BEAVERTON, United States — Nike is introducing new measures to improve workplace diversity as the company grapples with allegations of gender discrimination and inappropriate behaviour that led to the departure of nearly a dozen senior executives.
The American sportswear giant will funnel additional resources into programs designed to ensure leadership accountability and create hiring opportunities for women and minorities, Nike said in a draft of its latest sustainability report, which is due out Monday. The report outlines the Beaverton, Oregon-based company’s progress on environmental and cultural issues, including headway in reducing its carbon footprint. Monday’s report also offers new details about how Nike plans to address a workplace culture some employees have described as toxic in media reports.
“In early 2018, we became aware of reports of behaviour within our organisation that did not reflect our core values of inclusivity, respect, and empowerment,” Nike said. “We now recognise this is not only about culture and leadership, but also about institutional bias and practices that haven’t kept pace.”
Nike is requiring 10,000 managers worldwide to undergo mandatory diversity training and unconscious bias awareness training for all employees. A new diversity talent acquisition team will ensure there are diverse candidates for open positions. The company is creating a leadership training program to help employees enroll in business school and providing mentorship programs for women and minorities.
Nike will also continue to evaluate its promotion, pay and performance results to pinpoint how women and minorities are unfairly represented in the process. While the company declined to comment on how much money it will invest in the new diversity initiatives, chief sustainability officer Hannah Jones told BoF that it will be “significant” relative to previous budgeting.
“We’re taking it very seriously,” she said. “This is about a fundamental mindset shift and it comes from senior management.”
Only 29 percent of Nike vice presidents are women, while the company’s overall workforce is 48 percent female, the report found. Among directors, 39 percent are women and 23 percent are non-caucasian. Allegations of widespread harassment and discrimination emerged in early March, when an informal survey by female employees describing inappropriate behaviour by their male colleagues made its way to chief executive Mark Parker.
A New York Times investigation found that under brand president Trevor Edwards’ leadership, women said they were routinely denied promotions while male supervisors accused of misconduct failed to be apprehended by human resources.
Edwards resigned in March, before the Times story ran, as did his deputy, Jayme Martin. They were followed by nine other exits among senior management, including that of Antoine Andrews, head of diversity and inclusion. In his place, Nike hired Kellie Leonard, the former vice president of employee and corporate communications, who will help oversee the new initiatives, the company said.
The upheaval doesn’t appear to have affected Nike’s sales, and the company’s stock is up 3 percent since early March. But Nike risks alienating consumers if it isn’t more forthright about problems in its workplace culture, especially with the company facing growing competition from Adidas and others, said Lee Peterson, an executive vice president at retail consultancy WD Partners.
BoF explored the potential consequences to Nike’s bottom line following the latest slate of executive exits last week.
Nike’s sustainability report also detailed the company’s progress toward environmental targets set in 2015. Its footwear and apparel sectors have seen a 2.5 percent decrease in average carbon footprint per unit since fiscal 2015, and the company said it has signed power purchase agreements that will enable its goal of sourcing 100 percent renewable energy in North America by 2025. As of 2017, 22 percent of its energy use come from renewable sources.
Other notable achievements include improving manufacturing standards and reducing waste. Since creating a Sustainable Manufacturing and Sourcing Index in 2010, Nike nearly halved the number of factories with which it partners to eliminate sourcing that fails to comply with its labour rights standards. More than 90 percent of its nearly 600 factories today are compliant with Nike’s labour code, which include criteria such as ensuring that workers get at least one day off in seven, Jones said.
Nike historically has been considered one of the leaders in sustainability, according to Sarah Ditty, the head of policy at Fashion Revolution, an advocacy group that publishes the Fashion Transparency Index every year. In the 2018 report, Nike ranks as above average but behind Adidas, Reebok and Puma.
“Nike has a robust code of conduct and compliance for suppliers, and they were also among the first retailers to publish a list of their suppliers,” Ditty said. “But even among the leading brands, there is a lot more they could be doing.” For Nike, this means issuing more frequent reports that update the impact of its initiatives, she added.
The company sees its latest report as “an inflection point,” Jones said.
“With diversity and inclusion, a lot of companies are struggling with this right now,” she said. “If we can get this right, it will be a competitive advantage moving forward, because diversity and divergent thinking is what triggers innovation.”