Nike Goes Public Again On CSR

Nike, a leading designer, marketer and distributor of sporting wear has released it’s second ever CRS report claiming new levels of transparency and stakeholder engagement.

Nike says its report highlight the Nike brand’s CR priorities, programs, progress and challenges relating to workers in contract factories; employees and diversity; the environment; and community investment.

In addition, the company has become the first in its industry to voluntarily disclose the names and locations of the more than 700 active contract factories that currently make Nike-branded products worldwide.

This information, along with its report, is posted on Nike, Inc.’s website at www.nikeresponsibility.com/reports.

The 108-page report is Nike’s first public corporate responsibility report since it made the decision to stop reporting in October 2002 when it petitioned the U.S. Supreme Court to hear the Kasky v. Nike First Amendment case.

It was released this month in conjunction with the annual Ceres conference in Boston. Ceres is a coalition of investment funds, environmental organisations and public interest groups

Nike founder and chairman, Philip Knight says the company is using this report to play a little catch-up and draw a more complete picture.

Knight says that probably the most significant piece of disclosure is a listing of all factories that produce Nike-branded products, worldwide.

Nike sys it believes full disclosure of its contract factory base producing Nike-branded product ultimately will provide greater visibility into shared suppliers and more efficient monitoring.

It also supports the company’s long-term strategy of building shared ownership of compliance directly with contract factories.

Hannah Jones, Nike’s vice president of corporate responsibility says Nike knows that the current system of addressing factory compliance has to be fundamentally transformed to create sustainable change.

She says disclosure of supply chains is a step toward greater efficiencies in monitoring and remediation and shared knowledge in capacity building that will elevate overall conditions in the industry.

For advice in preparing the report, Nike invited experts from the trade union, NGO, academic, investor and business communities, acting in their capacities as individuals, to participate in a Report Review Committee.

The Committee’s statement says in part that it recognises Nike for this candid and comprehensive report…The report’s candor on the significant challenges of addressing labour standards within its global supply chain is welcome, and may facilitate discussion on how to tackle these challenges.

It says that while noting that monitoring is not a sufficient or long-term solution to raising labour standards, the report presents Nike’s extensive and evolving efforts to manage monitoring, integrate compliance into its business strategy through the Balanced Scorecard, and pursue multi-stakeholder initiatives that could lead to more systemic industry-wide improvements.

“Working with an external CR report review committee accelerated our learning process, and we are deeply appreciative of their time and contributions to this report,” Jones said. “While we’ve been quiet, we’ve been busy since our last report, and the breadth and depth of this report reflects that. Reporting is an essential element in driving continuous improvement. We now need common reporting standards so stakeholders can compare companies across industries.”

The Review Committee also provided some recommendations for further improvements in reporting. The committee encouraged Nike to report its progress of integrating corporate responsibility into the business, expand coverage of the report to include subsidiaries performance and improve data collection and information management systems.

For the fourth consecutive year, Nike met its target of investing 3 percent of the preceding fiscal year’s pre-tax profits to community organisations worldwide. In FY04, Nike contributed $37.3 million in cash, product and in-kind services to community organisations globally, representing 3.3 percent of the company’s FY03 pre-tax profits.

The company has two primary priorities for its community investment programs worldwide: increasing the participation of young people in physical activity, with a focus on the lifelong benefits it brings through a program called NikeGO; and investing in innovative solutions that address the challenges of globalisation, with a particular emphasis on women and girls through the company’s investment in the Nike Foundation.

The report also outlines the company’s three strategic corporate responsibility priorities going forward:

1. To effect positive, systemic changes in working conditions within the footwear, apparel and equipment industries;

2. To create innovative and sustainable products; and

3. To use sport as a tool for positive social change and to campaign to turn sport and physical activity into a fundamental right for every young person.

In 2005 and 2006, Nike says it plans to establish key performance indicators and time lines to gauge progress and measure performance and impact for each of its CR goals.

To that end, the company says it intends to strengthen its data collection and information management systems as well as identifying appropriate metrics to track progress.

Nike is soliciting direct feedback on its report at www.nikeresponsibility.com.