Nike & Corporate Social Responsibility

Nike

Corporate social responsibility (CSR) is a concept that has blossomed over the last fifteen years. Rather than being narrowly focused on the pursuit of profit at the expense of all else, businesses practicing CSR, should at least in theory, be behaving responsibly in the course of their profit-making, taking into account their economic, environmental and social impacts on society.

However, there is a lot of debate surrounding CSR practice, regarding both to what extent certain companies are living up to their responsible promises and regarding some of the possible ulterior motives involved in practicing CSR.

Reasons leveled at Nike for why they might be practicing CSR, other than just on basic moral grounds include:

• Defending their important public image
• Differentiating themselves from their competitors
• Helping to prevent financially damaging boycotts, strikes, lawsuits, etc
• Appealing to the ethical consumer
• Appealing to the ethical investor
• Appealing to the ethical employee
• Pressure to do so from NGO's, Government or to combat public relations disasters
• Using CSR policies as evidence that they do not need to be regulated any further than they already are at present

Nikes CSR Policy

Nike maintain that their business is built on trust, teamwork, honesty and mutual respect. In order for this to be achieved, the company has put in place a set of corporate governance policies and practices and this has been extended in recent times to attempt to include corporate responsibility issues as a central part of their governance system. Nike's codes and policies are outlined below:

Our Codes and Policies

Our code of ethics is called Inside the Lines; it defines the standards of conduct we expect of our employees. Every year, all employees are required to verify that they have read and understand Inside the Lines.

We operate a global toll-free Alertline for employees to report in confidence any suspected violations of the law or our code of ethics. Any reported concerns around accounting, auditing or internal control are communicated to the Audit Committee of the Board.

We expect our suppliers to share our standards and to operate in a legal and ethical manner. While Inside the Lines covers the behavior of Nike employees, our Nike Code of Conduct covers contractors who manufacture Nike-branded products. It directs them to respect the rights of their employees, and to provide them with a safe and healthy work environment.

       http://www.nike.com/nikebiz/nikebiz.jhtml?page=7&item=responsibility

Corporate Responsibility Committee

Jill Ker Conway, Non-Executive Director, Committee Chair

Douglas G. Houser, Non-Executive Director

Jeanne P. Jackson, Non-Executive Director

John R. Thompson, Jr., Non-Executive Director

Established in 2001, the CR Committee of the Board was set up to review significant policies and activities and make recommendations to the Board of Directors regarding labor and environmental practices, community affairs, charitable and foundation activities, diversity and equal opportunity, and environmental and sustainability initiatives. Meetings are held regularly where the Committee meet to discuss these issues. In addition, close to 150 Nike employees work on CR issues as their main function or have CR work included in their workload. [1]

CSR in Practice

Examples of what nike do sponsorship, ethical issues,

• sweatshops and how they have got better?

environmental issues

You might want to include some of the following some of this as part of your piece Euan

4. A Small but Important Step Forward - Nike Reveals Factory Addresses Oxfam Community Aid Abroad welcomes Nike's decision to release its address list of factory suppliers for Nike-branded products. The release of factory addresses is an important step forward in terms of transparency and we strongly encourage other brands to follow Nike's lead. We also encourage Nike to release the addresses of factories making the other brands which Nike owns, including Converse and the discount sportswear Nike produces for sale in Wal-Mart stores. The addresses were made public in April as part of the launch of Nike's latest Corporate Responsibility Report. Another positive aspect of the report is Nike's openness in admitting that between 25% and 50% of its supplier factories are: 1. failing to provide workers with one day off in seven, and 2. paying wages below the relevant legal minimum wage Nike also acknowledges that the company's business decisions including manufacturing timelines and pricing may contribute to negative impacts on workers. More information is needed in order to assess whether Nike's "balanced scorecard" approach to selecting factories will reduce this problem. While openness and transparency are important, there is a difference between admitting to problems and solving them. Oxfam Community Aid Abroad remains concerned that the great majority of workers producing Nike product are still not paid enough to meet the basic needs of their dependents and are denied their right to freedom of association. It is good that Nike acknowledges that trade union rights represent a key challenge for the company and admits that some suppliers are actively and illegally opposing organising efforts. However, Oxfam Community Aid Abroad is aware of only a few isolated cases where Nike has helped increase the space for Nike workers to exercise their trade union rights and in those cases Nike only acted positively in response to sustained campaign pressure. On wages, whereas Oxfam believes companies should commit to a living wage, Nike's report makes it clear that the company does not support this approach. Nike's moves to increase transparency in its supply chain are welcome. We encourage Nike to match this with a commitment to ensuring that workers are paid a living wage and with concrete action to ensure that workers' trade union rights are respected.[2]

Nike’s approach to labour conditions in there contract factories is evolving. Nike has transformed from a focus on the Code of Conduct to advocating common standards across the industry. They have evolved from outsourcing labour monitoring to relying on a trained team of internal monitors and support for common monitoring platforms such as the “Fair Labour Association.” Furthermore they are growing from a focus on monitoring to a focus on capacity building. From an exclusive focus on factory floor impact to an exploration of ways to help change the industry through transparency and multi-stakeholder collaborations. These changes are driven by awareness that structural issues, common to the global footwear, apparel and equipment industries affect an individual company’s ability to change conditions in particular factories. There monitoring processes provide clear issues arising inside factories. What they do not tell us, however, is how those issues are affected by events of external factors. For example, in trying to reduce excessive overtime, we can focus on more effective policing of factories to achieve compliance. But simply focusing on policing does not address the root cause and might take resources away from engaging in broader discussions about why workers in some cases want extra hours. Those are the discussions that may lead to greater and more lasting changes. This kind of root cause analysis requires active listening and engagement in the broader dialogue with civil society, institutions and businesses around supply chain working conditions. In recent years, we have focused on refining our skills at (a) identifying risk of code compliance (b) uncovering issues and (c) implementing strategies that can be used to drive performance and enable change within Nike internally and on a broader level. They have become more systematic in identifying non-compliance risk, and they have become increasingly adept at uncovering issues, but despite anecdotal instances of success, they remain deeply challenged – challenged to understand how to measure systematically the impact of there own interventions and challenged by how they play a role in enabling widespread change within the industry, which they now know is critical to facilitating change within there contract supply chain. One step in responding to this challenge is to reveal there contract factory base. While no one can say with certainty what greater levels of factory disclosure will unleash, they do know the current system of addressing factory compliance has to be fundamentally transformed to create sustainable change. They believe that disclosure of supply chains is a step toward greater efficiencies in monitoring and remediation and in shared knowledge and capacity building that will elevate overall conditions in the industry. No one company can solve these issues that are endemic to the industry. Transparency also should increase the incentive of brands to work with factories that demonstrate CR excellence. A more thorough description and assessment of Nike’s approach in this area can be found in the FY04 Corporate Responsibility Report.[3]

The alternative viewpoints

http://www.toolness.com/nike/swoosh.jpg33 http://perso.wanadoo.fr/jerome.lafourcade/Documents/Detente/Images/Anti-mondialiste/nike.jpg33

Nike might see themselves as a victim of their own sucess. As one of the biggest manufacturers of sportswear, they are under considerably more scrutiny than many of their competitors, targeted by a broad range of campaigning NGOs and journalists as a symbol of the "Typical Multinational". In Nikes case, the issues are those of human rights and conditions for workers in factories in developing countries. In the face of constant accusations, Nike has developed a considered response and even publicly apologised for its past wrongdoings last year. However, some criticism continues.

A Parody for Nike

The results of an internet search regarding Nike will usually bring up a clever and thought provoking parody by a man called Atul, at http://www.toolness.com/nike high on the list. It ridicules Nike for some of their approaches to manufacturing in the third-world. While the parody, titled: "Nike Sweatshops™ � unlocking the power of poverty", provides no evidence of malpractice, it's sarcastic tone sums-up and reinforces what many people believe goes on.

Atul writes:

"The theme of this parody is the idea that, from the perspective of our current economic system, poverty is a very good thing. Because it increases profit margins, its existence is beneficial to a global economy. In fact, it is in the best interests of multinational corporations and their shareholders to prolong poverty for as long as possible."

The following is a list of accucations made in the parody, which highlight many respected NGO and activist opinions on third-world sweatshops:

• Nike actively seek to keep their sweatshop communities in poverty by
  • Setting up schools that purposely provide a low level of education to keep the community low-skilled
  • Paying a wage that employees can only just survive off to make sure that they can not save to start their own business, thus keeping a stranglehold on the economy.

• Nike build factories in areas with such high unemployment so employees have no choice but to work for Nike.
  • They provide basic facilities for the factory community to further increase the communities dependence on them, so the community will be crippled if Nike leave

• Nike look after investors interests by keeping profit margins high, at the expense of their third-world employees
  • Maintaining low third-world wages and poor working conditions to keep profit margins high
  • If salaries become to high in the area they're operating in, they pull out, spelling high unemployment and deprivation for the community.

Find out for Yourself

References