Supply Chain Industry Collaboration

We believe collaboration is key to raising the bar on industry standards, working conditions and issue remediation

We believe that as an industry we must improve standards, monitor working conditions and provide sustained remediation. However, this can’t be done without increased collaboration across a wide range of stakeholders.

Our Call to Action

In our FY14/15, we issued a call to action to align codes of conduct, compliance protocols and transparency around remediation to drive increased compliance across the entire industry.

Partners in Action

Today, we are working with a wide range of partners, including our suppliers, other businesses, governments, multi-stakeholder organizations, unions, civil society organizations and others to address risks and to strengthen the resiliency and capability of our supply chain.

We continue to invest in our relationships with partners such as the Sustainable Apparel Coalition, the Fair Labor Association (FLA), the Better Work Programme and the Social Labor Convergence Program. These organizations are integral to developing management capabilities within supplier facilities, measuring social performance and investing in working conditions across the industry. Additionally, we work with these organizations on joint standards, tools, programs and advocacy.

Global Partnerships

Some affiliations take place at a country level. For example, in Indonesia, Nike was an original signatory of the 2011 Freedom of Association Protocol in Indonesia, which was signed by unions, suppliers, and leading brands manufacturing in the country. The Protocol provides an implementation framework for suppliers to support union activities to fully respect the rights of workers to join unions of their choosing and to bargain collectively. We meet regularly with the National Committee to review progress and discuss further opportunities for improvement.

We are also working on addressing risks deeper in the supply chain, with a focus on advancing industry approaches and collaborative tools through existing associations. Nike is working with partners such as the FLA and the Better Cotton Initiative, which are seeking to address critical human rights risks. For example, we joined a project facilitated by the FLA in conjunction with İyi Pamuk Uygulamalari Derneği (IPUD), as well as several other international brands on improving employment practices in the Turkish cotton sector. The project focuses on preventing and addressing child labor and improving labor recruitment practices for migrant workers at the farm level.

Strengthening Laws

Beyond our own standards and programs, Nike advocates publicly for strengthening local laws protecting the rights of workers. In 2017 we joined the FLA, other brands and retailers to advocate for legislative reforms regarding freedom of association and collective bargaining in Mexico. We joined 20 other apparel and footwear brands and organizations in a letter to the Turkish Government to adjust the work permit program to improve conditions for Syrian refugees seeking work in Turkey. We also advocate for the inclusion of labor and environmental provisions when free trade agreements are negotiated.

We continue to look for opportunities to help support our suppliers. For instance, our partnership with the International Finance Corporation, established in 2016, offers factories that comply with our Code of Conduct better financing terms. So far, 23 factories are currently taking advantage of this program due to their continued sustainable performance.

No one organization can solve all the societal and environmental challenges we face. Solutions require input and collaboration from a diverse range of stakeholders including governments, businesses, trade unions, civil society and consumers. We will continue to work with other stakeholders to identify creative tools and approaches to advance human rights and sustainable business.

We continue to advocate for a system-wide approach to tackling sustainability challenges within the apparel and footwear industry because we believe that no single company or organization can solve today’s toughest sustainability challenges alone.

One challenge is the variety of sustainable performance measurement methodologies, data collection tools and audit methods in use in our industry. We believe standardized assessment tools will pave the way for more accurate measurement and benchmarking to drive collaboration and progress.

NIKE is a signatory of the Social Labor Convergence Program and a member of the Sustainable Apparel Coalition which seek to drive industry convergence on factory compliance to mitigate issues. Their approach is based on supplier ownership of responsible manufacturing and aligns with NIKE’s approach to drive sustainable and consistent performance with our factory partners. Our goal is to replace our current supplier factory monitoring system with this industry approach to monitor labor, health and safety, and environmental compliance.

The Sustainable Apparel Coalition

The Sustainable Apparel Coalition (SAC), with its broad membership of more than 250 leading apparel, footwear and home textile brands, retailers, suppliers, affiliates and academic institutions, is an ideal collaboration platform to set universal performance measurement standards.

The Coalition, through its Higg Index suite of online assessment tools, seeks to standardize the measurement of environmental and social impacts of apparel, footwear and home textiles products. The various modules of the Higg Index are built upon a common approach for holistically and consistently measuring and evaluating brand, product and supply chain sustainability performance.

These industry standards and tools will enable our suppliers to more quickly raise the social and environmental performance of their facilities while also aligning with regulatory bodies. Building on our collaboration with the SAC, we are sharing the Materials Sustainability Index industry-wide.

The Higg Facility Environment Module (FEM) is a self-assessment tool that helps determine the environmental performance of a facility, benchmark it against peers, and communicate the results. The annual assessments can be verified by SAC-approved, third party verifiers.

Nike is currently using the Higg Facility Environment Module to assess and verify information from our finished goods suppliers and in-scope materials suppliers for foundational environmental performance practices.

Social and Labor Convergence Program

Nike is a signatory of the Social Labor Convergence Program (SLCP), a pioneering initiative that seeks to develop a simple, unified and effective industry-wide way to assess labor, health and safety conditions in factories, with the goal of replacing current proprietary audit tools used by individual companies. This would reduce the number of audits, increase industry efficiency, reduce audit-related costs and allow participating organizations to invest resources previously designated for compliance audits into the improvement of social and labor conditions. It would also be a step in the direction of enabling a more collaborative approach to address risks and opportunities in the industry.

It is also based on a model of supplier ownership which aligns with Nike’s approach to sustainable and consistent performance. Nike has been actively involved in supporting the development of this tool and verification methodology as well as piloting this approach in our supply chain.