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The Project
Ren Energy helped Nike with comprehensive scope 3 supply chain renewable energy management and procurement in China and Vietnam:
- Supply Chain Data Management + Analysis
- Scope 3 Renewables Strategy
- Supplier Engagement
- Renewables Procurement
- RFP Development + Contract Negotiation
The Context
In 2015, Nike, the world leader in footwear and apparel had a vision, but not a plan. The company needed a high-impact solution to meet their aggressive climate targets—63% emission reductions by 2030 and net zero by 2050. In order to achieve these ambitious goals, it turned to tackling scope 3 supply chain emissions, which undeniably composed the largest majority of their emissions. Roughly 90% of global emissions originate from corporate supply chains (Source: CDP 2020 Global Supply Chain Report).
The Options
There are a variety of avenues to tackle scope 3 emissions: renewables, transportation, waste, product footprinting, etc. However, the most direct and immediate way to reduce scope 3 emissions is to source renewable energy. This allows global companies, like Nike, to reduce their scope 3 emissions by a third or more—the highest-impact climate solution available (Source: World Economic Forum 2021 Net Zero Challenge: The Supply Chain Opportunity).
The Result
By 2018, Nike’s supply chain was sourcing 18% of its energy from renewable sources—no small feat given the lack of data or direction when Ren Energy started working with Nike just two years earlier. That same year, Nike was ranked #1 in the world for its corporate renewable energy program and approach to tackling scope 3 emissions.
The How
Ren Energy led and supported Nike through a complex, multi-phase scope 3 decarbonization process over the course of two years:
- Project Scoping: Nike began an in-depth discovery process to understand their opportunity, scope and key priorities. As the company worked with 12,000+ factories in 36 countries, they decided to pursue renewables projects at factories they envisioned partnering with long-term—what they called their “Focused Factory List”.
- Data Management + Analysis: Ren Energy helped Nike acquire the energy data and buy-in required by facilitating interactions with key stakeholders—from factory floor managers to factory group leaders to internal Nike decisionmakers. The data analysis revealed the optimal renewables technology for groups of factories: rooftop solar.
- Scope 3 Renewables Strategy: Ren Energy provided Nike a strategic roadmap detailing high-impact recommendations for next steps—countries of focus, procurement timing, renewables options. The foundational strategy driving that roadmap was a novel renewables approach: aggregated portfolios.
- Supplier Engagement: With an initial focus in China, Ren Energy identified a portfolio of Chinese facilities with credit ratings and energy use to warrant renewables procurement. By bundling these various Chinese facilities into a single portfolio—called aggregation—economies of scale were created to reduce costs and maximize impact.
- RFP Development: Ren Energy helped guide Nike through policy headaches, industry jargon, developer bids and number crunching to develop and execute their first RFP in China. Considerations such as land constraints, resource availability and factories spread across different grids impacted the type of developer selected.
- Renewables Procurement: Over two years, Ren Energy helped Nike release numerous aggregated RFPs and solarize dozens of global factories: China (14 factories), Vietnam (16 factories) and Indonesia (12 factories) as well as factories in Brazil, Italy, Bosnia, India, Sri Lanka, Turkey, Jordan, Egypt, Mexico, Honduras and more.
Next Steps
Nike has continued to make progress on its climate goals while accounting for policy evolution, regulatory shifts and advances in technology. For those driven organizations with ambitious climate goals, it only makes sense logistically and financially to leverage the benefits that aggregated procurement provides: scale, speed, impact and cost reductions. Nike reached #1 by embracing this novel approach to renewables; will your company be next?
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