CSR: Is Nike just doing it or not?

As many of today’s corporations are focusing on the social responsibilities of their businesses, there are still many world-famous brands receiving criticism for their lack of building a sustainable work environment. One company that is consistently on society’s radar is Nike, Inc. As the largest athletic apparel producer in the world, Nike has become a global representation of business that faces constant accusations of human neglect. In response to years of questioning and examination, Nike is developing a corporate social responsibility plan that focuses on improving working conditions in factories and making sports more available to youth all over the globe.

Nike, Inc. is based in Beaverton, Oregon and is currently labeled as the largest shoemaker in the world. Their shoes are sold in over 160 countries and include name brands such as NIKE, Cole Haan shoes, Nike Bauer Hockey, Umbro, Converse and Hurley International. In 2007, Nike, Inc. reported $16.3 billion in sales, leaving profits of nearly $1.5 billion. Selling to over 19,000 retail accounts in the United States, Nike’s global work-force expansion is required for such large profit margins and mass production. As the conditions of 700 factories worldwide have been a source of much heated debate, the allegations against Nike have led them to respond by working with the Global Alliance to better working conditions in their factories.

Environmental issues are hot topics on every business agenda, especially when it comes to an appealing pulic image. For this reason, Nike created the “GreenXchange” campaign in 2009. Basically, the GX program “bridges some key gaps in the way that green technologies are developed and utilized” (Nikebiz). Ultimately, the GreenXchange will “enable the creation of sustainable revenue streams to fund new green technology development” (Nikebiz). The expected launch of this program is expected sometime in 2010.

The most infamous issue Nike’s faced for over 20 years are concerns expressed about the physical working environment of 800,000 employees worldwide, with emphasis on Asian workers. Nike has responded to these reports, but some labor activists believe Nike’s corporate social responsibility plan is a weak excuse for public relations. Jeff Ballinger, a labor activist, heavily criticized Nike’s social responsibility efforts to Corporate Crime Reporter: “The CSR cost for Nike is about $10 million to $12 million a year, just for the CSR staff and expenses, to go to these sustainability meetings all over the world…” (SourceWatch). Although it costs Nike millions to attend these conventions, Ballinger claims the costs are no where near what they should be spending to improve the quality of life for their workers: “I figure 75 cents per pair of shoes to the worker would fix the problem. If Nike instead paid workers 75 more cents per pair of shoes, do you know what that would cost Nike compared to the CSR costs? That would cost them $210 million a year” (SourceWatch).

According to Mark Parker, NIKE Inc.’s President and CEO, “sustainability is key to Nike’s growth and innovation.” Whether or not critics agree on how Nike should allocate their earnings, the corporate social responsibility efforts do exist. Some argue corporate social responsibility campaigns are not effective and have the “it’s all or nothing” mentality, however, in Nike’s situation their efforts have made them sustainable because they have maintained recognition as a leading world business (Fortune 500).

All in all, being socially responsible is overwhelmingly complicated. The efforts Nike, Inc. has to make to improve their image entails more than a “feel-good” public relations campaign. Like many of their competitors, Nike is striving to appear socially friendly and responsible while transforming into a more sustainable work force.

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SourceWatch.