Nike will have improved labor conditions at all its factories worldwide, be a climate-neutral company, and reduced the waste from its products by 17 percent, according to new goals the company announced today.
“We see corporate responsibility as a catalyst for growth and innovation” said Nike CEO Mark Parker. “It is an integral part of how we can use the power of our brand, the energy and passion of our people, and the scale of our business to create meaningful change.”
On the labor side, Nike plans to eliminate excessive overtime in all its contract factories worldwide by 2011. Citing excessive overtime as one of the biggest labor compliance issues the industry faces, Nike said it has set a high priority on that and other working conditions for its nearly 800,000 contract factory workers.
Waste reduction goals make up a big chunk of yesterday’s announcement. Nike said it will redesign all its branded products — including more than 225 million pairs of shoes sold every year — to meet its 2011 baseline goal of reducing footwear waste by 17 percent and reducing packaging waste by 30 percent.
Nike’s CEO, Mark Parker gives a message on Nike’s change in understanding CSR and its’ value has moved from the periphery to the core of business strategy.
Among the many things we learned were two significant truths.
First, as a result of the organizational and strategic changes made in FY05-06, corporate responsibility at Nike has grown beyond its role as a tool to define, discover and address compliance issues, or to manage risk and reputation. Today, corporate responsibility no longer exists on the periphery as a check on our business, but is assuming its rightful role as a source of innovation within our business. Corporate responsibility is no longer a staff function at Nike. It’s a design function, a sourcing function, a consumer experience function, part of how we operate.
Second, we know that incremental progress isn’t good enough. Nike is competitive. We don’t want to get better, we want to win. If real change is to occur in our supply chain and contract factories, in the communities in which we operate and in the broader world we influence, then small steps will always fall short of our potential. Big goals are needed to realize big achievements. So we’ve set a series of strategic business targets for ourselves that are aggressive but achievable by FY11.
Nike not only moves CSR to the center of its business strategy (Download – PDF) and it is also making a difference to its supply chain where 800,000 workers work in contract factories. That is the area where it can make the greatest difference.
Nike’s Considered Design and the Environment (Download – PDF)
A great product would be one that doesn’t produce waste at any stage of its lifecycle. That holy-grail product would serve its useful purpose to consumers, delivering a top-performing product that produced no waste in its development and results in no waste at the end of its useful life. That product does not exist today. But that doesn’t stop us from tackling waste and use of chemicals from the start and putting our innovation skills to use.
Workers in Contract Factories (Download – PDF)
When we look at our overall footprint in the world, the needs of the almost 800,000 workers in our contract supply chain overshadow any other direct constituency. We estimate that 80 percent of these workers are women aged 18 to 24, many of whom are the first women in their families to work in the formal economy. They have the potential to be significant agents of change within their families and their communities, both today and in the future. Yet they are typically poorly educated, living against a precarious backdrop of poverty and insecurity, within emerging economies, all of which leaves them particularly vulnerable to infringement of their rights.
Consequently we believe the most fundamental impact we can have in the world today is to impact positively the working conditions in our global supply chain and the industry as a whole.