Investors’ “grave concern” over the possibility of slavery in Nike supplier chains

Published: March 16, 2023

American sportswear company Nike, is coming under increased scrutiny from its shareholders since it continues to say nothing in response to worries regarding forced labour and worker well-being in its supply chain.

Tulipshare, a shareholder activist investment platform that offers online brokerage to support its corporate campaigns, a longtime shareholder of Nike, expressed “grave concern” about Nike’s “unresponsiveness” to requests about removing forced labour from its business operations and throughout its value chains in an open letter. By declaring its endorsement of the UN Guiding Principles on Business, Tulipshare further compelled Nike to acknowledge its business obligation to uphold human rights.

Nike has been accused of breaking OECD regulations on the treatment of workers in its worldwide supply chain in the wake of the Covid pandemic. According to the lawsuit, Nike’s supply chain’s garment employees have seen unprecedented levels of gender discrimination, arbitrary wage reductions, layoffs, and terminations since the Covid outbreak started in March 2020.

In their letter, Tulipshare claimed that despite emailing Nike’s internal affairs department on March 4 and October 21 as well as January 27, 2023, it had not gotten a single response. Nike has demonstrated through its silence that it wilfully ignored shareholder concerns. concerning the possibility of forced labour, which is particularly important to the business practises and supply networks of companies in the clothing and footwear (A&F) industry. The industry is estimated to employ more than 60 million people at the production level, the majority of whom are women and migrant workers.

They are appreciative that Nike has pledged to strengthen its labour supply chain by making some changes, as they have stated in previous outreach initiatives. Nonetheless, they are concerned about Nike’s disclosures’ ambiguity regarding whether the company is on track to achieve specific objectives. They are also quite concerned that Nike does not have a strong enough system in place to address the requirements of disgruntled supply chain workers, which might lead to human rights breaches like pay theft. theft. Tulipshare is one of the more than 160 investors who have signed the KnowTheChain statement, representing over US$7 trillion in assets under management.

The letter goes on to express their deep concern with Nike’s low engagement and placement in the KnowTheChain A&F benchmark. The benchmark evaluates 60 of the largest A&F companies that are publicly traded in regards to their efforts to combat forced labour in their supply chains. In 2021, Nike only earned 62 points out of a possible 100; this includes ratings of 48 for the topic of purchasing methods, 38 for worker voice, 63 for traceability and risk, and 70 for monitoring. Tulipshare knows that in addition to ensuring that a livable wage is paid in a small portion of its supply chain, The last stage of production and a component of Nike’s supplier chain have FLA Workplace Code of Conduct certification. Nike only received a score of 51-60% on the 2021 Fashion Transparency Index, despite its great efforts, showing that much more work needs to be done to ensure the safety of its employees.

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