nike ethical issues case study

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Nike lawsuit records allege culture of sexism, bullying and fear of retaliation

5,000 pages of records detail how female employees were concerned management were unlikely to address concerns

A long-running sexual harassment and gender discrimination lawsuit against Nike has produced more than 5,000 pages of records, including surveys of female employees that allege sexist attitudes and behavior at the sportwear giant alongside corporate bullying and fears of retaliation.

The documents, which date back to 2018, detail how female employees at the company were concerned that Nike’s management were unlikely to address their concerns.

In one survey, obtained by the Business Insider, an employee wrote that she had been directed by male co-workers to “dress sexier”; another identified certain executives as “well known philanderers with lower level employees whom they exert influence and power over”.

In a third entry, an employee said that she had witnessed a male executive receiving oral sex from a lower-ranking female in the company gym. Another alleged that “sloppy drunk” men embraced female co-workers or invited them to “work dinners”.

A fifth respondent quoted a male manager saying: “No one gives a fuck about female empowerment.”

The so-called Starfish surveys were delivered to the chief executive, Mark Parker – who has since become Nike’s executive chairperson – in March 2018, prompting news reports and company efforts to reform Nike’s alleged “boys’ club” culture.

But the surveys themselves remained out of sight until they were unsealed after a legal challenge by Insider, the Oregonian, and the Portland Business Journal for a protective order to be lifted on a lawsuit that seeks to expand the number of plaintiffs from 14 to a class-action case involving roughly 5,000.

The court’s release of about 10 surveys may amount to around a third of those taken, according to the publication. Nike, headquartered in Beaverton, Oregon, has said it does not comment on active litigation.

But Nike has previously said that inappropriate behavior at the company involved an “insular group of high-level managers, in pockets of the organization” who had “protected each other and looked the other way”.

In the surveys, one female employee described Nike as “a giant men’s sports team, where favoritism prevails and females couldn’t possibly play in the sandbox”.

Others said they had doubted Nike’s human-resources department would act on their concerns. “[Employee resources] and HR at this company are a joke,” one said.

After the surveys were delivered to Nike, Parker announced a management reshuffle and responded to employees with an apology: “Over the past few weeks, we’ve become aware of reports occurring within our organization that do not reflect our core values of inclusivity, respect and empowerment.”

The company has since made progress on pay equity and toward gender-parity in executive positions. Soon after the scandal broke, Nike announced 7,000 workers would get raises . Women now number 43% of vice-presidents at the company, up from 36% four years ago, according to the company .

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Governance and Sustainability at Nike (A)

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About The Authors

Lynn S. Paine

Nien-he Hsieh

Related work.

• June 2013 (Revised September 2016)
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Governance and Sustainability at Nike (B)

Governance and sustainability at nike (a) and (b).

• Governance and Sustainability at Nike (B)  By: Lynn S. Paine, Nien-he Hsieh and Lara Adamsons
• Governance and Sustainability at Nike (A) and (B)  By: Nien-hê Hsieh
• Governance and Sustainability at Nike (A)  By: Lynn S. Paine, Nien-hê Hsieh and Lara Adamsons

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Case Study: Just Do It? Nike, Social Justice, and the Ethics of Branding

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BY HOLLAND J. SMITH & SCOTT R. STROUD

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In September of 2018, Nike unveiled their 30 th anniversary “Just Do It” campaign, featuring prominent athletes such as Serena Williams, LeBron James, Lacey Baker, and Odell Beckham Jr. Also featured in the series is former San Francisco 49ers quarterback turned activist Colin Kaepernick, who has been a controversial figure since early August of 2016 when he protested racial injustice in America by sitting and later kneeling during the national anthem at the start of football games. Kaepernick’s Nike advertisement, which he posted to social media sites on September 3, 2018, displays a close-up image of his face with the words “Believe in something. Even if it means sacrificing everything” written across the image. Some have praised the advertisement as taking a stand in the nationwide debate over the state of minority rights while others have been concerned with Nike’s movement into the arena of political advocacy.

Gino Fisanotti, Nike’s vice president of brand marketing for North America, defended the company’s featuring of Kaepernick, who has not played in the NFL since the 2016 season when he refused a contract with the 49ers: “We believe Colin is one of the most inspirational athletes of this generation, who has leveraged the power of sport to help move the world forward.” Additionally, many high-profile athletes and celebrities have voiced their support for Nike and Kaepernick, including LeBron James and Serena Williams, both outspoken figures about social justice in their own right. “He’s done a lot for the African American community, and its cost him a lot. It’s sad,” Williams said of Kaepernick. “Having a huge company back him,” she continued, “could be a controversial reason for this company, but they’re not afraid. I feel like that was a really powerful statement to a lot of other companies.”

Other observers see Nike’s move from the commercial to the political as potentially concerning. Michael Serazio worries that this is just another sophisticated trick from a corporate powerhouse: “Getting us to think we’re making a statement by buying Nike is the long con advertising has played, and it has played it well.” Increasingly, brands are giving in to a recent demand for politicization, forcing consumers to question the political participation of various corporations. Some argue that Nike is using a popular movement to increase its own sales, and taking advantage of the prestige and celebrity status of its minority athletes while doing so. Another worry is that it distracts attention from how Nike products are made, often by workers in difficult working conditions in developing countries. As Serazio puts it, the new campaign risks diverting our focus from “the marginalized who make stuff rather than the posturing it affords those privileged enough to own it.”

The advertisement campaign is a risky move for Nike, who might garner heightened attention to its products and brand, but who also runs the risk of alienating part of its consumer base by becoming too politicized. Swaths of the football-watching public, and public at large, are divided by the anthem protests carried on by Kaepernick and others. By featuring the originator of this series of protests, many fans might view Nike as standing with black athletes and their concerns. Yet others may view the advertisement as an attempt to profit off of a protest that strikes at the heart of patriotic values that some hold dear. Some owners of Nike products even illustrated their disgust with the campaign by burning their shoes, and then subsequently posting the flaming images on social media. So far, however, Nike has not sacrificed anything due to the gamble that this advertising campaign represents: Nike stock is up 5% since the advertisement hit the public, representing $6 billion increase in Nike’s market value.

Nike’s campaign was meant to garner attention and make a statement on its 30 th anniversary. It succeeded at accomplishing these goals. But many are still wondering: was Nike primarily interested in taking a courageous stand on an important political issue of our time, or were they simply using Kaepernick as a clever ploy to sell more shoes?

Discussion Questions

• Should a company like Nike get involved in matters of political controversy and social justice?
• Is Nike misusing Kaepernick and the NFL protests in its recent campaign? If you judge this to be the case, what other ways could Nike do if they wanted to bring attention to these issues and protests?
• Do you think that these advertisements will hurt Nike’s brand or bottom line? Do you think this is an important ethical consideration for Nike?
• Should companies take stands on controversial debates orbiting around justice and the public good in their advertisement campaigns? Why or why not?Nike clearly has the ability—and right—to take a stand on this issue. What should the virtuous consumer do in reacting to Nike’s campaign? What about if they disagree with Nike’s stance?

Further Information

Anderson, Mae. “Good for business? Nike gets political with Kaepernick ad.” September 4, 2018. Available at: https://www.apnews.com/6aaced14b24d4622aefeb44d3b17c2d6

Belvedere, Matthew J. “Sorkin: Nike’s Kaepernick ad decision was based on ‘attracting big name athletes’ who side with his cause.” September 7, 2018. Available at: https://www.cnbc.com/2018/09/07/sorkin-nike-kaepernick-ad-based-on-attracting-big-name-athletes.html

Boren, Cindy. “As Trump tweets, Colin Kaepernick shares new Nike ad that reportedly will air during NFL opener.” Washington Post. September 5, 2018. Available at: https://www.washingtonpost.com/news/early-lead/wp/2018/09/05/trump-says-nike-is-getting-absolutely-killed-over-colin-kaepernick-ad-renews-attack-on-nfl-players/?utm_term=.59e131677236

Reints, Renae. “Colin Kaepernick Pushes Nike’s Market Value Up $6 Billion, to an All-Time High.” Fortune. September 23, 2018. Available at: http://fortune.com/2018/09/23/nike-market-value-colin-kaepernick-ad/

Rovell, Darren. “Colin Kaepernick part of Nike’s 30th anniversary of ‘Just Do It’ campaign.” ESPN . September 3, 2018. Available at: http://www.espn.com/nfl/story/_/id/24568359/colin-kaepernick-face-nike-just-do-30th-anniversary-campaign

Serazio, Michael. “Nike isn’t trying to be ‘woke.’ It’s trying to sell shoes.” Washington Post. September 5, 2018. Available at: https://www.washingtonpost.com/outlook/2018/09/05/nike-isnt-trying-be-woke-its-trying-sell-shoes/?noredirect=on&utm_term=.945885f31a0a

• Holland J. Smith is a research intern for the Media Ethics Initiative at the University of Texas at Austin. Scott R. Stroud is the Program Director for Media Ethics at the Center for Media Engagement, University of Texas at Austin. As the director of the Media Ethics Initiative, he supervises the creation of pedagogical materials and the sponsoring of events related to media ethics. Stroud is also the editor of Media Ethics.

More case studies and media ethics resources can be found at www.mediaethicsinitiative.org . Case studies produced by the Media Ethics Initiative remain the intellectual property of the Media Ethics Initiative and the University of Texas at Austin. They can be used in unmodified PDF form in classroom settings. For use in publications such as textbooks and other works, please contact the Media Ethics Initiative.

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The Kegley Institute of Ethics, California State University, Bakersfield

The Moody College of Communication, University of Texas at Austin

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The case is set in January 2020 and the case protagonist is John Donahoe, Nike's new CEO. Nike is the largest company worldwide in the athletic footwear, apparel, and equipment business. The case…

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• Publication Date: Oct 26, 2019
• Discipline: Strategy
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The case is set in January 2020 and the case protagonist is John Donahoe, Nike's new CEO. Nike is the largest company worldwide in the athletic footwear, apparel, and equipment business. The case focuses on the challenges Donahoe faces as he attempts to drive Nike to the goal of $50 billion in annual revenues by 2021. The case focuses on Nike's competition, the convergence of technology with apparel and footwear, as well as the company's corporate social responsibility issues. Donahoe has to address internal as well as external challenges. Donahoe was appointed CEO at a time when the Oregon sports and apparel company faces a number of controversies, including when Nike-sponsored athletes were caught up in scandals; the ban of Alberto Salazar, Nike's top running coach amid doping allegations; as well as continued concerns about Nike's workplace culture after an internal employee survey leaked describing the company as run by a boys club that is hostile towards women. Nike faces tough competition in all of its market, as well as along the value chain. Rapid advances in mobile technology and the development of the Internet of Things (IoT) could fundamentally change the industry. Nike is also moving further into ecommerce to offset the "Amazon effect." The fast-growing Chinese market, moreover, may provide an avenue for needed future growth.

Oct 26, 2019

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Nike is the world’s largest supplier and manufacturer of athletic shoes, apparel and sports equipment. The company claims to be dedicated to promoting the safety, health and well-being of people and the environment.

But how much do its practices live up to its alleged principles?

Is Nike ethical?

We looked at several ethical issues including human rights, worker's rights, supply chain management, pollution and toxics, habitats & resources, environmental reporting, use of controversial technologies, political activities, anti-social finance and animal rights.

Our research highlights allegations of forced labour in the Nike supply chain, gender discrimination towards female athletes and parents, and failure to ensure all employees receive a living wage. 

What’s more, the company is spending high amounts of money on political lobbying each year – that’s not to mention the extortionate wage packets received by company executives.

Below we outline some of these issues. To see the full detailed stories, and Nike's overall ethical rating, please sign in or subscribe .

In February 2020 the Washington Post reported that a large Nike supplier factory, Qingdao Taekwang Shoes Co., had been employing Uighurs from the Xinjiang region of China. The article referenced a report which said Uighurs in the Taekwang factory were working “under conditions that strongly suggest forced labor”. 

A second Washington Post article published in March states "Nike said it was reviewing its suppliers’ hiring practices in China, after The Washington Post and an Australian think tank reported that members of the Uighur Muslim minority were making shoes for the American brand in conditions that suggested they were coerced.”

Nike also received the worst rating in the 2019 Tailored Wages UK report, published by The Clean Clothes Campaign in June 2019. The report stated: "The brand can show no evidence of a Living Wage being paid to any workers".

Nike also came under fire when Olympic runner and champion Alysia Montaño, who was sponsored by Nike, spoke out about how the company said it would pause her contract and stop paying her if she had a baby. This triggered public outcry and a congressional inquiry. Nike later announced a new maternity policy for all sponsored athletes, which guaranteed pay and bonuses for 18 months around pregnancy.

Environment

Nike received Ethical Consumer’s worst rating for its cotton sourcing policy, because it lacks a clear approach to use of pesticides and herbicides. Cotton accounts for 12.34% of all insecticide sales and 3.94% of herbicide sales, even though cotton covers only 2.78% of global arable land. Nike used some organic cotton and Better Cotton Initiative (BCI) certified cotton, but this wasn’t 100%. Companies that have the environment in mind should have a clear statement committing to the use of 100% sustainable cotton.

Nike also uses leather as a substantial part of its business. The leather industry uses a cocktail of harmful chemicals to preserve leather. Tannery effluent also contains large amounts of other pollutants which can pollute the land, air and water supply, making it a highly polluting industry. Nike made reference to using Leather Working Group (LWG) certified leather in its Impact Report 2019, but no clear information was provided about what percentage was certified 100% LWG gold standard. LWG Gold is the only standard Ethical Consumer considers positive.

Nike is a dubious company in terms of financial ethics and political activities.

In 2019 Nike’s highest paid Executive Officer received an astonishing $13,968,022 – around £11m. Five named Executive Officers received over £1m in total compensation in the same year, which Ethical Consumer considers to be excessive pay.

The company also has subsidiaries in jurisdictions considered by Ethical Consumer to be tax havens, including in Bermuda, Delaware, Netherlands, Taiwan, Hong Kong and Singapore. At least 21 of these were considered to be a high risk company type (such as a holding company) for likely use of tax avoidance strategies.

According to Opensecrets.org, in 2019 the company had spent $1,180,000 on lobbying and in the 2020 election cycle made $511,737 in political donations to both Republican and Democrat parties. What’s more, in 2019 32 out of 38 Nike Inc lobbyists were said to have previously held government jobs.

Nike is also involved in lobbying. In February 2020 Nike was listed as a member of the US Council for International Business (USCIB). Ethical Consumer regarded USCIB to be a corporate lobby group which lobbied for free trade at the expense of the environment, animal welfare, human rights or health protection.

Nike lost a whole mark under Ethical Consumer’s animal rights category, because it retailed several products containing animal-based materials, including leather, wool and down/feathers.

Nike lost marks for not having a clear policy against mulesing. Merino sheep are specifically bred to have wrinkled skin, which yields more wool. Flies lay eggs in the folds of skin, and maggots can eat the sheep alive. To prevent this condition Australian ranchers perform 'mulesing' which involves carving large strips of skin and flesh from the backs of unanesthetized lambs’ legs and around their tails. The company stated “Nike supports the use of wool fiber that is sourced and certified from non–mulesed sheep and will consolidate its wool sourcing accordingly, as rapidly as supplies and pricing allow”. This was worded in such a way that it left open the possibility of the company using wool from mulesed sheep.

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• Annual revenue: £42,000,000,000
• Website: https://about.nike.com/

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Inside Nike's high-profile gender discrimination lawsuit, where plaintiffs claim unequal pay and more thanks to a 'boys' club' culture

• Former female Nike employees sued the company over alleged gender discrimination in 2018.
• The case is one of the most high-profile cases filed in the wake of the #MeToo movement. 
• Here's a guide to Insider's coverage of the lawsuit, which awaits a final ruling on class certification.

A sweeping gender-discrimination lawsuit against Nike is at a critical point. In November, a judge ruled against a motion to make the case a class action.

The judge will soon consider objections to her ruling. 

The lawsuit was filed in 2018, a few months after the Wall Street Journal first reported on allegations of a "boys' club" culture at Nike. The company has repeatedly said it has zero tolerance for discrimination. 

Here's a guide to Insider's coverage of the lawsuit. 

Nike employees described 'sloppy drunk' men, witnessing oral sex, and requests to 'dress sexier' at work in newly unsealed surveys

In December 2022, Insider published the most detailed look yet at the nature and details of the allegations that first rocked the sportswear giant in 2018. The report used roughly 5,000 pages of court documents, including never-before-seen employee surveys, that were unsealed after a court challenge. 

Unsealed Nike employee surveys described a 'boys' club' culture where women were called 'honey' and 'females couldn't possibly play in the sandbox'

Another December Insider report dove deeper into the documents and surfaced additional details from the unsealed employee surveys, including claims of "overarching" themes of "normalized negative, manipulative and sexist behavior" at the company. 

Nike scores critical win in sweeping gender discrimination lawsuit

In November 2022, a federal judge ruled against a motion to convert the lawsuit into a class action. Nike and plaintiffs have since filed written objections to the ruling. A date has not been set for oral arguments.

If plaintiffs get the decision reversed, the case would proceed on behalf of roughly 5,000 women who have worked at Nike's headquarters since October 2017 instead of the 14 plaintiffs named currently.

Nike paid male employees $11,000 more than their female coworkers, newly unsealed court documents allege. Nike disputes the number and says there's no gender pay gap.

In November 2022, Nike and plaintiffs unsealed roughly 5,000 pages of documents, including details of an alleged $11,000 pay gap between 2015 and 2019 for male and female Nike employees. Nike disputed the calculation, which had previously been sealed. Plaintiffs used information obtained from Nike during discovery to compute the alleged gap.

Nike ordered to release additional information about pay practices in sweeping gender-discrimination lawsuit after Insider and other publications' challenge of court seal

In September 2022, a federal judge ruled in favor of Insider, the Oregonian, and the Portland Business Journal. The news outlets had challenged the protective order in the lawsuit, arguing for the public interest in the case. 

Nike is fighting to keep a massive gender-discrimination case from going forward. 3 lawyers walked us through what's at stake.

Three lawyers explained to Insider how class certification motions are a "central moment" in such cases and why companies like Nike fight so hard to defeat them. 

Nike unseals internal memos and human-resource documents as it gears up to defend itself against allegations of gender discrimination

In late April 2022, Nike unsealed its motion against class certification. The motion, and supporting documents, gave the fullest picture at the time of Nike's internal response to the allegations of gender discrimination and sexual harassment. 

Insider among publications working to unseal records in Nike's gender discrimination lawsuit

In early April 2022, Insider, the Oregonian, and the Portland Business Journal intervened in the lawsuit in an effort to get more of the case unsealed. Hundreds of court filings, including corporate records and witness testimony, remained off limits to the public. 

Nike pay and HR practices coming to light as part of lawsuit alleging gender discrimination

In late-March 2022, Nike unsealed more than 700 pages of records that showed the company would likely argue in court that individual hiring managers make decisions about pay, therefore any disparities were isolated, not systemic. 

Nike files motion to keep sensitive records in sweeping gender discrimination lawsuit sealed

In mid-March 2022, Nike said in a legal filing it was willing to make the "overwhelming majority" of the lawsuit public, but it wanted several records to remain sealed, including a plaintiffs' analysis of aggregate pay shortfalls and documents about three former employees who were the subject of complaints. 

Nike infuriated employees and helped spark a lawsuit with a 'tone-deaf' declaration about pay equity. Here's the leaked memo that drew so much scorn.

In April 2017, Nike's top human resources official proclaimed victory on pay equity in a company-wide email, saying women earned 99.6% of what men earned. The self-congratulatory tone of the email spurred an independent employee survey of sexual harassment and gender discrimination that ultimately landed on the desk of then-CEO Mark Parker. 

Do you work at Nike or have insight to share? Contact reporter Matthew Kish via the encrypted messaging app Signal (+1-971-319-3830) or email ([email protected]). Check out Insider's source guide for other tips on sharing information securely.

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The Pragmatic and Ethical Barriers to CSR: The Nike Case

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Nike and child labour – how it went from laggard to leader

29 February 2016

For well over a decade, Nike became defined by the term ‘sweatshop labour’. It was simply one of the principal things for which it became famous. Consequently, a good many people saw it as the epitome of uncaring capitalism. It was one of the demons of the anti-capitalist campaigners.

In reality, there was no truth to the idea that the company was wicked or uncaring. It was simply one of the first that had pioneered a new business model, and it was learning the hard way that it’s hugely successful formula had unintended consequences that would have to be dealt with.

Nike was originally founded in 1964 as Blue Ribbon Sports, changing to Nike in 1971. One of the two founders, Phil Knight, came up with the idea while he was at Stanford Business School. At the time, the vast majority of US footwear was manufactured in America. Nike was able to grow quickly using the model of outsourcing production to a network of suppliers in parts of the world where costs were lower.

Nike didn’t own the factories. In a very real sense, Nike has never manufactured a single shoe in its entire history. And because it didn’t own the factories, the assumption was that running them was business of the owners, not Nike. In its early decades of existence, there was apparently no evidence of any problem that challenged that assumption.

But by the 1990s, the world was changing. Economic deregulation was leading to a huge increase in the globalisation of the economy, and as the scale of global corporate activity was ramping up, the negative consequences were becoming highly visible. Consequently, the US and European home markets began to hear more about working conditions in foreign factories. Nike was neither better nor worse than any of its peers at this point. The whole outsourced industry was based on the premise of “ignorance is bliss”. But ignorance was proving more and more difficult to maintain.

The company began to make changes. It revised its factory code of conduct, and hired auditing firms to carry out safety checks. But by and large, it was still left to the factory owners to sort themselves out while Nike negotiated for the lowest possible prices.

Everything changed in 1996. Life magazine published a story that included a photograph of a child stitching footballs that carried the Nike logo. There is some evidence that the photo was staged, since it showed inflated footballs while in reality the balls were shipped uninflated. It didn’t matter. The picture was a powerful visual for a situation that was shown to genuinely exist. The company’s reputation suffered and the first of many protests began to take place.

By 1998, the company accepted it needed to take responsibility. Phil Knight admitted “the Nike product has become synonymous with slave wages, forced overtime and arbitrary abuse.” It was going to be a longer journey than they might have imagined. Nike and child labour had become indelibly linked in the public consciousness.

Nike began to take the first steps. It released the names and locations of its factories. It changed elements of its shoe manufacture to reduce hazards to the workers who make them. It began producing reports to talk about its progress. And it put more focus on audits of factories to identify problems.

Still, the popular view of the company as a villain refused to go away. In 2001, one particular incident summed up the problem. The company had offered customers the ability to have a word of their choice stitched onto their new Nike trainers. One enterprising critic requested that the word ‘sweatshop’ should be used for his shoes. The company’s refusal was one of the first examples of a viral internet phenomenon as the email exchange got shared widely across the world.

Organisations such as ‘NikeWatch’ and the Clean Clothes Campaign expressed skepticism about Nike’s efforts, taking a cynical view of its seriousness and sincerity.

But by 2005, the company’s steady progress began to gain grudging respect from some of the campaign groups, and it seemed like the mood music might begin to change. Then just at that point, there came a crisis that threatened to take it right back to the beginning.

In the run-up to the 2006 World Cup, photos were presented to the company of pictures of Pakistani children stitching Nike footballs – a direct repeat of what had happened ten years earlier. It turned out that the supplier, Saga Sports, having become overwhelmed with orders linked to the approaching World Cup, had gone against the rules by sending balls out to be made at local homes.

There was a significant cost to dealing with this problem. To recall the balls would cost $100m short term, and it would delay future production considerably. The company decided to pull the product anyway and to cancel its contract with Saga, moving instead to Silver Star where all work would be done on factory premises.

It was a short-term financial blow, but it sent a strong signal to the company’s suppliers and its customers at the same time, that it was serious about tackling the problem.

The impact on former supplier Saga was enormous, essentially driving it to bankruptcy. Other suppliers based in Sialkot, Pakistan took careful note.

Nike has shown itself to be willing to take other tough decisions, for instance pulling support from a major low cost supplier in Bangladesh because it was impossible to provide working conditions that met decent standards. This was a move that gave it a competitive disadvantage when others were exploiting Bangladesh as the lowest possible cost base. But it left the company less exposed when the Rana Plaza building disaster took place and hard questions began to be asked about who was doing what.

Now, Nike finds itself more often at the top of lists for sustainable companies, particularly within its sector. It appears in the top ten of the Fortune Most Admired Companies list. Its commitment to improving its environmental impact, providing transparency about its processes, and ensuring decent working conditions in its supply chain, have turned the tide of public perception.

Now the company is more often to be found on the front foot when it comes to matters of integrity. For instance, when boxer Manny Pacquiao recently made anti-gay comments during a media interview, Nike dissolved its partnership with him the very next day, labelling his comments “abhorrent.”

The company’s turnaround has become one of the success stories of corporate integrity in the last two decades.

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Case study: How Nike solved its sweatshop problem

With this article, we present actions Nike has taken through the years to solve its sweatshop problem, using information published in its GRI Standards-based CSR/ ESG/ Sustainability reports.

See what action Nike has taken through the years to solve its sweatshop problem

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Nike is continuously tackling its most important environmental, economic and social impacts with the use of the GRI Standards for CSR/ ESG/ sustainability reporting: an all-round, complete, structured, and methodical approach used by 80% of the world’s 250 largest companies.

• Promoting worker-management dialogue: Nike took action to facilitate worker-management dialogue in contract factories through permanent ESH (Environment, Safety and Health ) committees, training both workers and management to engage in constructive dialogue.
• Directly intervening to protect workers’ rights:  When workers’ rights are not adequately protected by others and Nike believes it can influence the outcome, it may directly intervene, often seeking advice from external stakeholders with expertise on a topic.
• Supporting transparency:  Nike became the first company in its industry to publish online the names and addresses of all contract factories manufacturing Nike-brand products, constantly updating this list.
• Monitoring Nike and contract factories:  In addition to regular management audits in factories, Nike carries out deeper studies called Management Audit Verifications (MAV), which are both an audit and verification in one tool. The MAV tool is focused on four core areas: hours of work, wages and benefits, labour relations and grievance systems.
• Compliance with legally-mandated work hours
• Use of overtime only when employees are fully compensated according to local law
• Informing employees at hiring if compulsory overtime is a condition of employment
• Regularly providing one full day off in every seven and requiring no more than 60 hours of work per week
• Setting industry-leading compliance standards: Contract factories in Nike’s supply chain are subject to strict compliance requirements, starting with risk analysis of the host country and Nike’s Code of Conduct. Additionally, Nike’s internal team of more than 150 trained experts monitors, amends and provides improvement tools to the factories. Nike regularly audits contract factories, with assessments taking the form of audit visits, both announced and unannounced, by internal and external parties, and works with accredited third parties, such as the Fair Labor Association (FLA), to carry out independent monitoring.
• Helping contract factories protect workers’ health and safety: Nike helps its contract factories put in place comprehensive HSE (Health, Safety and Environment) management systems which focus on the prevention, identification and elimination of hazards and risks to workers, expecting its contract factories to perform better than industry averages in injuries and lost-time accidents.
• Forbidding the use of child labour: Nike specifically and directly forbids the use of child labour in facilities contracted to manufacture its products. Nike’s Code of Conduct requires that workers must be at least 16 years old or past the national legal age of compulsory schooling and minimum working age, whichever is higher. In addition, Nike’s Code Leadership Standards include specific requirements on how suppliers should verify workers’ age prior to starting employment and actions a facility must take if a supplier violates Nike’s standards.
• Promoting workers’ freedom of association: Nike’s Code Leadership Standards contain detailed requirements on how suppliers must respect workers’ rights to freely associate, including prohibitions on interference with workers seeking to organise or carry out union activities.

How Nike conducts stakeholder engagement

Nike benefits from constructive guidance from a number of external stakeholders, including civil society organisations, industry, government, investors, consumers and others. To identify and better understand emerging sustainability issues Nike works with Ceres (a sustainability nonprofit organisation), convening an external stakeholder panel and carrying out multiple dialogues that guide the development of its approach to reporting and communication.

How Nike solved its sweatshop problem

It was only 20 years ago that Nike was facing child labour and sweatshop allegations, with consumers protesting outside Niketown stores. All this is hard to believe, given the steady stream of corporate social responsibility (CSR) accolades in the last 10 years.

In 1998, then-CEO Phil Knight promised change. The company struggled to put new policies in place and enforce them. In 2005, Nike published its first version of a CSR/ ESG/ Sustainability report – in which it detailed pay scales and working conditions in its factories and admitted continued problems – and took the dramatic step of publicly disclosing the names and addresses of contract factories producing Nike products – the first company in its industry to do so.

More recently, Nike made this information available on an Interactive Global Manufacturing Map ; there, you can click on a factory to see its name, number of workers, percentage of female and migrant workers and what’s made there. A major change from the days when Nike faced accusations of labour rights in its supply chain, it takes transparency to a whole new level.

Nike recognised its issues, demonstrated transparency and worked toward change – and, today, it is counted among CSR/ ESG/ Sustainability leaders.

Which Sustainable Development Goals (SDGs) have been addressed?

The SDGs addressed in this case are:

• Sustainable Development Goal (SDG) 3 : Ensure healthy lives and promote wellbeing for all at all ages
• Business theme:  Occupational health and safety
• Sustainable Development Goal (SDG) 5 : Achieve gender equality and empower all women and girls
• Business theme: Workplace violence and harassment
• Sustainable Development Goal (SDG) 8 : Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
• Business theme: Occupational health and safety, Freedom of association and collective bargaining, Abolition of child labor, Elimination of forced or compulsory labor, Labor practices in the supply chain
• Sustainable Development Goal (SDG) 16 : Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
• Business theme:  Abolition of child labor, Labor practices in the supply chain

78% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

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References:

This article was compiled using an article from the links below. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the article’s meaning. If you would like to quote these written sources from the original please revert to the links below:

http://www.theguardian.com/sustainable-business/2016/jan/02/billion-dollar-companies-sustainability-green-giants-tesla-chipotle-ikea-nike-toyota-whole-foods

http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5

http://www.triplepundit.com/special/roi-of-sustainability/how-nike-embraced-csr-and-went-from-villain-to-hero/

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