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COMPARISON TOOL

Nike 49/100

(NYSE:NKE) 10 of 20 (2016)

Nike shows slightly above-average disclosure compared to its peers. Its score of 49/100 is driven by its disclosure in the areas of commitment, monitoring, traceability, and purchasing practices. Notably, Nike discloses a map of its first-tier suppliers which includes the percentage of migrants workers and has set sourcing targets for cotton and other key materials. To improve its performance, Nike is encouraged to implement internal as well as supplier training on forced labor, strengthen its recruitment practices, and put in place a remedy process for supply chain workers.

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49 /100

2016 Ranking: 10 of 20

HOW DO THEY COMPARE?

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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.

METHODOLOGY

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.

2018 BENCHMARK

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.

METHODOLOGY

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.

2018BENCHMARK

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 22 indicators across the seven themes. For each theme, a company can score a total of 100 points.

Commitment and Governance

The company's top-level commitments on forced labor, supply chain standards, management processes, training programs and stakeholder engagement

OVERALL 57
INDICATORS
Awareness and Commitment
100
Supply Chain Standards
60
Management and Accountability
50
Training
25
Stakeholder Engagement
50

Traceability and Risk Assessment

The extent to which the company traces its supply chain and conducts forced labor risk assessments, and discloses information about these processes.

OVERALL 50
Traceability
75
Risk Assessment
25

Purchasing Practices

The company's awareness and action on purchasing practices that can exacerbate forced labor risks, and its process for selecting suppliers, integrating standards into contracts and cascading them down the supply chain.

OVERALL 69
Purchasing Practices
25
Supplier Selection
100
Integration into Supplier Contracts
50
Cascading Standards through the Supply Chain
100

Recruitment

The company's approach to reducing exploitation by recruitment agencies and eliminating workers' payment of fees for their jobs.

OVERALL 33
Recruitment Approach
50
Recruitment Fees
50
Recruitment Audits
0

Worker Voice

The extent to which the company proactively communicates with workers through the supply chain, enables freedom of association and ensures access to effective and trusted grievance mechanisms.

OVERALL 41
INDICATORS
Communication of Policies
25
Worker Voice
50
Worker Empowerment
50
Grievance Mechanism
40

Monitoring

The company's process for auditing (including whether it includes non-scheduled visits, document review, worker interviews) and disclosure about the audit process and findings.

OVERALL 55
Auditing Process
50
Audit Disclosure
60

Remedy

The extent to which the company has corrective action plans for non-compliant factories, as well as processes for remedying workers who are victims of forced labor, and reports on remedies provided.

OVERALL 38
Corrective Action Plans
75
Remedy Programs
0

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