Nike has come a long way since it was founded in 1972 on a handshake between an athlete (Phil Knight) and a track coach (Bill Bowerman). Since the early years we have applied many learnings in developing and operating a complex global supply chain. And we’re proud of the important role we can play in helping create an environment of collaboration and transparency. We now harness the power of innovation to create opportunities and lead by example in setting environmental and social targets. While we’ve made significant progress and continue to push ourselves and our industry to do better, we know that some questions still arise about how we work.
Yes. And we’re continuously working to do better. We constantly evaluate the impact of our business and set public targets for improvements. We innovate throughout our entire supply chain and promote responsibility toward workers, the community and the planet. We know that no single organization can solve the social and environmental challenges we all face, which is why we are committed to industry collaboration, transparency and innovation to help foster a better world. For more details, visit our FY16/17 Sustainable Business Report.
As a global company, our impact is greater than just what happens inside our doors. The majority of Nike’s environmental impact – before products get to the consumer – occurs in the supply chain. The most significant impacts are associated with the materials used in our products – we know that about 60 percent of the environmental impact in a pair of Nike shoes is in the materials used to make it. To address this, we are focused on our reduction targets in carbon and water – specifically in dyeing and finishing of fabric for apparel and footwear. We also continue to pioneer new ways to manufacture our products and seek materials innovations that enable us to use only what is needed to create the lightest, best-performing products for athletes. One example is Nike Flyknit technology, a revolutionary way to construct a shoe upper out of single strands of yarn, resulting in a strong, lightweight upper that drastically reduces waste and materials.
Yes – and more so all the time. We believe the science is right; climate change is real. Climate change is a global challenge that requires global solutions. We have a responsibility to act and innovate for our business, for athletes and for the future of sport, which is why we are pursuing the use of renewable energy and driving energy efficiency across our business.
We have committed to using 100 percent renewable energy in our owned and operated facilities by the end of fiscal year 2025, and we have already implemented on-site renewable energy generation at some of our largest facilities. We also enable and encourage use of renewable power in our contract factory base – since 2008, footwear manufacturers have cut energy use per unit by around 55 percent. That means today, it takes less than half the energy and generates less than half the emissions to make Nike shoes as it did eight years ago.
No, and we regularly monitor contract factories to remain vigilant. Nike specifically and directly forbids the use of child labor or sweatshop conditions in factories contracted to make Nike products. While Nike does not own or operate the factories that produce Nike product, we require them to comply with Nike’s Code of Conduct and Code Leadership Standards, which are audited by independent monitors as well as Nike’s field teams. Nike’s standards meet or exceed international standards set by the ILO conventions. To work on Nike product, employees in contracted factories must be at least 16 years old. In fact, the average age of a worker in a contract factory is 36 years old. We believe that placing the worker at the center of the workplace and having factory management that respects and invests in its workforce will result in lasting positive results for workers, the factory and Nike.
At least the minimum wage in their respective countries, and a commitment to the progressive realization of a fair wage. Nike is committed to responsible employment practices and we expect the same of our suppliers. In terms of wages, Nike’s Code of Conduct requires our suppliers to pay their employees at least the minimum wage, provide legally mandated benefits and comply with social insurance regulations required by country law. Nike’s Code of Conduct and Code Leadership Standards also contain requirements for partners to work on the progressive realization of a fair wage, defined as meeting employees’ basic needs including some discretionary income. We are facilitating pilot research studies with factories, in partnership with academic advisors, to test new compensation and incentive models to identify the most effective way to create new, easily understood compensation systems aligned with quality, efficiency and productivity that benefits factory managers, floor supervisors, line leaders and workers.
Read more about Nike’s standards on wages in our Code Leadership Standards:
We are working with fewer, better contract factories. Nike sources product from 554 contract factories that together employ more than 1 million workers across 42 countries.* Many of these factories belong to well established factory groups that are multinational companies in their own right. We do not own or operate these factories. To enter and remain in our supply chain, contract factories must meet our cost, quality, delivery and environmental and labor requirements. These requirements include strict Code of Conduct standards regarding labor and health and safety, as well as environmental performance. In 2005, we were the first company in the industry to disclose the names and locations of our contract factories, and today that information is available on the Nike Manufacturing Map.
Note: we do operate two in-house manufacturing centers in the U.S. where we make patented parts.
* Current as of April 2018
We start with sourcing from responsible supplier manufacturers, and we continually assess, verify and incentivize their performance. We are focused on working with long-term, strategic suppliers that demonstrate a commitment to engaging their workers, environmental responsibility and providing safe working conditions. We expect factories to comply with all requirements in our Code of Conduct and we provide strong incentives for improving their environmental and labor performance.
In FY13, we launched the Sourcing & Manufacturing Index, which scores factories on sustainability, putting labor and environmental practices on par with traditional metrics of cost, quality and on-time delivery. The index is a critical tool in encouraging performance improvement in factories and driving more business to those factories with the best performance. Based on this index, we have seen a steady improvement in factory performance with 91 percent of Nike’s contract factory base reaching a performance rating that demonstrates their commitment to valuing workers and improving environmental standards.* By 2020 Nike’s aim is for 10 percent of contract factories reach this level.
* Current as of FY17
Yes and this work will be ongoing. While we’ve worked to root out systemic issues, we continue to monitor and engage with contract factories to drive continuous improvement. Nike has worked to improve labor conditions in our footwear, apparel and equipment supply chains for more than 20 years. We’ve made significant improvements, driving positive change for workers in contract factories and across the industry. Nike’s ongoing contract factory partners will be those that transform their business by investing and building capabilities to engage and value workers.
As a company working with 554 contract factories that employ more than 1 million workers in 42 countries*, we recognize that issues do occur – and we take immediate action upon learning of any issues. We investigate what happened and work with the contract factory to address the issue and improve the process to help prevent problems from recurring.
* Current as of April 2018
Nike’s growth and future success is dependent on building a sustainable supply chain, which means working with long-term strategic suppliers that demonstrate a commitment to engaging their workers, safe working conditions and environmental responsibility. We also firmly believe that responsibility must be shared by governments, manufacturers, NGOs , academics, brands, unions and factory workers to enact long-lasting, systemic change.
We know that it is critically important to have multiple levels of checks and balances so that factories comply with our Code of Conduct and local laws. We have long believed that a combination of internal, external and independent audits and investigations, alongside government bodies enforcing the rule of law, together with watchdog institutions are crucial to enabling a robust system of industry oversight. In addition, we request that contract factories provide open access to accredited, independent organizations such as the Fair Labor Association and Better Work to carry out audits and help in remediation efforts where needed.
There’s a critical need for convergence of industry standards and a common Code of Conduct to drive positive change for workers and accelerate impact. The industry, NGOs, governments and universities need to come together and converge on a common set of standards so systemic change can take place across the industry.
We use a Restricted Substance List with the aim of keeping harmful chemicals out of our products. We are committed to the safety of our products, contract factory workers, consumers and the environment. We maintain a stringent Restricted Substances and Manufacturing Restricted Substance Lists, which prohibit the use of certain hazardous chemicals, and encourage our vendors and contract factories to embrace green chemistry and other ways to eliminate, reduce and responsibly manage chemicals used in both materials and in processes to make products. Through innovations like the use of water-based solvents and our environmentally preferred rubber, which contains 96 percnt fewer toxins by weight compared to the original formula, we aim to reach zero discharge of hazardous chemicals by 2020.
Nike’s community impact priorities focus on getting more kids active through early positive experiences with youth sports and schools. We invest in programs that prioritize youth sports and physical activity and help kids develop active lifestyles. We also support local community organizations unrelated to sport and physical activity when it’s the right thing to do. As a company, we support disaster relief and have strategic partnerships with non-profit organizations in other philanthropic areas.
We voluntarily publish a bi-annual Sustainable Business Report that provides in-depth information on a wide range of our initiatives and progress against our sustainability targets. You can read our past reports here. And we also invite you to explore this site for continued updates and stories on our progress.