The case for CSR/ Sustainability Reporting Done Responsibly


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How Nike solved its sweatshop problem

With this article, we present actions Nike has taken through the years to solve its sweatshop problem, using information published in its GRI Standards-based CSR/ ESG/ Sustainability reports.

See what action Nike has taken through the years to solve its sweatshop problem

Nike is continuously tackling its most important environmental, economic and social impacts with the use of the GRI Standards for CSR/ ESG/ sustainability reporting: an all-round, complete, structured, and methodical approach used by 80% of the world’s 250 largest companies.

  • Promoting worker-management dialogue: Nike took action to facilitate worker-management dialogue in contract factories through permanent ESH (Environment, Safety and Health) committees, training both workers and management to engage in constructive dialogue.
  • Directly intervening to protect workers’ rights: When workers’ rights are not adequately protected by others and Nike believes it can influence the outcome, it may directly intervene, often seeking advice from external stakeholders with expertise on a topic.
  • Supporting transparency: Nike became the first company in its industry to publish online the names and addresses of all contract factories manufacturing Nike-brand products, constantly updating this list.
  • Monitoring Nike and contract factories: In addition to regular management audits in factories, Nike carries out deeper studies called Management Audit Verifications (MAV), which are both an audit and verification in one tool. The MAV tool is focused on four core areas: hours of work, wages and benefits, labour relations and grievance systems.
  • Reducing Nike-caused excessive overtime incidents in contract factories: All contracted suppliers have to comply with Nike’s Code of Conduct, which includes standards for contracted manufacturers relating to working hours, such as:
    • Compliance with legally-mandated work hours
    • Use of overtime only when employees are fully compensated according to local law
    • Informing employees at hiring if compulsory overtime is a condition of employment
    • Regularly providing one full day off in every seven and requiring no more than 60 hours of work per week
  • Setting industry-leading compliance standards: Contract factories in Nike’s supply chain are subject to strict compliance requirements, starting with risk analysis of the host country and Nike’s Code of Conduct. Additionally, Nike’s internal team of more than 150 trained experts monitors, amends and provides improvement tools to the factories. Nike regularly audits contract factories, with assessments taking the form of audit visits, both announced and unannounced, by internal and external parties, and works with accredited third parties, such as the Fair Labor Association (FLA), to carry out independent monitoring.
  • Helping contract factories protect workers’ health and safety: Nike helps its contract factories put in place comprehensive HSE (Health, Safety and Environment) management systems which focus on the prevention, identification and elimination of hazards and risks to workers, expecting its contract factories to perform better than industry averages in injuries and lost-time accidents.
  • Forbidding the use of child labour: Nike specifically and directly forbids the use of child labour in facilities contracted to manufacture its products. Nike’s Code of Conduct requires that workers must be at least 16 years old or past the national legal age of compulsory schooling and minimum working age, whichever is higher. In addition, Nike’s Code Leadership Standards include specific requirements on how suppliers should verify workers’ age prior to starting employment and actions a facility must take if a supplier violates Nike’s standards.
  • Promoting workers’ freedom of association: Nike’s Code Leadership Standards contain detailed requirements on how suppliers must respect workers’ rights to freely associate, including prohibitions on interference with workers seeking to organise or carry out union activities.

How Nike conducts stakeholder engagement

Nike benefits from constructive guidance from a number of external stakeholders, including civil society organisations, industry, government, investors, consumers and others. To identify and better understand emerging sustainability issues Nike works with Ceres (a sustainability nonprofit organisation), convening an external stakeholder panel and carrying out multiple dialogues that guide the development of its approach to reporting and communication.

How Nike solved its sweatshop problem

It was only 20 years ago that Nike was facing child labour and sweatshop allegations, with consumers protesting outside Niketown stores. All this is hard to believe, given the steady stream of corporate social responsibility (CSR) accolades in the last 10 years.

In 1998, then-CEO Phil Knight promised change. The company struggled to put new policies in place and enforce them. In 2005, Nike published its first version of a CSR/ ESG/ Sustainability report – in which it detailed pay scales and working conditions in its factories and admitted continued problems – and took the dramatic step of publicly disclosing the names and addresses of contract factories producing Nike products – the first company in its industry to do so.

More recently, Nike made this information available on an Interactive Global Manufacturing Map; there, you can click on a factory to see its name, number of workers, percentage of female and migrant workers and what’s made there. A major change from the days when Nike faced accusations of labour rights in its supply chain, it takes transparency to a whole new level.

Nike recognised its issues, demonstrated transparency and worked toward change – and, today, it is counted among CSR/ ESG/ Sustainability leaders.

 

Which Sustainable Development Goals (SDGs) have been addressed?

The SDGs addressed in this case are:

  • Sustainable Development Goal (SDG) 3: Ensure healthy lives and promote wellbeing for all at all ages
  • Business theme: Occupational health and safety
  • Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
  • Business theme: Workplace violence and harassment
  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Occupational health and safety, Freedom of association and collective bargaining, Abolition of child labor, Elimination of forced or compulsory labor, Labor practices in the supply chain
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Abolition of child labor, Labor practices in the supply chain

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



FBRH GRI Standards Certified and IEMA approved Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI-Standards Certified and IEMA approved Course you will be taking the first step in gaining the many benefits of sustainability reporting.

 

References:

This article was compiled using an article from the links below. For the sake of readability, we did not use brackets or ellipses but made sure that the extra or missing words did not change the article’s meaning. If you would like to quote these written sources from the original please revert to the links below:

http://www.theguardian.com/sustainable-business/2016/jan/02/billion-dollar-companies-sustainability-green-giants-tesla-chipotle-ikea-nike-toyota-whole-foods

http://www.businessinsider.com/how-nike-solved-its-sweatshop-problem-2013-5

http://www.triplepundit.com/special/roi-of-sustainability/how-nike-embraced-csr-and-went-from-villain-to-hero/

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