Founded in 1964 by an Oregon track and field coach and one of his former students, Nike has been a dominating force in the global athletic footwear and apparel industry. According to the retail tracking service, the NPD Group, out of the top ten selling shoes of 2019, seven of them were produced by Nike and their subsidiary brand, Converse. With $24 billion of footwear sales in 2019 alone, Nike has consistently been one of the world’s most recognizable and iconic brands in the world. So, how does such a globally recognizable brand like Nike address their responsibility to the environment and their social impact? Lace up your Jordans, because we are about to jump in.
Emissions score 4/5:
Compared to other sneaker brands, Nike has made relatively impressive moves towards sustainability and emissions reduction. Their campaign, ‘Move to Zero’ uses the 3 Scopes of Corporate Standard created by Greenhouse Gas Protocol –These handy Scopes are an internationally recognized and widely used accounting tool for corporations to categorize their emissions. Nike aims for a total reduction of Scope 1 (direct emissions like fuel use) and Scope 2 (indirect emissions such as purchased electricity like heat, cooling, and steam) emissions by 65% and Scope 3 (all the other indirect emissions that add up like use of sold products, investments, business travel, and waste disposal) by 30% by 2030. If all goes according to plan, Nike hopes to be able to steer themselves towards performing with 100% of the energy consumed in their globally owned and operated facilities to be from renewable sources by 2025. By the same year, they intend to decrease their overall energy use and CO2e emission by 25%.
As conscious consumers, it is important for us to be mindful that these projections are not set in stone. Without a doubt it is the responsibility for brands to stick to their goals but it is our responsibility to duty to hold them accountable.
The conversion of materials into footwear —especially into outsoles— is a highly energy intensive process. Since 2015, Nike has been about to work with their suppliers to reduce the total energy consumption of each pair of shoes produced by 8%. Along those lines, Nike intends to decrease the overall energy used and CO2e emission produced by 35% in the dyeing and finishing processes by them and their suppliers. They also routinely reuse and recycle plastics, textiles, and yarns in their manufacturing processes. For example, their Flyleather material is made of recycled leather fibres and synthetic water-based textiles –a process that creates far less waste and emissions than traditional full-grained leather.
Human Rights score: 3/5
Nike’s publicly available Code of Conduct is expected in all facets of the supply chain, including with their partners and all of their supplying factories. It outlines the company’s commitment to hiring only voluntary employment (no prison labour, indentured, bonded, or forced labour. It specifies that all employees must be 16 years or older in all apparel manufacturing facilities and 18 years or older for all footwear manufacturing. To ensure that the age standards are upheld and that workers are paid fairly, no Nike products can be produced by homeworkers –A sneaky runaround in a garment industry where items are made at home by sub-contracted “homeworks” who produce outside of the regulated factories. Nike has a global commitment to respecting their employees freedom of association and collective bargaining within the workplace.
According to their human rights and labor compliance standards:
“At Nike, we strongly believe and are committed to respecting human rights. It is not only the right thing to do, it also drives our success by allowing people’s full potential to be realized. We look to the human rights defined in the Universal Declaration of Human Rights and the International Labour Organization’s Declaration on Fundamental Rights at Work. We also consider the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises as best practice for understanding and managing human rights risks and impacts.”
After the catastrophic collapse of the Rana Plaza in Bangladesh in 2013, the hazardous structural fortitude of garment factories across the world was thrust into the spotlight. Nike does not own or operate any of the garment facilities and has a history of subcontracting it’s manufacturing to less developed labor markets where it is difficult to enforce and regulate working conditions and standards. But Nike claims commitment to upholding international standards of ethical and safe manufacturing through their Code Of Conduct and expects all supplying facilities to meet their minimum requirements. This includes no excessive working hours, compensation and benefits to be paid on time, and the structural integrity of the factories to be monitored.
Corporate Ethics score: 1/5
In the late nineties, Nike was caught in the crosshairs for multiple reports on unjust and abusive labour practices in oversea factories. In 2003, Nike settled a false advertising lawsuit for $1.5 million with the consumer-based advocacy group, Fair Labor Association. The lawsuit was filed based on the allegations that Nike had led an aggressive PR campaign full of statements regarding its corporate social responsibility that were inconsistent with the heavily reported behavioural actions at the time.
According to the lawsuit:
“Beginning in 1996, Nike was besieged with a series of allegations that it was mistreating and underpaying workers at foreign facilities. Nike responded to these charges in numerous ways, such as by sending out press releases, writing letters to the editors of various newspapers around the country, and mailing letters to university presidents and athletic directors. In addition, in 1997, Nike commissioned a report by former Ambassador to the United Nations Andrew Young on the labor conditions at Nike production facilities. After visiting 12 factories, Young issued a report that commented favourably on working conditions in the factories and found no evidence of widespread abuse or mistreatment of workers.”
In Nike’s statements in regards to the suit, they claimed that these statements were not false advertising. That because they were released by means of either press releases or letters to newspapers, they were acts of free speech and protected under the First Amendment. Serious ethical concerns were raised when Nike made the choice to advertise and promote a squeaky clean corporate image instead of actually addressing it’s negative public perception.
“On appeal, the California Supreme Court reversed and remanded for further proceedings. The court held that because the messages in question were directed by a commercial speaker to a commercial audience, and because they made representations of fact about the speaker’s own business operations for the purpose of promoting sales of its products, . . . the messages are commercial speech.”
Years later, Nike has been able to shake the majority of it’s unfortunate sweatshop image. Through major rebranding from the top down, they have publicly admitted their faults, embraced radical transparency, raised the wages of factory workers,, and increased inspections in factories to insure safe working conditions.
Nike also has their Speak Up Portal. A platform where any employee can easily report concerns, ask questions, or raise awareness to any violation of their Code of Ethics. This portal is hosted by an external issuing and reporting firm, NAVEX Global. All of the reports remain anonymous and no identifying information is given to Nike.