Tulipshare, which owns 276 NIKE shares, aims to help investors push for environmental and social commitments and has asked Nike for information on the methodology and metrics used to track forced labour and wage theft risks by way of a shareholder proposal.
The shareholder proposal also calls on Nike to consider implementing model supplier contracts developed by the American Bar Association and to assess whether its findings lead to changes in the company’s policies or decision-making.
“We are asking Nike to implement these clauses into all of its supply chain contracts, which will not only make human rights policies into “operational commitments” but also continue to allow Nike to be leaders in supply chain innovation moving forward.
“We are also asking them to disclose data on their Tier 2 and Tier 3 supply chains, which they do not currently provide,” Tulipshare said on its website detailing the shareholder proposal, adding that incorporating these clauses would require the buyer and supplier to cooperate in protecting human rights and make both parties responsible for the contract’s human rights performance.
Last month Tulipshare published an open letter to Nike in which it expressed “grave concern” at Nike’s “unresponsiveness” with regard to questions around eradicating forced labour in its business operations and throughout its value chains, and to embrace its corporate responsibility to respect human rights by adopting the UN Guiding Principles on Business and Human Rights.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
Later Nike published its FY22 Impact Report in which it said it is working with several organisations to clamp down on forced labour in supply chains.
In an email to Just Style, Antoine Argouges, CEO of Tulipshare commented: “Nike’s impact report includes continued support for the UN Global Compact. However, Nike’s communication on progress only meets six of 17 Sustainable Development Goals. Nike has not disclosed adequate analysis regarding the efficacy of traceability steps taken to address the risks of alleged Uyghur forced labour across its supply chain tiers, nor does Nike disclose engagement with affected rights holders or whether remedies are satisfactory to victims; KnowTheChain identified Nike policies in need of improvement: purchasing practices, worker voice, and remedy.
He further added: “In 2022, the EU adopted a directive on corporate sustainability due diligence in global value chains, requiring companies like Nike to identify, prevent, end or mitigate adverse impacts on human rights. This directive sets obligations, penalties and liability for large companies, with respect to their own operations, subsidiaries, and business partners.
“In 2023, garment-worker unions and labour-rights groups filed a complaint alleging Nike’s treatment of workers and unpaid wages violated OECD guidelines. Nike allegedly owes an estimated $1.4 million in unpaid wages to Cambodian garment workers, with Nike’s overall wage theft from workers alleged at $28m.
“One possible approach for Nike to fulfil its responsibility to avoid causing or contributing to adverse human rights impacts in its supply chain is deployment of the ABA’s Model Contract Clauses. The contract clauses are aimed at ensuring responsible purchasing practices, such as reasonable assistance to suppliers, responsible exit, and victim remedies.
“With our proposal now headed to the AGM, we call upon all investors to band together, use their collective shareholder powers and encourage Nike to adopt stronger environmental and social commitments, ensuring that one of the most beloved companies in the world is being responsibly managed with leadership accounting for all material risks and opportunities.”
Nike did not return a request for comment when approached by Just Style.