Nike, Inc.
Published on Dec 09, 2015
Water Supply Chain Risks and Opportunities
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PRESENTATION OUTLINE
Nike, Inc.
Water Consumption Opportunities
Nike’s FY12-13 CR Report states of their environmental value chain footprint of materials, 83% is water.
Photo by ξωαŋ ThΦt (slowly back...)
Water Usage
- 87% used in cotton-growing raw materials stage
- 700 gallons to produce one t-shirt
Growing cotton represents 87% of water use of raw materials, and accounts for 63% of water use across the entire value chain.
It takes 700 gallons of water to grow the cotton for one t-shirt.
It takes 700 gallons of water to grow the cotton for one t-shirt.
19.7 Billion
Total Gallons in FY13
That equals 19.7 billion gallons of water to grow the cotton used in FY13.
The annual sustainability report states, "it is difficult for us to influence water-use practices far upstream in our supply chain, like growing cotton". Therefore water reduction efforts have been focused on manufacturing.
The annual sustainability report states, "it is difficult for us to influence water-use practices far upstream in our supply chain, like growing cotton". Therefore water reduction efforts have been focused on manufacturing.
Cotton Sources
- China - world's largest cotton producer
- Other - India and Pakistan
Although Nike does not report where they source cotton, China is the world's largest cotton producer.
Smaller world suppliers include India and Pakistan.
With so much of the world's cotton being sourced from one area of the globe, comes a number of inherent risks.
Smaller world suppliers include India and Pakistan.
With so much of the world's cotton being sourced from one area of the globe, comes a number of inherent risks.
Water Consumption in China
- 62% of water is used for agriculture
- 45% of agricultural water is lost before it reaches crops
- Between 2000 and 2010 urban water consumption increased by 60%
Currently, 62% of China’s water is used for agriculture. In the agricultural sector, demand for water for irrigation is currently about 400 billion m³, but this is projected to reach 665 billion m³ by 2030. Yet agriculture water usage is extremely unproductive, with 45% of agricultural water lost before it even reaches crops.
China’s growing population in urban areas is also requiring more water per capita. The World Bank estimated that between 2000 and 2010 China’s urban water consumption increased by 60%.
China’s growing population in urban areas is also requiring more water per capita. The World Bank estimated that between 2000 and 2010 China’s urban water consumption increased by 60%.
Water Risks
- 400 cities face water shortages
- 300 million people drink water contaminated by agricultural chemicals
- Water used for industry is 70 times more financially productive
400 of China’s cities face water shortages, and over 300 million people drink water contaminated with agricultural chemicals and other pollutants.
While water becomes increasingly scarce, the agricultural sector will face escalating competition from industrial production whose water usage is 70 times more financially productive.
While water becomes increasingly scarce, the agricultural sector will face escalating competition from industrial production whose water usage is 70 times more financially productive.
Water Conservation Benefits
- Risk mitigation
- Deter depletion of aquifers and lakes
- Ecological conservation
- Drought aversion
- Prevent political conflict
The opportunity to assist China in conserving water has many benefits.
First and foremost, it will mitigate the risk of cotton shortages and rising prices.
Massive irrigation has depleted aquifers and lakes. Groundwater usage has almost doubled since 1970.
China has remained a largely agrarian society whose growth has been maintained by clearing forests and draining swamps and wetlands.
Dissection of water resources has caused increasing drought challenges.
The Qinghai-Tibetan Plateau is a source of rivers that reach India, Bangladesh, Burma, Bhutan, Nepal, Cambodia, Pakistan, Laos, Thailand and Vietnam. China's damming and use of these waters is likely to increase tension with these countries.
China's damming and use of these waters is likely to increase tentions with these countries
First and foremost, it will mitigate the risk of cotton shortages and rising prices.
Massive irrigation has depleted aquifers and lakes. Groundwater usage has almost doubled since 1970.
China has remained a largely agrarian society whose growth has been maintained by clearing forests and draining swamps and wetlands.
Dissection of water resources has caused increasing drought challenges.
The Qinghai-Tibetan Plateau is a source of rivers that reach India, Bangladesh, Burma, Bhutan, Nepal, Cambodia, Pakistan, Laos, Thailand and Vietnam. China's damming and use of these waters is likely to increase tension with these countries.
China's damming and use of these waters is likely to increase tentions with these countries
Benchmarks
- GAP
- Kraft
- Starbucks
- Kellogg's
Benchmarking and best practices from multinational organizations who have successfully applied water conservation efforts can be utilized as resources in formulating a plan of action.
Potential Partners
- BSR Sustainable Water Group
- U.N. Water for Life
Nike can partner with organizations who have an interest in assisting organizations facilitate water reduction efforts.
BSR has formed a Sustainable Water Group and has assisted multinational organizations formulate strategies.
The United Nations has declared 2005-2015 the International Decade for Action ‘Water for Life’. They have set lofty goals in water conservation. Forming a partnership with a high-profile organization such as Nike would be mutually beneficial.
BSR has formed a Sustainable Water Group and has assisted multinational organizations formulate strategies.
The United Nations has declared 2005-2015 the International Decade for Action ‘Water for Life’. They have set lofty goals in water conservation. Forming a partnership with a high-profile organization such as Nike would be mutually beneficial.
China and beyond
Let's better the lives of millions
