NIKE, INC. | Supply chain management report at Nike, Inc.

Status
13.04% votes in favour
AGM date
Previous AGM date
Proposal number
5
Resolution details
Company ticker
NKE
Lead filer
Tulipshare
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Decent work
  • Diversity, equity & inclusion (DEI)
  • Human rights
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders of Nike, Inc. ("Nike") request that the Board oversee and issue a report to shareholders, at reasonable cost and omitting proprietary information, assessing the effectiveness of its existing supply chain management infrastructure in ensuring alignment with Nike's equity goals and human rights commitments.
Whereas clause
WHEREAS: In the apparel industry, forced labor occurs both in the production of raw materials and during manufacturing, especially at lower tier suppliers. An estimated 27.6 million people are trapped in forced labor, with annual increases in forced labor driven entirely by the private economy.1 UN Guiding Principles require corporate responsibility to respect human rights within operations and supply chains. Shareholders agree Nike should expand "opportunity for women"2 considering a majority of Nike's garment workers are women3 and the exacerbated human rights violations during the pandemic.4

Nike's impact report includes continued support for the UN Global Compact.5 However, Nike’s communication on progress only meets six of seventeen Sustainable Development Goals.6 Nike has not disclosed adequate analysis regarding the efficacy of traceability steps taken to address the risks of alleged Uyghur forced labor across its supply chain tiers, nor does Nike disclose engagement with affected rightsholders or whether remedies are satisfactory to victims; KnowTheChain identified Nike policies in need of improvement: purchasing practices, worker voice, and remedy.7

In 2022, the EU adopted a Directive on corporate sustainability due diligence in global value chains, requiring companies like Nike to identify, prevent, end or mitigate adverse impacts on human rights.8 This Directive sets obligations, penalties and liability for large companies, with respect to their own operations, subsidiaries, and business partners.9

In 2023, garment-worker unions and labor-rights groups filed a complaint alleging Nike's treatment of workers and unpaid wages violated OECD guidelines.10 Nike allegedly owes an estimated $1.4 million in unpaid wages to Cambodian garment workers,11 with Nike's overall wage theft from workers alleged at $28 million.12

One possible approach for Nike to fulfil its responsibility to avoid causing or contributing to adverse human rights impacts in its supply chain is deployment of the ABA’s Model Contract Clauses. The contract clauses are aimed at ensuring responsible purchasing practices, such as reasonable assistance to suppliers, responsible exit, and victim remedies.13
Supporting statement
SUPPORTING STATEMENT: In the Board's discretion we recommend Nike's report include:
•Assessment of whether existing policies and implementation mechanisms, such as codes, guidance and supply chain contract terms ensure alignment throughout the value chain;
•Methodology and metrics to track and measure performance on forced labor and wage theft risks;
•Consistency with OECD Guidelines, UN Guiding Principles, and Sustainable Development Goals;
•Consideration of American Bar Association (ABA) Model Contract Clauses on human rights in the supply chain; and
•Whether the assessment yields any changes to Company policies, decision making, and implementation mechanisms.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Anima SgrForDespite the company's existing disclosures, additional information regarding potential human rights risk exposure in the company's supply chain would be beneficial to shareholders.
CardanoForNike is facing regulatory, reputational, and operational risks linked to controversies relating to human and labour rights violations in its supply chain. Cardano is therefore supporting this resolution, asking for further reporting on its supply chain due diligence.
Wesleyan Assurance SocietyFor

DISCLAIMER: By including a shareholder resolution or management proposal in this database, neither the PRI nor the sponsor of the resolution or proposal is seeking authority to act as proxy for any shareholder; shareholders should vote their proxies in accordance with their own policies and requirements.

Any voting recommendations set forth in the descriptions of the resolutions and management proposals included in this database are made by the sponsors of those resolutions and proposals, and do not represent the views of the PRI.

Information on the shareholder resolutions, management proposals and votes in this database have been obtained from sources that are believed to be reliable, but the PRI does not represent that it is accurate, complete, or up-to-date, including information relating to resolutions and management proposals, other signatories’ vote pre-declarations (including voting rationales), or the current status of a resolution or proposal. You should consult companies’ proxy statements for complete information on all matters to be voted on at a meeting.