in one year. The washing
emissions are out of scope of NIKE’s moonshot ambition.
assumptions were based on regional consumer washing practices and estimates of washing
machine types by region. CO2e was based on regional conversion factors applied to the estimated
energy usage.

1 This metric is part of Management’s Assertion on select sustainability metrics, which PwC has performed limited assurance over for the period from June 1, 2017 to May 31, 2018, as indicated in the Report of Independent Accountants.

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ENVIRONMENT

SCOPE 3 EMISSIONS – NOT RELEVANT/NOT YET CALCULATED

FY18 METRIC TONNES
EMISSIONS
CO2e AND/OR SCOPE OF REPORTED EMISSIONS EMISSIONS CALCULATION METHODOLOGY
SOURCES
EVALUATION STATUS
UPSTREAM

NIKE does not have significant investment in capital goods

2 - CAPITAL
Not relevant as most manufacturing equipment is owned and operated by N/A
GOODS
contracted factories.

3 - FUEL AND
ENERGY-RELATED NIKE does not have significant use of fuel and energy-related
ACTIVITIES Not relevant activities as our manufacturing is completed by contract N/A
NOT INCLUDED IN factories.
SCOPE 1 OR 2

Employee commuting is a relevant metric for NIKE, Inc. as

7 - EMPLOYEE Relevant, not yet we had over 14,000 employees commuting just to our World
N/A
COMMUTING calculated Headquarters daily in FY18. We have not yet calculated the
corresponding CO2 emissions for employee commuting.

8 - UPSTREAM NIKE does not have significant emissions from upstream

Not relevant N/A
LEASED ASSETS leased assets.

DOWNSTREAM

10 - PROCESSING
NIKE's products are finished consumer goods and do not
OF SOLD Not relevant N/A
undergo any additional processing once sold.
PRODUCTS

13 - DOWNSTREAM NIKE does not have significant emissions from downstream

Not relevant N/A
LEASED ASSETS leased assets.

14 - FRANCHISES Not relevant NIKE does not have significant emissions from franchises. N/A

15 - INVESTMENTS Not relevant NIKE does not have significant emissions from investments. N/A

GRI UNGC
STANDARD NUMBER GRI DISCLOSURE LOCATION AND NOTES OMISSION PRINCIPLE SDG
EFFLUENTS AND WASTE
MATERIAL ASPECTS: Effluents and Waste
Explanation of the material topic and its Issue Prioritization: page 8
103-1
GRI 103: Boundaries Minimize Environmental Impact: Waste: pages 47–50
MANAGEMENT The management approach and its Minimize Environmental Impact: Waste: pages 47–50
103-2
APPROACH components Waste
103-3 Evaluation of the management approach Minimize Environmental Impact: Waste: pages 47–50
GRI 306:
EFFLUENTS AND 306-2 Waste by type and disposal method Minimize Environmental Impact: Waste: pages 47–50 8, 9
WASTE

Additional Information
Distribution center and office waste disposal method has been determined by information provided by waste disposal contractors. In some facilities, NIKE directly contracts with disposal providers for
material-specific streams or specific containers. In other facilities, NIKE uses one provider for all waste streams.

Contract manufacturers report their solid waste generation and disposal method to NIKE in accordance with NIKE’s Waste Program, which outlines separation and handling practices for non-hazardous
waste and defines waste items and management methods.

TOTAL WEIGHT OF HAZARDOUS WASTE (TONNES)

GENERATED IN FOOTWEAR MANUFACTURING1,2
FY16 FY17 FY18
Total Weight 6,858 7,311 8,178
1  Best available data reported to NIKE by manufacturing partners of finished goods. Excluded from scope is any hazardous waste generated from non-manufacturing activities.
2  Annual compliance audits verify that our partners are meeting the requirements in the NIKE Code Leadership Standards (CLS) for suppliers. Auditors confirm that partners have obtained all required permits and that hazardous waste
vendors selected by the partners are properly qualified and licensed. The CLS also outlines storage requirements for any location that generates or stores 100 kg or more of hazardous waste each month.

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SOCIAL

GRI UNGC
STANDARD NUMBER GRI DISCLOSURE LOCATION AND NOTES OMISSION PRINCIPLE SDG
OCCUPATIONAL HEALTH AND SAFETY
MATERIAL ASPECTS: Occupational Health and Safety
Issue Prioritization: page 8
Explanation of the material topic and its
103-1 Transform Manufacturing: Sustainable Sourcing: pages 28–30
GRI 103: Boundaries
Unleash Human Potential: Priority Issues: pages 23–25
MANAGEMENT
The management approach and its Unleash Human Potential: Priority Issues: pages 23–25
APPROACH 103-2
components Culture of Health and Safety
103-3 Evaluation of the management approach Unleash Human Potential: Priority Issues: pages 23–25

We disclose Total Case

GRI 403:
Types of injury and rates of injury, occupational Incident Rate (TCIR) and
OCCUPATIONAL
403-2 diseases, lost days, and absenteeism, and Unleash Human Potential: Priority Issues: pages 23–25 Lost Time Injury Rate (LTIR),
HEALTH AND
number of work-related fatalities which is considered industry
SAFETY
standard.

TRAINING AND EDUCATION

MATERIAL ASPECTS: Workforce Development
Explanation of the material topic and its Issue Prioritization: page 8
103-1
Boundaries Unleash Human Potential: Employees: pages 14–18
GRI 103:
The management approach and its Unleash Human Potential: Employees: pages 14–18
MANAGEMENT 103-2
components People at NIKE
APPROACH
Unleash Human Potential: Employees: pages 14–18
103-3 Evaluation of the management approach

GRI 404: TRAINING Percentage of employees receiving regular

404-3 Unleash Human Potential: Employees: pages 14–18
AND EDUCATION performance and career development reviews

Additional Information
EMPLOYEES WHO RECEIVE PERFORMANCE
REVIEW (CFE RATING)
CY2017 CY2018 CY2017 CY2018
GENDER % % EMPLOYMENT TYPE % %
CFE Rating 92.21% 92.23% CFE Rating 93.67% 93.35%
Female Full-time
No CFE Rating 7.79% 7.77% No CFE Rating 6.33% 6.65%
CFE Rating 92.46% 92.63% CFE Rating 88.83% 89.34%
Male Part-time
No CFE Rating 7.54% 7.37% No CFE Rating 11.17% 10.66%
CFE Rating 92.34% 92.43%
Grand Total
No CFE Rating 7.66% 7.57%
Notes:
• Excludes temporary workers.
• With the shift in timing to Calendar Year for this report it allows us to provide information on our Annual Performance Review processes when they are complete. Previously, our data cut-off (May 31)
was in the early stages of our Performance Review cycles so we saw more employees without a performance rating. With the timing of our data being focused on later in the calendar year it allows
us to provide information once our annual processes are complete which leads to the variance from previous reports.
• Employees without a CFE include “Null” or “No Rating” values.
• Employees with a “Too New to Rate” are included with employees with a rating.

DIVERSITY AND EQUAL OPPORTUNITY

MATERIAL ASPECTS: Total Compensation
Explanation of the material topic and its Issue Prioritization: page 8
103-1
GRI 103: Boundaries Unleash Human Potential: Employees: pages 14–18
MANAGEMENT The management approach and its Unleash Human Potential: Employees: pages 14–18
103-2
APPROACH components People at NIKE
103-3 Evaluation of the management approach Unleash Human Potential: Employees: pages 14–18

GRI 405: DIVERSITY

Ratio of basic salary and remuneration of
AND EQUAL 405-2 Unleash Human Potential: Employees: pages 14–18
women to men
OPPORTUNITY

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SOCIAL

GRI UNGC
STANDARD NUMBER GRI DISCLOSURE LOCATION AND NOTES OMISSION PRINCIPLE SDG
CHILD LABOR
MATERIAL ASPECTS: Child Labor
Issue Prioritization: page 8
Explanation of the material topic and its Transform Manufacturing: Priority Issues: page 33
103-1
GRI 103: Boundaries Code of Conduct
MANAGEMENT Code Leadership Standards (CLS)
APPROACH The management approach and its Transform Manufacturing: Priority Issues: page 33
103-2
components Human Rights
103-3 Evaluation of the management approach Transform Manufacturing: Priority Issues: page 33

GRI 408: CHILD Operations and suppliers at significant risk

408-1 Transform Manufacturing: Priority Issues: page 33 1, 5
LABOR for incidents of child labor

CHEMISTRY
MATERIAL ASPECTS: Chemistry
Explanation of the material topic and its Issue Prioritization: page 8
103-1
Boundaries Minimize Environmental Footprint: Chemistry: pages 53–56

GRI 103: Minimize Environmental Footprint: Chemistry: pages 53–56

The management approach and its
MANAGEMENT 103-2 Approach to Chemistry
components
APPROACH Chemistry Playbook

Purpose Committee: page 6

103-3 Evaluation of the management approach
Minimize Environmental Footprint: Chemistry: pages 53–56

CHEMISTRY N/A Minimize Environmental Footprint: Chemistry: pages 53–56

ACTIVE KIDS
MATERIAL ASPECTS: Active Kids

Explanation of the material topic and its Issue Prioritization: page 8

103-1
Boundaries Unleash Human Potential: Community Impact: pages 19–22
GRI 103:
MANAGEMENT
The management approach and its Unleash Human Potential: Community Impact: pages 19–22
APPROACH 103-2
components Community Impact
Purpose Committee: page 7
103-3 Evaluation of the management approach
Unleash Human Potential: Community Impact: pages 19–22
ACTIVE KIDS N/A Unleash Human Potential: Community Impact: pages 19–22

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