EMPTY STATE
COMPARISON TOOL

Nike 63/100

(NYSE:NKE) 9 of 43 (2018)

Nike Inc. (Nike), the world's third-largest apparel company and the largest athletic retailer, ranks ninth out of 43 companies, disclosing more information on its forced labor policies and practices than its peers across all themes. Compared to 2016, the company improved its rank from tenth to ninth. Since 2016, the company has improved its performance and disclosure by updating the forced labor provisions of its supplier standards, providing translations of the standards, and communicating the updates to its first- and second-tier suppliers. The company further disclosed its second-tier supplier list, audited some second-tier suppliers, instituted a process to assess forced labor risks, and engaged with local stakeholders in Turkey and Malaysia on migrant workers and with the Mexican government on freedom of association. Additional steps the company could take to address forced labor risks in its supply chains include strengthening its disclosure and practices on the themes of Traceability & Risk Assessment, Recruitment, and Worker Voice.

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63 /100

2018 Ranking: 9 of 43

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49

Nike was evaluated both in 2016, when it ranked 10th out of 20 companies, and in 2018, when it ranked ninth out of 43 companies. The company improved by 14 points to score 63/100. Since 2016, the company has improved its performance and disclosure by updating the forced labor provisions of its supplier standards, providing translations of the standards, communicating the updates to its first- and second-tier suppliers, disclosing its second-tier supplier list, auditing some second-tier suppliers, instituting a process to assess forced labor risks, and engaging on issues related to migrant workers and freedom of association.

2016 BENCHMARK

63

The average score for the sector was 37/100 compared to 49/100 in 2016. The number of companies assessed in 2018 increased from 20 to 43. Since 2016, the methodology has been strengthened, making it more difficult for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 49/100 to 56/100, which is significant given the changes to the methodology.

METHODOLOGY

2016

49

Nike was evaluated both in 2016, when it ranked 10th out of 20 companies, and in 2018, when it ranked ninth out of 43 companies. The company improved by 14 points to score 63/100. Since 2016, the company has improved its performance and disclosure by updating the forced labor provisions of its supplier standards, providing translations of the standards, communicating the updates to its first- and second-tier suppliers, disclosing its second-tier supplier list, auditing some second-tier suppliers, instituting a process to assess forced labor risks, and engaging on issues related to migrant workers and freedom of association.

2016BENCHMARK

2018

63

The average score for the sector was 37/100 compared to 49/100 in 2016. The number of companies assessed in 2018 increased from 20 to 43. Since 2016, the methodology has been strengthened, making it more difficult for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 49/100 to 56/100, which is significant given the changes to the methodology.

METHODOLOGY

THEME AND INDICATOR SCORE

The benchmark methodology has seven themes, selected to capture the key areas where companies need to take action to eradicate forced labor from their supply chains. There are a total of 23 indicators across the seven themes. For each theme, a company can score a total of 100 points.

Commitment and Governance

This theme evaluates a company's commitment to addressing forced labor, whether it discloses supply chain standards, and to what extent it has management processes and board oversight, training programs, and engagement with stakeholders on forced labor in place.

OVERALL 85
INDICATORS
Commitment
100
Supply Chain Standards
100
Management and Accountability
75
Training
75
Stakeholder Engagement
75

Traceability and Risk Assessment

This theme measures the extent to which a company demonstrates an understanding of its suppliers and their workforce by disclosing relevant information (such as supplier names or sourcing countries) and assesses and discloses forced labor risks across its supply chains.

OVERALL 50
Traceability
75
Risk Assessment
25

Purchasing Practices

This theme assesses to what extent a company adopts responsible purchasing practices (such as providing price premiums and procurement incentives) and integrates supply chain standards into supplier selection and supplier contracts, and whether it cascades them down the supply chain.

OVERALL 69
Purchasing Practices
75
Supplier Selection
50
Integration into Supplier Contracts
50
Cascading Standards through the Supply Chain
100

Recruitment

This theme measures a company's approach to reducing the risk of exploitation of supply chain workers by recruitment agencies, eliminating workers' payment of fees during recruitment processes throughout its supply chains, and protecting the rights of migrant workers.

OVERALL 34
Recruitment Approach
0
Recruitment Fees
50
Monitoring and Ethical Recruitment
25
Migrant Worker Rights
62.5

Worker Voice

This theme measures the extent to which a company engages with workers in its supply chains, enables freedom of association, and ensures access to effective and trusted grievance mechanisms.

OVERALL 57
INDICATORS
Communication of Policies
100
Worker Voice
37.5
Freedom of Association
50
Grievance Mechanism
40

Monitoring

This theme evaluates a company's process for auditing suppliers, including whether audits include non-scheduled visits, review relevant documents such as wage slips or contracts, interview workers, and audit lower-tier suppliers and provide disclosure on the outcomes of supplier audits.

OVERALL 70
Auditing Process
90
Audit Disclosure
50

Remedy

This theme measures the extent to which a company has corrective action plans and processes for non-compliant suppliers and ensures remedy is provided to workers in its supply chains who are victims of forced labor. Publicly available allegations of forced labor in a company's supply chains that occurred in the past three years, and how a company has responded to and addressed those allegations, are also assessed as part of this theme.

OVERALL 75
Corrective Action Plans
100
Remedy Programs and Response to Allegations
50

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