Nike Corporate Social Responsibility (CSR) and Sustainability
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Founded in 1964, Nike is the largest and most recognized sports apparel brand in the world today. From their humble beginnings as a shoe and t-shirt company, Nike has grown into an international conglomerate with an estimated global brand value of $30 billion in 2021.[1] Headquartered near Beaverton, Oregon, the company operates more than 1,000 retail stores worldwide and employs over 73,000 people in 170 countries.[2]
In line with their iconic swoosh and “Just Do It” trademark, Nike’s business model is built on developing game-changing technologies and products that have redefined the sports apparel industry. Much of the company’s success is attributed to its international marketing, which includes partnering with popular celebrity athletes and sports teams from around the globe.
Nike’s Corporate Social Responsibility (CSR) Policy
Nike’s Corporate Social Responsibility and Sustainability program resonates with the company’s core belief that “sports can change the world for the better.” Nike leverages the unifying power of sports to promote its CSR agenda in three key areas: diversity and inclusion, community investment, and environmental sustainability.
I. Nike’s Diversity and Inclusion Program
Nike’s CSR and corporate governance programs center on providing a healthy and tolerant work environment for all employees. To that end, the company invests in promoting a work environment that celebrates diversity and inclusion. In 2020, Nike introduced two new CSR programs, their Juneteenth learning initiative, and their Unconscious Bias Awareness training program to promote a greater understanding of racial equality and social change. Throughout 2020-21, Nike laid out a five-year plan for creating more diversity in their workforce, which included a target goal of 50% representation of women and 35% representation of racial and ethnic minorities in their corporate workforce by 2025.[3] In conjunction with this initiative, Nike announced an investment of $125 million over the next five years to support businesses committed to “leveling the playing field.”[4]
In 2020, Nike allocated $4 million to support diversity and inclusion in communities throughout North America through its Until We All Win program. Additionally, eight of Nike’s Employee Networks donated $25,000 a year to nonprofit organizations focusing on promoting social equality, regardless of race, gender, and sexual orientation.
II. Nike’s Community Support Program
As part of their community outreach program, Nike spent more than $89 million in 2020 to help over 17 million kids around the world get active in sports and exercise. Nike also committed to training nearly 100,000 coaches to help communities most in need.
To encourage more gender inclusivity and equality, Nike invested over $100 million into their Girl Effect program between 2015-2020 to improve the lives of tens of millions of girls in 20 countries throughout Africa and Asia.[5] The company also expanded its digital training tools to include the Coaching Girls program which aims to make sports more fun and inclusive for girls through coach education and leadership training.
Lastly, in collaboration with Converse, Jordan Brand, and Michael Jordan, Nike announced a 10-year $140 million CSR commitment to support social equality for Black Americans, $40 million of which is intended to support organizations and nonprofits addressing systemic inequality.
COVID-19 Response
Nike’s COVID-19 response was widespread, covering the costs of food and apparel for global communities and extra assistance for their employees. The efforts included $30 million for food and medical care and a $5.7 million dollar donation of footwear and apparel to healthcare professionals and front-line workers.
For employees, Nike worked with suppliers to implement proper health and safety protocols at their facilities and provided paid time off and free virtual counseling for those who were experiencing mental and emotional distress due to the pandemic. Nike also implemented a two-to-one match for all employee donations made to organizations addressing COVID-19-related relief and support.
III. Nike’s Sustainability Program
Understanding that if there “is no planet, there is no sport” Nike continues to make considerable inroads in promoting their environmental sustainability initiatives.
Through the Supplier Climate Action Program, Nike ensures their suppliers and manufacturers are committed to their goal of carbon neutrality by 2025. So far, the company announced that all of their North American facilities, as well as 48% of their global operations, are operating on 100% renewable energy, and 99.9% of manufacturing waste from their tier 1 suppliers have been diverted from landfills. Under this new program, there was also a 30% reduction of fresh water used in manufacturing textiles and materials in 2020.
To further reduce waste, Nike is introducing more sustainable materials into their product lines and taking advantage of reusable and recyclable products. In 2020, sustainable material integration increased from 41% to 59% in their clothing lines. Although [EE1] [MH2] the use of sustainable materials in their footwear was unchanged in 2020, the company is focusing on sustainable materials such as Flyleather, a material made with at least 50% recycled leather scraps. So far, over 4 billion plastic bottles have been reprocessed into polyester and other textiles that are used in their products. Nike is also piloting alternative packaging solutions that replace corrugated cardboard with reusable shipping totes.[6]
Nike’s Corporate Social Responsibility Issues
Despite adopting a range of new environmental protocols to reduce environmental waste, Nike’s carbon footprint remains unchanged from its 2015 baseline. This is largely attributed to a steady stream of new footwear lines that require new materials. In addition, while the brand has set a science-based target to reduce greenhouse gas emissions, there is little evidence they are on track to meet their target of operating entirely on renewable energy by 2025. There is also no clear indication that the company - which relies heavily on trees and plants for their textiles - has a policy in place to address deforestation.
In addition to concerns surrounding their environmental impact, Nike’s labor practices continue to be scrutinized for human rights violations. In 2020, The Washington Post reported that members of the Uighur Muslim minority in China working for Nike were subjected to coerced working conditions and ethno-religious discrimination. In response to this criticism, Nike issued a statement saying that while they are “concerned about reports of forced labor, Nike does not source products from the XUAR [Xinjiang Uyghur Autonomous Region].”[7]
Nike has also been under fire recently for financially penalizing female athletes who become pregnant while under contract. To address the controversy, Nike has since amended its policy, stated that it will no longer pause or stop payment to pregnant athletes. Despite these efforts, the company continues to be criticized for not acknowledging its past treatment of female athletes.[8]
Nike’s Corporate Social Responsibility Report
Access Nike’s 2019-20 CSR Impact report here.
Conclusion
Living up to their “Just Do It” brand, Nike continues to set industry standards for its innovative product designs and marketing strategies. To maintain its competitive advantage, Nike will need to expand and improve their supply chain practices to ensure that protocols protecting the safety and wellbeing of all workers are enforced. The company’s heavy reliance on overseas factories also means that Nike will need to continuously monitor and improve their operations to ensure that its products are socially and ecologically sustainable.
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Sources:
Hableton, Brittany. “Athletes React to Nike Pregnancy Ad,” Running Magazine, March 16, 2021. https://runningmagazine.ca/the-scene/athletes-react-to-nike-pregnancy-ad/. Accessed 1, October 2021.
Nike Inc.com. “FY20 NIKE, Inc. Impact Report.” https://purpose-cms-preprod01.s3.amazonaws.com/wp-content/uploads/2021/04/26225049/FY20_NIKE_Inc_Impact_Report2.pdf. Accessed 25, September 2021.
Nike Inc.com. “Waste.” https://purpose.nike.com/waste. Accessed 26, September
Statistica.com. “Brand value of the sports company Nike worldwide from 2016-2021.” https://www.statista.com/statistics/632210/nike-brand-value/. Accessed 20, October 2021.
Statistica.com. “Nike’s net income worldwide from 2005-2021.” https://www.statista.com/statistics/241685/net-profit-of-nike-since-2005/. Accessed 24, September 2021.
Suliman, Adela. “Nike, H&M, Burberry face Backlash and Boycotts in China Over Stance on Uyghur Treatment,” NBC News, March 25, 2021. https://www.nbcnews.com/news/world/nike-h-m-face-backlash-china-over-xinjiang-cotton-concerns-n1262019. Accessed 27, September 2021
Thomas, Lauren. “Nike Sets Fresh diversity Targets for 2025, and Ties Executive Compensation to Hitting Them. “ CNBS.com, March 11, 2021. https://www.cnbc.com/2021/03/11/nike-sets-diversity-goals-for-2025-ties-executive-comp-back-to-them.html. Accessed 30 September 2021.
[1] https://www.statista.com/statistics/632210/nike-brand-value/
[2] https://www.statista.com/statistics/241685/net-profit-of-nike-since-2005/
[4] ibid
[6] https://purpose.nike.com/waste
[8] https://runningmagazine.ca/the-scene/athletes-react-to-nike-pregnancy-ad/
