Nike is an American-based multinational entity that specializes in designing, development, and production of sportswear and apparels. The company has a massive influence in the contemporary sports accessories industry[1]. Despite the intense market competition from other established companies such as Puma and Adidas, Nike has sustained its market dominance and competitive edge through various innovative programs. However, the company has faced credible criticism on its limited involvement in various community programs and environmental sustainability. Nike’s CSR (Corporate Social Responsibility) strategy promotes its sustainable market operations and consistent production of quality products[2]. The company’s CSR structure emphasizes on the development of unique relationships with important stakeholders such as consumer bases. Through such comprehensive structures and plans, Nike can support strict implementation of programs that will create positive impacts on the targeted shareholders[3]. Notably, Nike, like any viable entity, has a social contract with consumers to practice selflessness and humanity in the desires to expand presence and influence in the competitive industry through its community development and environmental programs.
Nike’s CSR Strategy towards Community Development
The primary objective of the introduction and execution of Nike’s new approach to CSR is to seek opportunities and strategies that are beneficial to the athletes, surrounding communities, and employees. The organization has been successful in creating sustained value chains for communities[4]. Most of the CSR programs targeting community development plans address physical activity concerns, strengthening women’s positions in the societies, and supporting other vital local initiatives. Essentially, increased engagement in community programs will have positive impacts on Nike’s long-term operations[5]. Nike’s commitment towards creating social changes through support to community development programs is indisputable[6]. The company is sustaining its community investment plans to sustain its positive relationships with consumers.
The company participates in numerous community development programs. Nike aim to encourage human potentials through its various innovative partnerships and advocacy with various community groups and local businesses. The company’s official policy is to direct approximately 1.5% of its pre-tax income in supporting community programs[7]. For example, Nike is building and expanding its access to global sport agendas. In particular, the organization is collaborating with various entities from diverse cultural backgrounds in the creation of unique frameworks for promoting positive experiences for children engaged in sports-related activities. For instance, Nike’s “Designed to Move” initiative is offering financial and material support to children in sports through physical education programs and facilitating active on-field play. Through the initiative, Nike is raising awareness on the negative consequences of physical inactivity[8]. Consequently, the company is collaborating with schools and organizations to encourage kids and employees to move before, during, and after school and work respectively. Alternatively, Nike is empowering its employees with the “Designed to Move” to raise their respective levels of physical activity especially in their workplaces.
Nike’s “Girl Effect” campaign offers crucial insights, innovative perceptions, and inspirations to adolescent girls particularly from the developing world. Through the program, Nike aim to change poplar perceptions on the role of women in the male-dominated societies. The company supports the training and education of the girls through the Nike Foundation among other charitable contributions[9]. For instance, Nike supported the launch of the “Ni Nyampinga” brand radio program and magazine in the East African country of Rwanda to encourage and inspire girls to pursue and achieve their potentials. In addition, the establishment of a Girl Hub in Ethiopia by Nike was to inspire and connect girls across the region. Additionally, Nike is supporting family planning plans targeting women from poor societies.
Nike’s contributions towards the management of disasters are remarkable[10]. For instance, the company donated over $3 million to rebuild parts of New York and New Jersey, which were destroyed by the 2012 super storm. In particular, Nike participated in the distribution of essential supplies to affected communities and rebuilt over 150 homes for the victims among other important humanitarian help. Additionally, after, the 2013 tornados in Oklahoma, Nike participated in the reconstruction of playgrounds and contributed towards the N7 program to support the Native American tribal communities. The last community development CSR is the consistent production of innovative brands to its loyal consumer bases. The company’s consistency in its innovative approaches is a crucial element in its overall market survival and profitability.
Nike’s CSR Strategy towards the Environment
Nike believes that climate change is a critical issue that is affecting different facets of humans’ daily survival. Subsequently, the company’s primary objective is to reduce its energy use to limit the emission of the dangerous greenhouse gases in its value chain[11]. Nike’s CSR approach to towards the environment involves the development of relevant strategies to support the reduction of carbon footprint[12]. The company is supporting the innovative production of products and the development of new palettes of sustainable fabrics. In addition, Nike is encouraging the use of recycled polyester emanating from plastic bottles to support the production of highly effective and efficient commodities[13]. The company bases its approach towards green production to the positive customers’ feedback on the efficacy of its products. Moreover, Nike is investing in the use of renewable energy sources in its production processes. Increased investment in the reduction of global carbon emission will limit the impacts of Nike’s production processes on the environment[14]. The introduction of technological applications such as the Pegasus and Flyknit is helping Nike to sustain market efficiency and controlling excessive emission of carbon elements. Notably, such low impact products can also help in boosting the performances of the users. Furthermore, Nike is encouraging the recycling or reuse of wastes to enhance its value chain and maintain the manufacture of high-performance products.
Despite the numerous positive commitments towards the environment and related social performances, some critics argue that Nike lacks proactive approaches towards the environment. Nike’s unethical manufacturing processes have massive impacts on the environment. The company is not committed towards its efforts to eliminate hazardous chemicals from supply chains. The firm is limiting its use of eco-friendly materials such as organic and recycled cotton and polyester. Besides, the company is still experiencing numerous waste and water reduction problems. While the public commitment and declaration to reduce carbon emissions is a positive milestone, Nike must improve its overall involvement in environmental protection[15]. The firm is also receiving numerous criticisms from organizations such as Greenpeace for its use of hazardous chemicals. The increased concerns among environmental protection lobby groups towards the pollution of waterways are a serious issue that Nike must strive to address promptly[16].The inadequate organizational commitment towards the elimination of hazardous chemicals is exposing Nike’s employees to dangerous levels of concentration.
The company is comparatively slow in working towards reducing the impacts of industrial wastes across its value chain on the environment. The reduction in waste, particularly during the production processes, is only possible through various recycling initiatives. Notably, Nike does not have developed processes and capacity to absorb recycling processes in its systems. In particular, the company’s limited financing of green energy initiatives is slowing its adoption of the global environmental conservation strategies. While the use of green packaging can contribute towards Nike’s environmental sustainability efforts, the company is yet to attain meaningful milestones in this particular area. Consequently, Nike should aim to design its products to limit the creation of unnecessary wastages especially during the production processes. The company is progressively introducing technological frameworks that can support the production of lightweight upper layer. The technology will contribute towards the reduction of related footwear wastes in its production chain.
While Nike is a signatory of the Fashion Industry Charter for Climate Action, their respective contributions towards environmental conservation are not proportionate to related requirements. Under such commitments, Nike was responsible for adhering to strict frameworks and conventions on climate change[17]. For instance, Nike’s decision to record a 30% reduction in dangerous greenhouse gas emissions by 2030 was indeed a positive course. Nevertheless, attaining net-zero emissions is inherently a challenging endeavor in the industry. In essence, Nike is struggling to collaborate with other important players in the industry to attain the environmental conservation efforts. The company’s partnership with the United Nations Climate Change body confirms Nike’s commitment towards environmental sustainability[18]. However, Nike is yet to show serious commitments towards sustainable development of renewable energy sources. On a positive note, Nike is introducing better and sustainable products.
The company is progressively moving towards 100% adoption of lower-carbon materials in its production processes. The incorporation of energy-intensive processes such as dyeing towards the improvement of Nike’s value chain and capabilities is yet to have meaningful impacts. Additionally, while Nike’s Energy and Carbon Program targets a reduction in energy use and related emission by approximately 55%, inadequate funding towards the implementation of the initiative is slowing down related processes. Markedly, such initiatives, if successful, imply that Nike will save more energy in the manufacturing of its finished commodities[19]. Nike is in the process of installing solar PV systems on its company rooftops to reduce its consumption of electricity in the production processes. The company should follow through such programs as part of its CSR and value chain programs[20]. Accordingly, Nike is constantly becoming a strong advocate of responsibly sourced biomass fuel (from waste and trash) to further enhance its production processes.
Nike is showing commitment towards fulfilling its social contract with consumers to practice selflessness and humanity. The company’s involvement in various community development and environmental programs is strengthening its competitive edge.Nike is showing strong commitment towards improving the quality of life for its employees and surrounding communities. In addition, the company is employing effective measures to reduce its environmental footprints through increased investment in sustainable production processes. Arguably, Nike’s efforts towards environmental protection are not good enough. The company must incorporate serious changes in its operation to improve its transparency towards the identified environmental concerns and practices among other related issues. With a massive revenue potential, Nike can implement most of the desirable environmental measures.
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[1]Nike Inc. “Sustainable Business Performance Summary” (2014): 1. Retrieved from https://s3-us-west-2.amazonaws.com/ungc-production/attachments/81781/original/FY12-13_NIKE_Inc_CR_Report.pdf?1400276890
[2] Ibid, 12
[3] Lara, Robertson. “How Ethical is Nike?” (2017). Retrieved from https://goodonyou.eco/how-ethical-is-nike/
[4]Crane, Andrew, Dirk Matten, and Laura Spence, eds. Corporate social responsibility: Readings and cases in a global context. Routledge, 2019.
[5] Mira, Valjakaa. “CSR and Company Reputation: Case study of Nike.” (2013). Retrieved from https://www.theseus.fi/bitstream/handle/10024/76536/Dissertation_Metropolia_Valjakka.pdf?sequence=1&isAllowed=y
[6] Ibid, 14
[7] Werther Jr, William B., and David Chandler. Strategic corporate social responsibility: Stakeholders in a global environment. Sage, 2010.
[8] Ibid, 23
[9] Luxmore, Stephen R., Clyde Eirikur Hull, and Zhi Tang. “Institutional Determinants of Environmental Corporate Social Responsibility: Are Multinational Entities Taking Advantage of Weak Environmental Enforcement in Lower‐Income Nations?.” Business and Society Review 123, no. 1 (2018): 151-179.
[10]Zick, Paul. “CSR infrastructure for communication and the Nike controversy.” J. Mgmt. & Sustainability 3 (2013): 63.
[11] Nike Inc, “Protecting Environment” (2018):1. Retrieved from https://purpose.nike.com/protecting-environment
[12] Epstein, Marc J., Adriana Rejc Buhovac, and Kristi Yuthas. “Why Nike kicks butt in sustainability.” Organizational dynamics 39, no. 4 (2010): 353.
[13] Ibid, 34
[14] Pedersen, Esben Rahbek Gjerdrum, and Wencke Gwozdz. “From resistance to opportunity-seeking: Strategic responses to institutional pressures for corporate social responsibility in the Nordic fashion industry.” Journal of business ethics 119, no. 2 (2014): 245-264.
[15] Walker, Matthew, and Milena M. Parent. “Toward an integrated framework of corporate social responsibility, responsiveness, and citizenship in sport.” Sport Management Review 13, no. 3 (2010): 198-213.
[16] Ibid, 37
[17]Valjakka, Mira. “CSR and Company Reputation-Case study of Nike.” (2013).
Soares, Erick Tavarès-Penate. “Closing the ‘CSR gap’through a successful CSR strategy: insights from Nike Inc.” PhD diss., 2016.
[18] Zhang, Feng. “Corporate social responsibility in emerging markets: The role of multinational corporations.” An Initial Paper for the Launch of the Foreign Policy Centre Project on “Corporate Responsibility in Emerging Markets” in association with Coca-Cola Great Britain (2008).
[19] Ibid, 21
[20] Amran, Azlan, Shiau Ping Lee, and S. Susela Devi. “The influence of governance structure and strategic corporate social responsibility toward sustainability reporting quality.” Business Strategy and the Environment 23, no. 4 (2014): 217-235.