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Setting the benchmark in corporate integrity

Nike’s new ethics paint new corporate identity

The widespread criticism directed at Nike through the 90s has instilled a deep-seated culture of ethics at the corporation, most notably in its pursuit of a bettered CSR program
On the day before World Aids day some of the world's best footballers joined Bono and Professor Michel D Kazatchkine at an announcement of the partnership between Nike and (RED) at Nike Town, London. This unique partnership delivers a two-pronged approach to fight HIV/AIDS in Africa

The widespread criticism directed at Nike through the 90s has instilled a deep-seated culture of ethics at the corporation, most notably in its pursuit of a bettered CSR program

Nike, having been scrutinised through lengthy terms of past ethical negligence, has accordingly been made to focus more so on corporate social responsibility than the vast majority of its competitors.

With Nike having immediately implemented detailed remediation plans to combat unceasing pressure from critics, the sportswear manufacturer and globally recognised brand evidently considers corporate social responsibility an integral prerequisite for success.

Nike has been made an unerring subject of debate and investigation regarding worker’s rights. The global boycott campaign of the 1990s, in light of Nike’s descent into slave labour and abysmal working conditions, was so effective in its protests that it has since become an object lesson in how corporations can be made accountable in light of consumer discontent. “Nike was targeted by campaigners because it was the world’s best-selling brand and because initially it denied responsibility for any malpractice that may be taking place in its sub-contractor factories,” states Rob Harrison, editor of Ethical Consumer. However, “for a company which 20 years ago was denying that workers’ rights at supplier factories were any of its concern, Nike has come a long way,” ever-seeking to remediate claims against misconduct.

Revitalising the brand
One such instance to have surfaced in 2001 – shortly after the furore of the 1990s – emanated from Global Alliance’s investigation into Nike’s Indonesian factory practice. The organisation issued the following statement: 30.2 percent of workers had personally experienced, and 56.8 percent observed, verbal abuse. An average of 7.8 percent of workers reported having received inappropriate sexual comments, and 3.3 percent reported being physically abused. On being issued the report, Nike responded both swiftly and effectively, seeking to implement a code of conduct consistent across all its suppliers and furthermore partnering with Global Alliance to review 21 Indonesian factories in preventing further instances of the sort.

On Nike’s carrying out of strict preventative measures, Global Alliance stated that: “Upon due consideration, members of the Operating Council unanimously expressed their judgment that upon learning of the alleged violations surfaced through the Global Alliance assessment process, that Nike had acted in good faith, and developed a serious and reasonable remediation plan.” This time period marked a time in which many consumers were growing increasingly intolerant of poor working conditions, a feat that required multinational corporations such as Nike to avoid or to amend related misconduct if they were to retain the respect and loyalty of consumers.

Having manufactories in several developing nations such as China, Taiwan, Korea and Mexico, casual critics of Nike were often quick to cite a disparity in wages from nation-to-nation as an indication of Nike’s corporate social responsibility – or thereby lack of.

However, Global Alliance reported for 95 percent of the workers in nine participating factories to have received pay consistent with government minimum wage increases, moreover signaling Nike’s compliance with government-set targets. Having answered many of the work condition-related questions posed by critics, Nike adequately distanced itself from the problems to have characterised its operations through the 1990s and looked to establish a sustained culture of ethics.

Setting the standards
Nike, having moved away from the issues to have plagued its past, is currently targeting a consumer base more so concerned with the environmental implications of large multinational corporations. One such example being their plan, produced in the summer of 2011, to go toxics-free by 2020, in effect preventing suppliers from improperly disposing of toxic waste. Measures such as these are crucial in distinguishing Nike’s current operations with those to have characterised, and so ravaged, its reputation in the past.

Nike’s present goals in the way of corporate social responsibility are neatly outlined on their website: “As the world’s leading athletic brand, NIKE, Inc. is committed to delivering innovation and inspiration to every athlete. As we look at the challenges of today and the future, it’s clear that success relies on our ability to transition into the sustainable economy.” Nike, in this sense, recognises the need to accompany an innovative product with innovative means of preserving a sustainable future, as such reassuring customers of its prolonged intentions to pursue a principled means of conducting business.

Nike’s alignment with Michelle Obama’s recent ‘Let’s Move’ campaign, in March of this year, represents the precedence of ethical pursuits in projecting its brand values – namely in that the company is committing $50 million to the cause of protecting against child obesity. The initiative appears a neat fit for a company whose strategy is underlined by corporate social responsibility and consumer engagement programs, both of which are crucial in aligning the brand with associations of both responsibility and general goodwill. Nike’s general manager for access sport, Lisa MacCallum attesting: “This is who we are, this is our DNA, and this is what we care about.”

 

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