Nike is the world’s largest supplier and manufacturer of athletic shoes, apparel and sports equipment. The company claims to be dedicated to promoting the safety, health and well-being of people and the environment.
But how much do its practices live up to its alleged principles?
Is Nike ethical?
We looked at several ethical issues including human rights, worker's rights, supply chain management, pollution and toxics, habitats & resources, environmental reporting, use of controversial technologies, political activities, anti-social finance and animal rights.
Our research highlights allegations of forced labour in the Nike supply chain, gender discrimination towards female athletes and parents, and failure to ensure all employees receive a living wage.
What’s more, the company is spending high amounts of money on political lobbying each year – that’s not to mention the extortionate wage packets received by company executives.
Below we outline some of these issues. To see the full detailed stories, and Nike's overall ethical rating, please sign in or subscribe.
People
In February 2020 the Washington Post reported that a large Nike supplier factory, Qingdao Taekwang Shoes Co., had been employing Uighurs from the Xinjiang region of China. The article referenced a report which said Uighurs in the Taekwang factory were working “under conditions that strongly suggest forced labor”.
A second Washington Post article published in March states "Nike said it was reviewing its suppliers’ hiring practices in China, after The Washington Post and an Australian think tank reported that members of the Uighur Muslim minority were making shoes for the American brand in conditions that suggested they were coerced.”
Nike also received the worst rating in the 2019 Tailored Wages UK report, published by The Clean Clothes Campaign in June 2019. The report stated: "The brand can show no evidence of a Living Wage being paid to any workers".
Nike also came under fire when Olympic runner and champion Alysia Montaño, who was sponsored by Nike, spoke out about how the company said it would pause her contract and stop paying her if she had a baby. This triggered public outcry and a congressional inquiry. Nike later announced a new maternity policy for all sponsored athletes, which guaranteed pay and bonuses for 18 months around pregnancy.
Environment
Nike received Ethical Consumer’s worst rating for its cotton sourcing policy, because it lacks a clear approach to use of pesticides and herbicides. Cotton accounts for 12.34% of all insecticide sales and 3.94% of herbicide sales, even though cotton covers only 2.78% of global arable land. Nike used some organic cotton and Better Cotton Initiative (BCI) certified cotton, but this wasn’t 100%. Companies that have the environment in mind should have a clear statement committing to the use of 100% sustainable cotton.
Nike also uses leather as a substantial part of its business. The leather industry uses a co*cktail of harmful chemicals to preserve leather. Tannery effluent also contains large amounts of other pollutants which can pollute the land, air and water supply, making it a highly polluting industry. Nike made reference to using Leather Working Group (LWG) certified leather in its Impact Report 2019, but no clear information was provided about what percentage was certified 100% LWG gold standard. LWG Gold is the only standard Ethical Consumer considers positive.
Politics
Nike is a dubious company in terms of financial ethics and political activities.
In 2019 Nike’s highest paid Executive Officer received an astonishing $13,968,022 – around £11m. Five named Executive Officers received over £1m in total compensation in the same year, which Ethical Consumer considers to be excessive pay.
The company also has subsidiaries in jurisdictions considered by Ethical Consumer to be tax havens, including in Bermuda, Delaware, Netherlands, Taiwan, Hong Kong and Singapore. At least 21 of these were considered to be a high risk company type (such as a holding company) for likely use of tax avoidance strategies.
According to Opensecrets.org, in 2019 the company had spent $1,180,000 on lobbying and in the 2020 election cycle made $511,737 in political donations to both Republican and Democrat parties. What’s more, in 2019 32 out of 38 Nike Inc lobbyists were said to have previously held government jobs.
Nike is also involved in lobbying. In February 2020 Nike was listed as a member of the US Council for International Business (USCIB). Ethical Consumer regarded USCIB to be a corporate lobby group which lobbied for free trade at the expense of the environment, animal welfare, human rights or health protection.
Animals
Nike lost a whole mark under Ethical Consumer’s animal rights category, because it retailed several products containing animal-based materials, including leather, wool and down/feathers.
Nike lost marks for not having a clear policy against mulesing. Merino sheep are specifically bred to have wrinkled skin, which yields more wool. Flies lay eggs in the folds of skin, and maggots can eat the sheep alive. To prevent this condition Australian ranchers perform 'mulesing' which involves carving large strips of skin and flesh from the backs of unanesthetized lambs’ legs and around their tails. The company stated “Nike supports the use of wool fiber that is sourced and certified from non–mulesed sheep and will consolidate its wool sourcing accordingly, as rapidly as supplies and pricing allow”. This was worded in such a way that it left open the possibility of the company using wool from mulesed sheep.
FAQs
Transparency issues – Nike does disclose some details on their suppliers but, in our opinion, not enough. In fact, the Fashion Transparency Index only ranked it at 41-50% in transparency. We also don't believe Nike is ethical because it doesn't guarantee a living wage across its supply chain.
How is Nike being ethical? ›
On the plus side, Nike has committed to not knowingly using Uzbek cotton—where forced labour and child labour have been rife—after being called out for it in early 2020. The brand also now ensures payment of a living wage in a small proportion of its supply chain.
How does Nike score on the Ethical Company Index? ›
Workers' Rights and Transparency: Nike receives an “It's a Start” in the “People” evaluation, with a Fair Labor Association-certified social auditing program. Their 51-60% score on the Fashion Transparency Index indicates progress in transparency but highlights the need for more comprehensive wage improvement programs.
What problems is Nike solving? ›
Nike is deploying technology to ensure its customers come away with the right sneaker fit, the first and every time.
Does Nike support people in the local community? ›
We invest in more equal, inclusive and active communities to help create a future where everyone can thrive. We work with more than 200 organisations around the world dedicated to levelling the playing field and addressing inequality. In its fiscal year 2021, Nike, Inc.
Where did Nike go wrong ethically? ›
Pandemic problems – Nike went under fire again for refusing to settle $2.2 million in unpaid wages and benefits to over 4000 garment workers in Cambodia and Thailand, abruptly dismissed during the pandemic.
What does it mean to be ethical? ›
adjective. pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct. being in accordance with the rules or standards for right conduct or practice, especially the standards of a profession: It was not considered ethical for physicians to advertise.
How much waste does Nike produce? ›
Nike generated a total of 3,942 metric tons of waste at its headquarters globally in financial year 2022. This was an increase of almost 50 percent in comparison to the previous financial year. The largest share of the waste generated at Nike's headquarters was recycled.
How strong is Nike's brand recognition? ›
All in all, 55 percent of sports and outdoor online shop users in the United States use Nike. That means, of the 94 percent who know the brand, 59 percent use them. How loyal are the customers of Nike? Around 51 percent of sports and outdoor online shop users in the United States say they are likely to use Nike again.
How does Nike contribute to society? ›
We support individuals of all abilities.
At Nike, our mission statement includes the phrase, “If you have a body, you are an athlete.” In FY22, we recognized—and donated a total of $625,000 to—to 13 nonprofits that educate people about disabilities and celebrate the contributions of those with different ability levels.
When customers discovered in 1996 that their shoes were manufactured using child labour, Nike's stock price collapsed by 58% in 19 months. This shock began Nike's deep interest in the social impact of their business and has since landed them at the top of the Dow Jones Sustainability Index (DJSI).
What are some negatives of Nike? ›
Additionally, Nike's customer-focused emotional branding and marketing have enhanced customer loyalty to the brand. However, there are also some drawbacks and risks. Nike faces challenges such as high prices, limited supply, strong competitors, and quality problems, which may impact its reputation among consumers.
Why is Nike so trusted? ›
Summary. As one of the most recognizable brands in the world, Nike masterfully intersects design, function, and style in its products. Its success is rooted in its innovative brand philosophy, which relies on a lot more than product design in a variety of different fields, such as its marketing campaigns and ads.
Does Nike support Lgbtq? ›
Nike is on a mission to make sport available to everyone, everywhere. We're continuing our commitment to helping shape a strong culture of LGBTQIA+ belonging and visibility in sport.
Does Nike treat their customers well? ›
Nike's unwavering commitment to delivering exceptional customer experiences ensures that it doesn't just sell products; it sells a lifestyle, a mindset, and an enduring connection with its customers. Nike has become a master of these types of initiatives and actions.
What does Nike provide to customers? ›
They offer a wide range of products, including footwear, apparel, accessories, and equipment for a variety of sports and fitness activities. Nike's product strategy is focused on creating high-quality products that offer exceptional performance, comfort, and style.
How is Nike being eco friendly? ›
Since 2008, the soles are composed of at least 25% recycled manufacturing waste, in facilities powered by 100% renewable energy. 90% of the waste materials from the air soles are turned into new cushioning systems. The Nike Flyknit is a fabric that produces 60% less waste than traditional footwear upper manufacturing.
How is Nike socially responsible? ›
Nike's CSR work, on the other hand, involves what Nike does best – design, innovation, and brand-building. They've attacked the problems of resource scarcity, workforce abuse, and social injustice with the power and prowess that comes from these core competencies and thus have been able to make real progress.
What is the Nike diversity issue? ›
Nike is currently the subject of a lawsuit filed in August 2018 by two former female Nike employees, which alleges that the company “intentionally and willfully” discriminated against women with regard to pay and promotions, and that its majority-male executives fostered a hostile work environment at its Portland, Ore. ...
Is Nike ACG ethical? ›
The ACG collection features sustainable materials such as recycled polyester and rubber, and manufacturing processes that minimize waste and reduce water usage. Nike has also committed to ethical sourcing and production, ensuring that their supply chain is free of forced labor and other human rights abuses.
