On the road to social reporting and transparency

The Financial Times, Wednesday April 11 2005, published an article

"Nike makes the step to transparency"

It makes compelling reading. Nike has been silent on social reporting for 3 years.

This relates back to a courtcase in 2002 between Nike and Mark Kasky, a labour rights activist.

Case Background

In 1998, California resident Marc Kasky brought suit against Nike Inc. on behalf of consumers in the state of California, claiming that Nike and/or its representatives had made the following untrue statements regarding Nike’s practices in China, Vietnam, and Indonesia:

1) "workers who make Nike products are protected from and not subjected to corporal punishment and/or sexual abuse,"
2) "Nike products are made in accordance with applicable governmental laws and regulations governing wages and hours,"
3) "Nike products are made in accordance with applicable laws and regulations governing health and safety conditions,"
4) "Nike pays average line-workers double the minimum wage in Southeast Asia,"
5) "Workers who produce Nike products receive free meals and health care,"
6) "GoodWorks International report proves that Nike is doing a good job and 'operating morally'" (GoodWorks International is an organization formed by former U.S. Ambassador to the United Nations Andrew Young and commissioned by Nike for the purpose of investigating the company’s operations and Asia),
7) "Nike guarantee(s) a ‘living wage’ for all workers who make Nike products."

Nike's return from this point is best summed up by Hannah Jones, Nike's VP of Corporate Responsibility

We felt the risks of any future lawsuit were far outweighed by benefits of transparency. Because if we've learned anything as as company, its that closing down and not talking about the challenges and opportunities doesn't get you very far."

Nike under pressure from a powerful lobby - has responded with what is perhpas the most far reaching response by any company to date. It provides details on supply chain practices, workforce diversity, the environment, community programmes, and socially responsible investment.

The FT reports that it was directly due to the Kasky case that Nike brought much greater rigour and focus to these critical areas of its business to restore credibility. Niike it seems recognises that this process will ultimately result in good business not just an exercise in reputation.

Would Nike have done this without a community action? Probably not, but it has understood the days of ducking the curved ball are over, and that by positively embracing these issues it too can make the community work as much for it as against it.