“Sustainability is not a problem to be solved, it’s a condition to be created,” sustainable business expert Darcy Winslow told a packed room of investors at Julius Baer’s recent Next Generation Summit in Zurich, Switzerland. Drawing on her experience of spearheading Nike’s move to set social and environmental responsibility at the heart of its business, Winslow made a compelling case for inspiring business leaders to strive for positive, systemic change.
“We must set a new trajectory if we are to address the degradation of ecosystems, climate change and social inequality,” she explained. “Now, more than ever, we need leaders who can step outside their bubbles, see the larger system and collaborate across boundaries to create the future we want.”
Transforming business-as-usual is an uphill struggle, and as Winslow revealed, requires courage, determination and a complete re-envisioning of values, relationships and processes throughout the value chain. Undertaking this challenge is a matter of survival for today’s companies. And importantly, it opens up a myriad of new possibilities, setting businesses on a course for sustainable growth.
Referring to what she termed the five “gears” of sustainable leadership, with “one” being compliance and “five” being a purpose-led, sustainable organisation, Winslow said she believed most companies are still at level two. Nike is higher up the ladder, but this has not always been the case.
In a meeting with Cradle to Cradle pioneers Bill McDonough and Michael Braungart, she and her colleagues were faced with the simple question: “Do you know what’s in your products?”. They had to admit that they did not.
“That day, my life changed forever,” Winslow said. “I made it my mission to change the path we were on.”
Winslow took the issue straight to the top, going to the then president and COO of Nike with the view that achieving social and environmental responsibility could only be achieved by involving the whole business.
With no time to lose, she assembled a capable team and created some ambitious 2020 goals designed to crush waste, eliminate harmful toxics, create closed loop systems, and tackle sustainable consumption. The big hurdle was how to get there. Could an intensely competitive company be distracted from its relentless pursuit of product innovation?
“People thought we had lost our minds!” she told us. Making the business case for change was fundamental to changing their perceptions. When the CFO tasked the team with demonstrating return on investment for all 50 prototype projects that she and her team had proposed, Winslow knew this was their chance to put triple bottom line accounting to the test.
“I realised I had to become bilingual,” enthused Winslow. “We had to demonstrate the company’s social and environmental impacts in financial terms.” Using the Nike Pegasus trainer as a baseline, she discovered that for every pair of shoes manufactured, a third shoe’s worth of materials was discarded. That amounted to almost $7m (£4.5m) of materials wasted annually.
This was the ultimate wake-up call and Winslow and her team were off and running. Their second port of call was with the organisation’s heroes – its designers. By talking the language of innovation, Winslow sought their support in cultivating practical, sustainable design strategies.
The Nike Flyknit shoe is a tangible result of this legacy of innovation. Launched in 2013, the knit technology used in these shoes cuts waste arising in a typical shoe by around 80%.
Taking the collaboration further afield into Nike’s supply chain, Winslow and her team began approaching Nike’s key chemicals suppliers to forge a full understanding of the chemicals they were using. They compiled the company’s first Restricted Substances List (RSL), substances they wished to eliminate from their products.
However, designing out chemicals was no easy task. Removing the toxic gas SF6 from Nike Air shoes, for example, required $100m (£65m) and the equivalent of 305 years of employee time, Winslow revealed. “The ROI was that we got to stay in business in Northern Europe,” she said.
Increasingly, Winslow realised that the scale and complexity of the social and environmental challenges at hand were too great for one company to tackle alone. In order to thrive in the long term, Nike would need to influence the wider system. Therefore, at the turn of the millennium, she started exploring environmental problems with other companies.
Motivated by the need to achieve scale and impact by working collectively, many brand and multi-stakeholder groups have since formed to raise the bar for sustainable practices in the footwear and apparel sectors. These include the Leather Working Group, the Zero Discharge of Hazardous Chemicals (ZDHC) collaboration, and theSustainable Apparel Coalition (SAC).
While systems thinking is beginning to make its mark, there’s still a long way to go to creating the circular economy we ultimately need, Winslow believes. As the managing partner of the Academy for Systemic Change, she is currently focusing her efforts on inspiring and building the capacity of tomorrow’s leaders to help accelerate the pace of change.
In the words of Nike’s mantra, she shared: “There is no finish line.”
This article was originally published on the Guardian Sustainable Business site.