Nike Shareholder Files Proposal Regarding Human Rights in Supply Chain

A Nike shareholder is asking the company to take stronger action to protect human rights for its garment workers.

Tulipshare, which currently owns 276 Nike shares, filed a shareholder proposal that asks Nike’s board to assess and rethink how its supply chain upholds the company’s committments to human rights.

The proposal requests a report from Nike that details if the company’s supply chain upholds these values — and asks Nike to use specific metrics to track perfomance on forced labor and wage theft. Tulipshare also asked Nike to consider using a model contract clause from the American Bar Association (ABA) that protects human rights for workers in the supply chain.

“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,” read an explanation of the proposal.

Tulipshare said that Nike acknowledged the receipt of the proposal, which was submitted on Thursday. FN has reached out to Nike for a comment.

According to Tulipshare CEO and founder, Antoine Argouges said Nike’s current reporting methods, including its annual Impact Report, do not adequately analyze how it addresses potentially using Uyghur forced labor in its supply chains.

The European Center for Constitutional and Human Rights (ECCHR) in 2021 filed a complaint in the Netherlands, alleging that Patagonia, Nike and two other brands may have benefited from forced labor among the Uyghur population in China’s Xinjiang province.

Nike has previously stated that it does not source products from the Xinjiang Uyghur Autonomous Region (XUAR) and said its Code of Conduct and Code Leadership Standards prohibit forced or indentured labor. Nike has said it has found no evidence of Uyghur or other ethnic minority from XUAR employment in its supply chain.

In its 2022 Impact Report, Nike said that 100% of facilities in its extended supply chain met its standards for foundational labor, health, safety and environment.

The proposal will be discussed at Nike’s next annual meeting, which will likely occur sometime in the fall.

“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,” said Argouges in a statement.

Nike previously faced similar pressure from another shareholder advocacy group As You Sow and consultancy Whistle Stop Capital with regard to the way it releases DEI progress. As a result, Nike has committed to release data pertaining to recruitment and promotion rates of its diverse employees — across gender, race, and ethnicity — by 2024.

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