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PURPOSE PURPOSE MOVES MOVES US US FY19 NIKE, Inc. Impact Report SAE SHIGEMOTOCONTENT INTRODUCTION 05 Letter From Our CEO 06 Report Content 07 Targets Summary 03 About This Report OUR APPROACH 64 Governance 65 Issue Prioritization 66 Priority Issue Definitions UNLEASH HUMAN POTENTIAL 10 FY19 Highlights 11 Employees 17 Community Impact 22 Unleash Human Potential: Priority Issues TRANSFORM MANUFACTURING 26 FY19 Highlights 27 Sustainable Sourcing 30 Engaged Workforce 32 Accelerating Industry Change Through Partnerships 33 Transform Manufacturing: Priority Issues MINIMIZE ENVIRONMENTAL FOOTPRINT 35 FY19 Highlights 36 Product 39 Materials 42 Energy and Carbon 49 Waste 53 Water 56 Chemistry 60 Minimize Environmental Footprint: Priority Issues APPENDIX 68 PwC Assurance Report 69 NIKE, Inc. Management Assertion 74 Global Reporting Initiative (GRI) Index NIKES JUST DO IT DAY p.16 p. 27 p. 40 2019 WOMENS WORLD CUP SUSTAINABLE SOURCING FY19 NIKE, Inc. Impact Report 2NIKE, Inc.s (“NIKE”) mission as a brand is to bring inspiration and innovation to every athlete 1in the world. Our purpose is to unite the world through sport to help create a healthy planet, active communities and an equal playing field for all. We do that by building creative and diverse global teams, making a positive impact in the communities where we live and work, and by making products responsibly and more sustainably. A commitment to transparency, accountability, and impact drives us as reflected by our approach to sharing our priority issues and reporting our progress toward NIKEs 2020 targets. 2 The targets and measures in this NIKE, Inc. Impact Report represent our public commitments and are an aggregated view of our long-term goals to meet stakeholder 3expectations and align with NIKEs business priorities. Building on NIKEs reporting tradition since 2001, we expect to report progress against our social and environmental targets and priority issues annually. We know that we may face unforeseen and untimely setbacks, and that factors outside of our control may impact our efforts and intentions. We consider our goals aggressive but achievable. We have plans in place to achieve these goals, knowing progress depends on end-to-end execution. Progress will not be linear. That said, we will amplify our successes and learn from our setbacks and failures. These goals are integral to our Purpose and we will pursue them relentlessly. In this report, we cover NIKEs fiscal year 2019 (June 1, 2018, through May 31, 2019), with the notable exception of calendar year 2019 data for the Employee and Occupational Health and Safety sections. We will refer to the fiscal year as FY19 and the calendar year as CY19 for the rest of the report. Unless otherwise stated, the baseline for our targets is FY15. 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. For news, updates, and more detail about NIKE, please visit purpose.nike. This report has been prepared in accordance with the GRI STANDARDS: CORE option. 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 previously non-public financial and statistical information. 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, NIKE cofounder and celebrated track coach. 2 Definitions of Priority issues on page 66. 3 Stakeholders are defined as customers, consumers, shareholders, employees, communities, NGOs, and academics. ABOUT THIS REPORT Introduction FY19 NIKE, Inc. Impact Report 3 Unleash Human Potential Transform Manufacturing Our Approach Appendix Minimize Environmental FootprintINTRODUCTION INTRODUCTION SKY BROWN FY19 NIKE, Inc. Impact Report 4 Unleash Human Potential Transform Manufacturing Introduction Our Approach Appendix Minimize Environmental FootprintLETTER FROM OUR CEO NIKE exists to progress sport. But in recent years, we also face a broader challenge: to help protect sport itself. Today, thats why were thinking even bigger than delivering inspiration and innovation for athletes. To best serve future generations, were also bringing the best of NIKE to respond to some of the most pressing challenges of our time. NIKEs purpose is to unite the world through sport to create a healthy planet, active communities and an equal playing field for all. These are more than aspirations they are foundational priorities that shape decisions across every aspect of our business. As of this FY19 NIKE, Inc. Impact Report, I have been President and CEO of NIKE for less than two months. Yet the extraordinary impact NIKE can have is already clear to me. This is the power of sport. Like so many across our company, I came to NIKE because I believe in sport. I believe in sports capacity to transform lives and communities. And at a time when our society is more fragmented than ever, when polarization is wearing down our institutions and climate change is threatening our very survival, I believe in the power of sport to bring us together to change the world for the better. Nowhere does that capacity for impact matter more urgently than with regard to our changing planet. When it comes to the growing climate emergency, the data is crystal clear and so too are the voices of our athletes. As marathon start times get moved into pre-dawn hours and players and fans suffer from heat exhaustion due to extreme weather conditions, those who work in sport see first-hand the damaging effects of climate change. This crisis is affecting the athletes we serve not someday, but right now and in turn compelling us to swiftly evolve our business. If there is no planet, there is no sport. It is this understanding that drives the urgency of our commitment to sustainability and impact. In FY19, we made some incredible progress toward our goals. We invested more than $81 million to drive impact in our communities and got more than 17 million kids active. When we help unleash the power of play and sport for kids, we can change lives. Thats why our priority in our community work is to get kids moving. And because a good coach can make all the difference in a kids experience weve helped train nearly 100,000 community coaches through NIKE-supported programming. One particular focus for us is increasing the number of female coaches, as we know they are such powerful catalysts in inspiring more girls to get active. From partnering with community organizations to recruit and train female coaches to launching a training guide with the United States Olympic and Paralympic Committee to help all coaches create a girl-inclusive culture, we continue to invest in creating safe spaces where girls can learn, grow and become the leaders we know they can be, in sport and in life. Weve previously set a target to reach 100% renewable energy in our owned or operated facilities by 2025. We recently achieved 100% renewable energy across North America an impressive stride toward our global energy goals. We are also working to eliminate footwear manufacturing waste to landfill or incineration. In FY19, 99.9% of footwear manufacturing waste was recycled by contract factories or converted to energy. In addition, we are increasing the use of more sustainable materials across our products, transforming some 1 billion plastic bottles per year into recycled polyester for jerseys as well as other materials for both apparel and footwear. Across our supply chain, were also investing in creating a skilled, valued, and engaged workforce. One key, we believe, is enabling contract factory workers to share in productivity gains. This year, we scaled our supplier Engagement and Wellbeing Survey, which provides a holistic, comprehensive view of the worker experience and captures an actionable data set for our suppliers. In FY19, we increased participation in the survey to 45 facilities, nearly doubling the reach to 270,000 people in their combined workforce. We also continue to think critically about the change we want to drive inside NIKE. In FY19, we maintained the global pay equity ratio for men to women, and white to underrepresented groups in the U.S., that we achieved last year. Over the past year, we increased VP-level representation for women by 3 percentage points (p.p.) to 39% globally and for U.S. underrepresented groups by 2 p.p. to 21%. While this is good progress, we know there is more work to do. We will continue to increase representation and strengthen our culture of belonging. And we will continue to strive to bring sport to kids and communities everywhere by scaling more sustainable solutions that teams across NIKE are tirelessly developing every day. We will continue to innovate for all athletes everywhere to help ensure an equal playing field for all and to challenge existing systems while we drive toward a more circular future. To me, the same qualities that have made NIKE the worlds leader in sport our boldness, our creativity, our ambition are the same qualities that position us for wider impact in the face of todays global challenges. This is why Im so hopeful. Already, I can see the meaningful difference that our teams are making in the world for our people and our planet. The stakes couldnt be any higher. And yet, the opportunities couldnt be any greater. Like so much else at NIKE, its not enough to be in the game. At NIKE, we lead. And as we challenge ourselves to always do better and think bigger, we can and will create the future we want to see. John Donahoe President and CEO FY19 NIKE, Inc. Impact Report 5 Unleash Human Potential Transform Manufacturing Introduction Our Approach Appendix Minimize Environmental Footprint IntroductionREPORT CONTENT The FY19 NIKE, Inc. Impact Report focuses on 2020 Targets and Priority Issues most relevant across our value chain and to our stakeholders.New Priority Issues FY19 PRIORITY ISSUES 2020 TARGETS AND MEASURES UNLEASH HUMAN POTENTIAL MINIMIZE ENVIRONMENTAL FOOTPRINT TRANSFORM MANUFACTURING Chemicals Management Circular Systems Design Climate Change Risks Energy GHG Emissions Material Waste Materials Sourcing Water Use Active Kids Compensation Diversity and Equal Opportunity Ethical Conduct Occupational Health & Safety Workforce Development Child Labor Forced Labor TRANSFORM MANUFACTURING UNLEASH HUMAN POTENTIAL PRIORITY ISSUES MINIMIZE ENVIRONMENTAL FOOTPRINT Employees Target Attract and develop an increasingly diverse, engaged, and healthy workforce Measure Provide visibility to our diversity and inclusion progress Provide comprehensive, competitive, and equitable pay and benefits Invest in our employees through growth and development and wellbeing initiatives 4 Community Impact Target Invest a minimum of 1.5% of pre-tax income to drive positive impact in our communities Measure Get kids (ages 712) moving through play and sport Inspire a majority of NIKE employees to engage with their communities and support their giving of expertise, time, and money Drive sustained community impact in primary markets and sourcing backyards Product Target Deliver products for maximum performance with minimum impact, with a 10% reduction in the average environmental footprint Measure Greater than 80% of all NIKE product will be scored on sustainability performance Materials Target Increase use of sustainable materials in footwear and apparel Measure Source 100% of our cotton more sustainably across NIKE Carbon and Energy Target Reach 100% renewable energy in owned or operated facilities by the end of FY25 and encourage broader adoption as part of our effort to control absolute emissions Measure Decrease energy use and CO 2 e emissions 25% per unit in key operations Decrease energy use and CO 2 e emissions 35% per kg in textile dyeing and finishing processes Waste Target Eliminate footwear manufacturing waste to landfill or incineration, while continuing to reduce overall waste Measure Reduce waste index by 10% in footwear manufacturing, in distribution centers (DCs) and headquarters (HQs) Increase landfill diversion at DCs and HQs 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 (L/kg per unit of production) Measure Build resilience through supplier water risk-mitigation plans with material processors Chemistry Target Enable Zero Discharge of Hazardous Chemicals (ZDHC) Measure 100% compliance with NIKE Restricted Substance List (RSL) 100% compliance with ZDHC Manufacturing Restricted Substances List (MRSL) Achieve better chemical input management through scaling more sustainable chemistries Lead industry change through collective action 100% of focus suppliers meeting NIKEs wastewater quality requirements for textile dyeing and finishing processes Sustainable Sourcing Target Source 100% from factories that meet our definition of sustainable Measure Elevate a culture of health and safety Eliminate excessive overtime (EOT) Engaged Workforce Target Ensure contract factory workers share in productivity gains Measure Work with factories to develop and test new benefits and compensation models for their workers that can be scaled in the supply chain Deliver improvements in key measures: unplanned absenteeism, turnover, and contract factory worker engagement and wellbeing Partnerships to Accelerate Industry Change Target Establish partnerships that support the needs of workers both inside and outside of the factories Measure Scale services to support management and workers for improved engagement and wellbeing 4 This measure was updated to better reflect our strategic approach to employees. FY19 NIKE, Inc. Impact Report 6 Unleash Human Potential Transform Manufacturing Introduction Our Approach Appendix Minimize Environmental FootprintTARGETS SUMMARY Metric Unit of Measurement FY15 Baseline
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