Governance

Nike aims to be a brand with purpose that moves the world forward. To achieve that, we need all parts of our value chain to understand and deliver on our goals—from our leaders to product designers, to the employees in our stores, and workers in contracted factories who make our products. A strong governance structure, coupled with a sustainability mindset, provides the foundation for driving collective decision making and accountability across the company.

Corporate Responsibility, Sustainability & Governance Committee

Our ability to succeed starts with leadership commitment at the highest level. The Corporate Responsibility, Sustainability and Governance (CRS&G) Committee of our Board of Directors is responsible for reviewing Nike’s significant strategies, activities and policies regarding sustainability, contract manufacturer labor practices, community impact and charitable activities, among other duties, and make recommendations to the Board. The committee sets the tone and pace for sustainability within Nike’s business strategy.  Learn more.

 

Responsibilities include:

  • Review and provide guidance to management on sustainability issues and impacts, and the integration of sustainability into Nike’s business, including innovation, product design, manufacturing and sourcing, and operations.
  • Review, provide guidance to management, and report to the Board on sustainability (including labor practices) within Nike’s supply chain, and review reports of Nike’s sustainability audits.
  • Review and provide guidance to management regarding Nike’s work with industry organizations and non-governmental organizations concerning corporate responsibility.
  • Annually review the activities of the Nike Foundation and Nike community impact initiatives.
  • Review and make recommendations to management on reporting to shareholders and other communities regarding corporate responsibility activities.
  • Review, provide guidance to management, and report to the Board regarding the involvement of significant corporate responsibility issues in major business decisions, to protect Nike’s valuable goodwill, and human and intellectual capital.
  • Review and make recommendations to the Board with respect to any shareholder proposal that relates to the matters overseen by the Committee.
  • Annually evaluate the performance of the Committee and report the results of the evaluation to the Board.
  • Review and assess annually the adequacy of the Committee’s charter.
  • Perform such other duties and functions as may, from time to time, be assigned to the Committee by the Board.
Purpose Committee

The Purpose Committee (formerly the Performance & Disclosure Committee) provides direction and overview for the end-to-end integration of NIKE’s work in diversity and inclusion, community, labor and environmental impact. They challenge our business to better understand our social and sustainability impacts, set ambitious targets for improvement, and overcome obstacles in achieving progress. Established in 2012, the Committee meets regularly to review these targets, performance, and disclosures.

 

This Committee plays a key role in shaping NIKE’s evolving approach to transparency and disclosure. We believe that companies like NIKE play an important role in helping to address some of the complex challenges facing our global community today.

Nike Teams Focused on Sustainability

Nike’s core Sustainable Business & Innovation team is part of Nike’s Advanced Innovation function. The SB&I team links sustainability and leadership across our value chain including innovation and product creation, sourcing and manufacturing, facilities, logistics and retail.

 

We have also connected teams across Nike with a common sustainability vision. Specifically, we have sustainability-focused teams within Product Creation, Nike Direct, Global Sourcing & Manufacturing, Supply Chain and Brand. These teams report to the leaders of those areas and coordinate directly with SB&I through our Business Integration team.

2020 Sustainability Targets

Company-wide, we have long used corporate sustainability targets to drive accountability and measure progress. We leveraged the development of our FY20 targets to further integrate sustainability into business operations. The embedded sustainability teams drove the target-setting process for their functions with support and guidance from SB&I. We expect targets to continue driving shared progress across our value chain into the future.

 

Our targets cover progress against environmental, social and community topics. Nike publicly reports progress to these targets in our regular Sustainable Business Report. We also provide quarterly updates to our key business partners, the executive Performance & Disclosure Committee, and the Nike Board of Directors. Learn more about our progress to 2020 Targets.

Sustainable Manufacturing and Sourcing Index (SMSI)

In 2012, we launched our Sustainable Manufacturing and Sourcing Index (SMSI), a system for combining factory ratings for lean manufacturing and human resource management, with those for health, safety and the environment (HSE). This system gives environmental and human resource management performance equal weight with business metrics in our sourcing, increases transparency to reduce noncompliant practices, and creates targets and incentives to improve performance and go well beyond compliance.

 

Our SMSI has become an important input into factory selection, encouraging performance improvement, eliminating underperformance in factories, and driving business to those that perform best. Reaching a bronze rating on our SMSI demonstrates full factory compliance with our Code of Conduct and Code Leadership Standards, which are designed to protect the rights of workers and create a safe working environment. Those that reach silver and gold reflect an additional commitment to progressively embedding lean manufacturing and performance management systems.

 

Materials Sustainability Index (MSI)

The Nike Materials Sustainability Index (MSI) helps our teams to choose better materials from better vendors by allowing them to compare the environmental footprints of more than 50,000 different materials, supplied by more than 700 vendors.

 

The MSI provides scores based on a variety of relevant environmental criteria, forming the basis for how we measure product sustainability. The index takes into account the energy, water and chemicals used to make materials, as well as waste generation. It also rewards material suppliers for participating in sustainability programs. By leveraging the MSI, our teams can choose materials with verifiably lighter environmental footprints.

 

The materials score feeds our product indices—the Footwear Sustainability Index and the Apparel Sustainability Index. These indices provide a way for our product creation teams to measure the complete environmental profile of each product and make better choices in planning, designing and developing products. The materials score from the MSI accounts for more than 50 percent of the score for both footwear and apparel, which helps teams understand the impact of their choices.

 

Teams also understand how they can improve the sustainability scores of products by using better materials, such as cotton that is recycled, organic or certified by the Better Cotton Initiative. Teams can also claim incentives to improve scoring, such as using materials that require fewer chemicals or use less energy during manufacturing.

Stakeholder Engagement

Throughout our journey from corporate responsibility to sustainable innovation, we have benefitted from constructive counsel from and engagement with a variety of external stakeholders—civil society organizations, industry, government, consumers and others.

 

Engaging stakeholders helps us understand and manage emerging issues and risks, and also helps us identify opportunities for innovation. Nike engages stakeholders informally, for example in our work with coalitions and industry associations such as the Sustainable Apparel Coalition and We Mean Business. We also engage in more formal ways as part of our approach to issues or challenges, for example our work with the World Resources Institute on our approach to assessing our greenhouse gas footprint.

 

Since our first Corporate Responsibility Report in 2001, Nike has formally involved external stakeholders as part of the reporting process. This engagement has been a critical tool in helping us improve the quality of our reporting and approach to corporate responsibility and sustainability overall.

 

For the FY16/17 Sustainable Business Report, we worked with Ceres to engage with a set of stakeholders three times over a period of a year to provide guidance on our transition to more targeted reporting and increased storytelling on our website.

Employee Accountability

We’re driving deeper accountability across the business by including sustainability aspects in the performance evaluations of employees in our product engines. The performance reviews for footwear and apparel employees include sustainability deliverables and objectives, such as providing category teams and leadership with progress updates against Nike’s product sustainability indices.