Nike Fact file
Nike, the athletic footwear and clothing manufacturer, is a good example of a
multinational corporation that has incorporated corporate social responsibility into
its overall business strategy. In fact, Nike might argue that the move was
necessary for its [Link] is based in Oregon, USA. It operates in 120
countries and has over 20,000 employees. Fiscal year 2001 saw sales grow in each
of its product segments in all four global markets. Total sales topped $US 9 billion.
Nike formally endorsed the CERES principles in November 2000. In the 12 months
that followed, the company implemented many new policies reflecting the
principles, and addressed some areas that the company had traditionally
overlooked.
'The endorsement of the CERES principles and the processes that will come with
that step are, for Nike, an opportunity to engage important stakeholders in a broad
and highly credible forum,' said a company statement.
Dusty Kidd, Nike's vice president for corporate responsibility, adds: 'We hope that
through this engagement with CERES, we can advance our work in environmental
and social issues.'
Officials at CERES are hoping that Nike's decision to endorse the principles will be a
positive step for the apparel industry in general. CERES executive director Robert
Kinloch Massie described the move as 'a tremendous opportunity for environmental
and social advocacy organizations to positively engage with one of the highestprofile companies in the world on the issue of global responsibility.'
Nike admits that it has not been as vigilant as it could have been in the past when
it came to monitoring working conditions, but says this is changing.
One of the requirements of CERES-endorsing companies is to participate in open
dialogue with public interest groups about their performance. Nike is aiming to
meet this requirement through the implementation of several new programmes.
The majority of Nike's manufacturing takes place in developing countries, where its
suppliers employ more than 500,000 workers. For a large multinational company
with so many interests abroad, it is not always easy to be transparent. However,
Nike has launched its 'Transparency 101' program, which is designed to ensure
that the public is aware of everything the company is doing. Transparency 101 is
monitoring factories in each country where Nike operates and ensuring that the
practices in each are in line with its code of conduct.
For example, in February 2001 Nike, in co-operation with Reebok, commissioned
an independent auditor to look into labour conditions at a factory in Mexico that
manufactured products for the two companies. The auditors' report is available on
the company website.
On risk reduction, the CERES principles state that a company must minimize risks
to employees in the communities in which it operates. With the Transparency 101
program, Nike has begun to investigate and report on conditions in its various
factories worldwide.
On 'safe products and services', Nike is required to ensure the safety of its
products for those who manufacture them, as well as for the end users. In
accordance with this principle, Nike is continuing its efforts to phase out PVC and
other potentially harmful chemicals in its products.
On 'informing the public', the CERES principles state that a company must report,
in a timely manner and to all who may be affected, any aspect of the company's
operations that could pose a threat to environment, health or safety. To this end,
Nike published its findings on factory conditions as they were available, as well as
recalling products that may pose a health hazard to consumers.
The company's success in these areas since it endorsed the principles has been
recognized by various groups. For example, Fortune Magazine ranked Nike number
one in the apparel industry on its annual list of 'America's Most Admired
Companies'. Similarly, the Far Eastern Economic Review (FEER) has ranked Nike
among its top-ten best multinational corporations in Asia for corporate leadership
and issue-specific leadership. The Review noted that in the previous year, Nike had
improved in almost every category.
Nike is also listed as one of the 226 companies recognized for sustainability efforts
on the Dow Jones Sustainability Index.
Beyond the CERES principles, Nike has recently been investigating options for
improving its energy efficiency. By certifying all of its new buildings in Oregon with
'Earth Advantage', Nike has been able to save more than two million kilowatt-hours
and over 2,000 therms of natural gas. This has translated into a total saving of
$100,000 for the company.