Company Profiles

Nike

United States

Nike is one of the leading consumer brands in the world, and a long time leader in environmental sustainability issues. Nike has been assessing and addressing the issues associated with chemical use in its products since 1998. For example, through ongoing design work the company has created a rubber formulation that contains over 95% fewer toxins, which is now used in approximately half of the company's footwear. Additionally, volatile organic compound (VOC) usage per pair of shoes has been reduced by 95% since 1995. The company has been an industry leader in incorporating organic cotton into its products and supporting the development of the organic cotton industry. Nike acknowledges the inevitability of a carbon-constrained economy, and is working to address the associated business challenges. The company has a strategic carbon reduction plan and aims to achieve "carbon neutrality" for a portion of its facilities and travel by 2011. Nike recognizes it needs to take responsibility for the environmental footprint of its contract manufacturers and is beginning to track the footprint of these facilities to reduce impacts. Following from this, Nike's supplier programs address wastewater, hazardous waste, and lean manufacturing techniques. While Nike's environmental achievements are clear, there is significant progress yet to be made, as illustrated by the company's goals for expanding its carbon neutrality efforts, as well as its use of environmentally preferable materials. Nike could also improve the quality of its reporting by developing and providing trend data for its key performance indicators, and by ensuring future reports are independently audited and verified.

Contract Manufacturers and Labor Concerns

Clearly, there are many concerns regarding labor issues in overseas factories and Nike has received significant media attention. Nike acknowledges ongoing problems, appears to have made progress over the last 10 years, and is showing industry leadership. Oxfam International's Offside! Report lists Nike in a group of five leading apparel companies on labor rights issues, and acknowledges the company for being the first to publish its overseas factory locations (currently only three companies in the industry provide this level of transparency). Canada's Ethical Trading Action Group also places Nike in its leading pack of companies for attention to these issues. Additionally, the Worker Rights Consortium recently issued a memo indicating that a Dominican Republic factory, which had received contracts from Nike, had agreed to pay severance to its workers after receiving pressure from Nike and another sports brand. The issues are broader than one company and one industry. The global problems of working conditions and wage inequities are rooted in the economic system of globalization and Portfolio 21 believes solutions to these issues will require significant action on the part of individuals (as consumers, citizens, and workers), as well as governments and business organizations. To read our policy on this issue, and our suggestions for action, please visit our Globalization, Human Rights and Social Justice Policy.

To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 6/30/07 and may not reflect current opinions or subsequent events.