1. Nike Inc. Social Responsibility Rich Eggett, Josh Ford, Andy Taylor, Dennis Wright

2. Nike Exposed 1995: Critics say that Nike is using sweatshops to produce shoes 1995: Critics say that Nike is using sweatshops to produce shoes 1997: Contract with Ernst & Young to conduct an independent audit of Labor 1997: Contract with Ernst & Young to conduct an independent audit of Labor Findings leaked by disgruntled Nike Employee Findings leaked by disgruntled Nike Employee 1997: Plant near Ho Chi Minh City, Vietnam 1997: Plant near Ho Chi Minh City, Vietnam Carcinogens exceeded by 177 times the legal amount Carcinogens exceeded by 177 times the legal amount Workers are paid $10.00 for 65 hours of work Workers are paid $10.00 for 65 hours of work 77% have respiratory problems 77% have respiratory problems

3. Nike’s Response Press Release Press Release Labor Comments Labor Comments Fair Labor Association Fair Labor Association

4. Phil Knight’s 1998 Promises All Nike shoe factories will meet the U.S. Occupational Safety and Health Administration’s (OSHA) standards in indoor air quality. All Nike shoe factories will meet the U.S. Occupational Safety and Health Administration’s (OSHA) standards in indoor air quality. The minimum age for Nike factory workers will be raised to 18 for footwear factories and 16 for apparel factories. The minimum age for Nike factory workers will be raised to 18 for footwear factories and 16 for apparel factories. Nike will include non-government organizations in its factory monitoring, with summaries of that monitoring released to the public. Nike will include non-government organizations in its factory monitoring, with summaries of that monitoring released to the public.

5. Promises continued Nike will expand its worker education program, making free high school equivalency courses available to all workers in Nike footwear factories. Nike will expand its worker education program, making free high school equivalency courses available to all workers in Nike footwear factories. Nike will expand its micro-enterprise loan program to benefit four thousand families in Vietnam, Indonesia, Pakistan, and Thailand. Nike will expand its micro-enterprise loan program to benefit four thousand families in Vietnam, Indonesia, Pakistan, and Thailand. Funding university research and open forums on responsible business practices, including programs at four universities in the 1998–99 academic year. Funding university research and open forums on responsible business practices, including programs at four universities in the 1998–99 academic year.

6. Fair Labor Organization Entity composed of the following: Entity composed of the following: Corporations: Nike, Reebok, Edie Bauer, etc. Corporations: Nike, Reebok, Edie Bauer, etc. Human Rights Organizations Human Rights Organizations Universities Universities Conducts Audits at Factories Conducts Audits at Factories Each plant every 10 years Each plant every 10 years Mediator when needed (Labor dispute) Mediator when needed (Labor dispute)

7. Nike Response to Wage “They pay Michael Jordan $40 million to endorse them. Can't they find more money to pay the workers?' The short answer is no. corporations pay the going rate for labor wherever they are. And Nike maintains that the rate is good.” TIME Magazine, March 30, 1998

8. Our Assessment - Labor Nike was caught red-handed Nike was caught red-handed Is Nike responsible for suppliers? Is Nike responsible for suppliers? Are we? Are we? Nike has good ideas about what to do Nike has good ideas about what to do The scope of what needs to be done to appease activist Americans is too large for Nike The scope of what needs to be done to appease activist Americans is too large for Nike Nike is doing a good job given their resources Nike is doing a good job given their resources

9. Supplier Relationships Governed by Nike Code of Conduct Governed by Nike Code of Conduct “Nike is committed to providing safe and healthy work environments and to being an environmentally responsible corporate citizen. The Nike standard is to comply with all environmental, safety and health laws and regulations.” “Nike is committed to providing safe and healthy work environments and to being an environmentally responsible corporate citizen. The Nike standard is to comply with all environmental, safety and health laws and regulations.”

10. Supplier Relationships cont… “…suppliers are expected to observe the same standards of conduct as Nike employees when conducting business with or for Nike.” “…suppliers are expected to observe the same standards of conduct as Nike employees when conducting business with or for Nike.” “Nike is committed to socially responsible sourcing practices. We are driven to do not only what is required by law, but also what is expected of a leader. We expect our business partners to do the same.” “Nike is committed to socially responsible sourcing practices. We are driven to do not only what is required by law, but also what is expected of a leader. We expect our business partners to do the same.”

11. Supplier Relationships cont… “As a member of the Nike team, when presented the opportunity, you have a responsibility to promote compliance with the Nike Code of Conduct and to report any instances of non-compliance, of which you become aware, to the Corporate Responsibility Compliance Group.” “As a member of the Nike team, when presented the opportunity, you have a responsibility to promote compliance with the Nike Code of Conduct and to report any instances of non-compliance, of which you become aware, to the Corporate Responsibility Compliance Group.”

12. Supplier Relationships -- Assessment Nike has demonstrated its willingness to drop suppliers and/or work with suppliers to correct any violations of the Code. Nike has demonstrated its willingness to drop suppliers and/or work with suppliers to correct any violations of the Code. Nike’s relationships with its suppliers are in general consistent with the principles established in the Code of Conduct. Nike’s relationships with its suppliers are in general consistent with the principles established in the Code of Conduct.

13. Current Community Programs 3% of pretax profits invested 3% of pretax profits invested Support Employees (Habitat for Humanity) Support Employees (Habitat for Humanity) Support activities for young people to keep them moving Support activities for young people to keep them moving Nike makes a profit while kids exercise Nike makes a profit while kids exercise Support girls and women Support girls and women 5000 micro loans per year in 3 rd world countries 5000 micro loans per year in 3 rd world countries Support girl’s athletics in Kenyan refugee camp Support girl’s athletics in Kenyan refugee camp

14. Our Assessment - Community Nike is committed to CSR Nike is committed to CSR Nike’s programs for youth are good Nike’s programs for youth are good Nike’s Microloans are good Nike’s Microloans are good Why women only? Why women only? Nike’s commitment to girl’s education is show Nike’s commitment to girl’s education is show How does supporting refugee camp soccer help? (this is a long stretch) How does supporting refugee camp soccer help? (this is a long stretch)

19. Consumers Though market share declined in 2000, Nike has re-bounding nicely, regaining 42% market share in 2004 Though market share declined in 2000, Nike has re-bounding nicely, regaining 42% market share in 2004 US Market Share: Sporting Footwear Manufacturer 2000 20001999 1. Nike 39.20%48.90% 2. Adidas 15.10%16.90% 3. Reebok 10.90%10.90% 4. New Balance 4. New Balance 9.40%3.70% 5. K-Swiss 3.60%3.10% 6. Timberland 2.90%2.10% 7. Asics 2.10%1.50% 8. Saucony 1.40%1.40% 9. Skechers 1.40% 0.9% 10. And 1 1.20%0.90% - Adapted from WSJ Oct 2000 - Adapted from WSJ Oct 2000

20. Nike: Mission Statement “To bring inspiration and innovation to every athlete in the world.” “To bring inspiration and innovation to every athlete in the world.” If you have a body, then you are an athlete If you have a body, then you are an athlete Mission statement, Bill Bowerman Mission statement, Bill Bowerman

21. Growing Market Share Keys to Nike Success: Innovation and product differentiation. Keys to Nike Success: Innovation and product differentiation. Nike made a conscious decision to not only make the shoe, but also all items required to play. Nike made a conscious decision to not only make the shoe, but also all items required to play. The Ball, (Nike One Black Golf Ball) The Ball, (Nike One Black Golf Ball) The Stick, Clubs and Bats The Stick, Clubs and Bats Gloves, baseball, golf, hockey Gloves, baseball, golf, hockey Bags and Water Bottle Bags and Water Bottle Hats, Helmets, Faceguards Hats, Helmets, Faceguards Wristwatches and mile-counters, and heart monitors Wristwatches and mile-counters, and heart monitors Shirts, Shorts, Socks, and Jackets Shirts, Shorts, Socks, and Jackets

22. Environment: Eco-Friendly Nike aims Nike aims Reduce emissions from manufacturing (GHG) Reduce emissions from manufacturing (GHG) Reduce emissions as part of product distribution and delivery Reduce emissions as part of product distribution and delivery Displace materials with organic cotton in Nike shoes and apparel Displace materials with organic cotton in Nike shoes and apparel Independent Audit of Business Practices Independent Audit of Business Practices Partnering Group World Wildlife Federation (WWF) Business for Social Responsibility (BSR), with 12 additional companies Organic Trade Association (OTA) and Sustainable Cotton Project (SCP) Fair Labor Association (FLA)