Nike has just released its most recent sustainability report, and it is quite possibly one of the most compelling and engaging I have ever come across. Few corporate social responsibility reports keep me up past my bedtime: in fact, many hasten that hour. But Nike has launched an interactive sustainability report that educates, innovates and brings sustainability alive.

Not all of the news coming from Nike’s Beaverton headquarters is sunny. Excessive overtime is still a nagging problem in the company’s contract factories, and Nike admits many of the factors are within the company’s control. The complete elimination of hazardous chemicals from its supply chain will take time. And the company’s water footprint is still huge. But Nike is charging ahead with a sustainability agenda that just a few years ago would have seemed unthinkable. And rather than taking a self-congratulatory tone, Nike draws stakeholders in on its journey to share the company’s successes and shortcomings.

One example of how Nike engages stakeholders is by demonstrating the impact that the 16,000 various materials used to manufacture its sporting apparel have on the environment. A tour of the Nike Material Index (NMI) allows users to compare organic versus conventionally grown cotton, learn about recycled polyester and how it outperforms nylon, and explains the various components that comprise a pair of athletic shoes. While users design their version of green athletic fashion, they learn how Nike assesses the overall sustainability performance of the materials based on energy, chemistry, water and waste. Jargon that often weighs down sustainability reports is replaced, dare I say, with fun.

Such an exercise is important because it reminds customers about the challenges that emerge with the convergence of performance and sustainability. Leather, for example, is sourced from tanneries that are certified by the Leather Working Group (LWG). More consumers would rather avoid leather altogether, and Nike is open to synthetic alternatives. But all synthetics on the market use solvents that are harmful to the environment. To that end, Nike in some ways is not just a branded athletic wear company, but a chemistry research and development firm. Curiously, Nike is becoming a leader in green chemistry that would make companies like Dow Chemical squirm.

From waste diversion to improving labor rights to revamping its manufacturing operations, Nike’s driving goal is accomplish what seems impossible: stay profitable in a world with constrained resources. The company has structured its long term plan at three levels: aim for what it aspires to do, set targets and demonstrate commitments for each goal. Such an approach works because it keeps the company focused on its long term goals, holds the company accountable to what it has promised stakeholders and prevents Nike from setting expectations too high.

Start exploring the company’s corporate responsibility report and see for yourself. What Nike has accomplished is far more than just demonstrating that it is a clothing manufacturing company that is doing good. In fact, exploring the site makes you wonder why Nike still bothers with shoes and athletic gear - it should become a sustainability strategy consulting firm in its own right.

Published earlier today on Triple Pundit. Reposted on PSFK on May 4, 2012.

Photo courtesy Nike.