Nike is not only the largest supplier of sportswear in the world. It is also one of the prime examples of a multinational corporation that has used its resources and influence to create value through a dedicated corporate social responsibility or CSR strategy. The company has even made CSR part of its mission and vision while also aligning its CSR programs with its branding. Nevertheless, considering how it allocates and uses a portion of its capital for various causes, the CSR strategy of Nike has become a source of its competitive advantage and a tool that complements its strengths and overall marketing strategy.
Understanding and Appreciating the CSR Strategy of Nike: Moving the World Forward Through the Power of Sports
The company faced criticisms for human rights abuses transpiring in its outsourced manufacturing facilities. It was one of the several Western companies that were part of the global sweatshop scandals throughout the 1980s and 1990s. The company was specifically accused of tolerating the use of child labor and poor working condition in its factories.
Nevertheless, to quell negative sentiments from the public and deal with boycotts, Nike created a dedicated department in 1996 responsible for managing the compliance of its outsourced partners with labor standards. The company created a proper department in 1998 following its realization that corporate social responsibility goes beyond compliance.
The first Corporate Responsibility Report was published in 2001. Reporting took various forms. These included the Sustainable Business Performance Report which was first published in 2010 and the Impact Report which was first published in 2018. The Impact Report has since become its main document detailing the milestones and targets of its CSR strategy,
Noteworthy CST Programs
The entire CSR strategy of Nike is built on four focus areas or main pillars. These are workforce empowerment, ethical supply chain, community empowerment, and environmental protection. The following are the details of each pillar:
• Diversity, Equity, and Inclusion: Part of the CSR strategy of Nike is to build more equitable and inclusive practices to empower its employees and create its envisioned workforce. It has rolled out tactics aimed at budling a team that is representative of the people it serves and accelerating the careers of its employees.
• Responsible Sourcing: The company has also advocated for better practices and greater transparency throughout its global supply chain. It has used its resources and influence to help create and advocate for policies, practices, and tools that promote the interests and protect the welfare of people working for its suppliers.
• Empowering Communities: It has also made significant investments in programs designed to strengthen communities through play and sports. The company has collaborated with more than 100 community partners to deploy research-backed and inclusive play-based and sports-based programs for children.
• Protecting the Planet: Another notable element in the CSR strategy of Nike is its commitment to promoting sustainability and addressing pressing environmental issues. It uses scalable innovations to tackle issues like carbon emission, waste generation and waste disposal, water conservation, and sustainable chemistry.
Nike has developed and deployed specific initiatives and programs under each pillar. Some of these programs are even intended to fulfill the goals and objectives of at least two pillars. The following are some of the notable CSR programs of Nike:
• Business Diversity and Inclusion: It has a specific program tailored to promoting diversity and inclusion among its various business partners. These partners range from suppliers of raw materials and contract manufacturers to marketing agencies and general contractors. The specific Business Diversity and Inclusion or BDI program requires interested business partners to meet a set of standards.
• The Girl Effect Movement: Nike is a founding member of the global movement called Girl Effect. It aims to address the root cause of gender inequality by empowering and educating adolescent girls in developing countries. The specific program attached to the movement focuses on providing girls with access to education, health services, mentorship, and opportunities for economic empowerment.
• Product Red Involvement: The company has also produced sportswear products under the Product Red brand. Product Red is an initiative that aims to raise awareness and funds to help eliminate transmissible diseases. Companies like Apple and Starbucks have also developed products under the brand. A portion of sales from Product Red products goes to the Global Fund to Fight AIDS, Tuberculosis, and Malaria.
• Sustainable Apparel Coalition: Nike is one of the founding members of the Sustainable Apparel Coalition that works on developing and promoting sustainable practices across the textile and fashion industries to promote environmental protection and positive social impacts. The Coalition is a collaborative effort involving various companies or brands, retailers, manufacturers, and non-government organizations.
• Nike Better World: It has developed an initiative called the Nike Better World that focuses on sustainable design and innovation. The specific goals and objectives of this initiative center on creating products that are more environmentally friendly. Examples include products that use recycled materials and even production processes that utilize minimal raw materials and generate less waste.
• Design To Move Partnership: The company has partnered with other organizations to launch the Design To Move Initiative which aims to combat the global physical inactivity epidemic. It focuses on creating specific programs and opportunities for people, especially children, to engage in physical activity and lead healthier lives. The initiative also conducts studies documenting the effects of physical inactivity.
• Nike Grind Materials: Nike has developed a collection of materials called Nike Grind. These are composed of pre-manufacturing scraps, recycled post-consumer products, and unsellable products or production rejects. Examples of Nike Grind materials include rubber, foam, and fiber. The goal of this initiative is to reduce waste, promote sustainable fashion, and close the lifecycle loop of Nike products.
• Reuse-A-Shoe Program: The company has launched the Reuse-A-Shoe Program to develop its capabilities of collecting and recycling old and worn-out footwear products. This program involves placing dedicated bins in strategic locations, operating larger drop-off locations, and operating dedicated recycling facilities. It supports specific programs like the Better World program and the Nike Grind initiative.
• Move To Zero Strategy: Nike also has a specific strategy within its greater CSR strategy that aims to drive the company toward zero carbon emission and zero waste production. The entire strategy develops, implements, and evaluates all related decisions, initiatives, and programs aimed at making the company carbon-neutral and waste-neutral. The strategy aspires to achieve these goals by 2020.
Purpose of the CSR Strategy
The entire CSR strategy of Nike has demonstrated a multi-faceted approach to adhering to the socioeconomic model of corporate social responsibility. Remember that the company believes that its responsibility does not rest alone in promoting and protecting the welfare of people working to produce its products. It believes that it has a greater role in promoting and protecting the interest of all of its relevant stakeholders.
It would appear that the company is dedicated to its CSR but it is also important to underscore the fact that its CSR strategy has brought forth numerous benefits that add to its strengths and competitive advantage. For starters, through its various CSR programs and initiatives, the company reinforces a positive corporate image and enhance further its brand reputation that helps attract like-minded investors and customers.
Furthermore, in considering its efforts to promote diversity and inclusivity in its workforce, Nike has expanded its access to the global labor market and has managed to attract and retain top talents across the world. It also reduces the risks that come from possible legal consequences, public backlashes, and business operation disruptions due to unfair labor practices within its organization and across the workplaces of its suppliers.
The CSR strategy of Nike has also complemented its product strategy and overall marketing mix. Its attempt to integrate the principles of sustainable fashion within its supply chain strategy and production processes has brought forth innovative ways of developing and producing its products. Relevant initiatives aimed at promoting sustainable fashion have helped in controlling further its supply chain and creating product differentiation.
Nevertheless, based on the aforementioned, the company provides a leading example of how a business organization can create a win-win situation through a well-designed and properly executed corporate social responsibility strategy. Its specific CSR programs and initiatives have produced positive outcomes that have benefitted its stakeholders and its entire value chain. Its CSR strategy demonstrates that a business can do good by doing good.