Accumulating over $30.6 Billion in annual revenue (statisca.com), Nike is considered one of the largest multinational corporations today. This means Nike has factories operating in different parts of the world but is managed from one home country; Oregon. So, what does a prominent world-renowned company like Nike do with all that money? You’d expect them to reinvest profits into sustainable business practices that would ultimately benefit the earth someday (Jurevicius, 2013). Sustainability entails that practices can be done indefinitely (EQ1, 2018) without wasting resources or damaging the planet, endangering the wellbeing of people involves while still maintaining a good level of economic production. Since Nike is spread around the earth, globalization has led many manufacturers focus on increasing the revenue and profitability, and as a result, most of these Nike branches are set solely on maintaining its economic sustainability and neglect the other 2 pillars thus, affecting the planet through their environmental damage or social discontent. This pleads the question: is Nike a sustainable business, or is this just a cloak to hide and convince consumers into thinking the company upholds the true values of a B-Corporation, a company that has been thoroughly assessed and approved for meeting all the standards of sustainability? This paper will shed a light on the horrifying cases of exploitation made by Nike’s Indonesian factories and extensive environmental destruction in Asia, whilst highlighting the ways in which Nike has vowed to equalize its pillars, and fix its problems to work towards a sustainable future. Essentially, this essay will be answering the question, “To what extent does Nike represent the ideals and actions of a true B-Corporation?”
Nike’s mission statement is “To bring inspiration and innovation to every athlete* in the world.” (Nike Mission Statement…) The legendary University of Oregon track and field coach, and co-founder of Nike said, “If you have a body, you are an athlete.” (Nike Mission Statement…) In an email letter sent to Nike’s staff by CEO Mark Parker, he states, “Nike believes in a world where everyone celebrates the power of diversity.” (Connelly, 2017) Only 20 years ago, consumers were protesting outside Nike stores amid child labor and sweatshop allegations. It’s almost unimaginable, given the steady stream of corporate social responsibility (CSR) acknowledgements the company has managed to gain in the last 10 years. In 1998, former CEO, Phil Knight made a public speech promising change (Newell, 2015.) In 2005, Nike was the very first company in its industry to demonstrate transparency when it published a complete list of its contract factories to the public. Later that same year, Nike published a full CSR report. Since then, the company has been consistent with releasing official updates on its sustainability (Sustainability efforts…) and progress—if any. Nike has gone on record to say that sustainability is one of the key components to success and no forward-thinking company can survive without sustainability efforts. These beliefs have taken Nike to where they are today, taking CSR very seriously, they continuously strive to reduce the negative impact its manufacturing practices have on the environment. Over the past few years, the implementation of environmentally sustainable practices has been evident in Nike’s production such as, they have never used any fur or exotic animal skins on any of their products and are focusing new efforts on more sustainable material through new innovations—color dry technology, which will help eliminate the use of water and chemicals as well as the ‘flyknit’ design which substantially reduces waste (Environmental Impact….) In the last 3 years, petroleum based solvents have been switched out for water-based chemicals which are less harmful to the environment. Nike officials say that they have cut down the amount of unhealthy solvents by 75%. Additionally, Nike made a public commitment to reduce carbon emissions by over 50% by 2025 (Environmental Impact….) Though it is clear that Nike caters towards environmental sustainability over social, there is one point to be brought up. The Nike campaigns are very strong with female empowerment, figures like Bella Hadid and Serena Williams represent the brand. The company is equally representing women to the public but are doing different behind closed doors. Back in the 1990s, Nike’s contract factories located in Indonesia came under fire for mistreating its female workers. A human rights activist, Jeff Ballinger reported low wages and bad working conditions in one of Indonesia’s factories in Sukabumi (How Ethical is Nike…) This was the accusation that led to deeper investigation of the social working conditions. Workers claimed they had shoes thrown at them for making a mistake cutting the rubber soles, another worker remarked, “Our only choice is to stay and suffer or speak up and get fired.” (Nike workers…) Upon further investigation, human rights activists found that the workers in the Indonesian contract factories were required to work 60 hours a week (HRW…), and were getting paid $0.50 an hour, barely enough to buy food and rent out a bunkhouse lodge (HRW….) As these rumors of unethical behavior traveled the globe, Nike didn’t respond right away. Soon after, Nike’s Converse shoe factory in the suburbs of Jakarta sparked more outrage when workers claim they are being abused physically and mentally by supervisors. Slapping them in the face, kicking them and calling them dogs and pigs. When this information arose, and was made known to the public, Nike stayed silent. Nike claimed that they didn’t own these factories, but rather, had signed a contract with them so Nike insisted that they weren’t able to do anything about the situation (Chen, 2014). Moreover, to add to the negative, Nike does use leather, wool and down feather in their products without specifying its sources (How Ethical is Nike…) This can be problematic because of the animal’s welfare as well as the fact that the workers are unknown and unregistered therefore, are unguaranteed. As for environmental impacts, Greenpeace recently released that the factories in China are polluting two of its main rivers with hazardous chemical waste (Pachon, 2016.) These chemicals are known to have hormone-altering properties that can cause the feminization of fish and reduced sperm count for men who consume and digest the fish (Pachon, 2016.) Although these chemicals hurt the planet, Nike has not committed to eliminate the use of hazardous chemicals from its supply chain. As well as the waste pollution, the manufacturing stages of the shoes also play a big impact on the environment. Most of the machineries used to produce these shoes require fossil fuels which will turn into greenhouse gases (Desertnews…)When it comes to social sustainability, Nike has become a well-known case of human rights violations but are working toward a better social pillar especially in their factories. Nike has realized that its customers are gradually becoming more environmentally conscious and are only working with retailers who are sustainable. It takes its responsibilities towards environment quite seriously and this has become a focal point in the company’s marketing approach (Nike’s Marketing Approach…) Though these environmental measures might be promising, the company does not do as well as it should in the social department. With an annual revenue of over $30 Billion, they can certainly afford a change.
Despite Nike showing, on multiple-occasions that they want to improve their business practices and work towards building a more sustainable future, right now, their actions do not truly hold up their company-values-and-are-not-deserving of a B-Corporation label. This report has examined Nike on either side of the sustainability-spectrum, and conclude that the company leads in-environmentally-sustainable business practices and should be applauded in doing so. However, they have a ways to go in terms of social sustainability as there are still recent cases of unfair treatment of workers. Nike-resembles an MNC as it prioritizes economic sustainability and is generating billions in-revenue—nonetheless, in order to be a B-Corporation,-I suggest that Nike works more closely with secondary labor associations-to-ensure their-practices-are-sustainable, and that the programs implemented are effective, especially on the social sustainability front.