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Responding department: Sustainable Business & Innovation

Stock Exchange Symbol: (NKE:US)

Does your company have a publicly available commitment to respect human rights?

Yes, NIKE is a signatory of the United Nations Global Compact. The first two principles are related to human rights. Principle 1 states, “Businesses should support and respect the protection of internationally proclaimed human rights” and Principle 2 states, “make sure that they are not complicit in human rights abuses.” In NIKE’s FY12/13 Sustainable Business Performance Summary, President & CEO Mark Parker confirmed that NIKE continues to “to work with global influencers, including the United Nations Global Compact, in support of global principles in the areas of human rights,labor, the environment and anti-corruption.” Additionally, NIKE, Inc. has a supplier Code of Conduct and Code Leadership Standards. The NIKE, Inc. Code of Conduct clarifies and elevates the expectations we have of our contract factory suppliers and lays out the minimum standards we expect each contract factory to meet. It is our intention to use these standards as an integral component to how we approach NIKE, Inc. sourcing strategies, how we evaluate factory performance, and how we determine with which factories NIKE will continue to engage and grow our business. As we evolve our business model in sourcing and manufacturing, we intend to work with factories who understand that meeting these minimum standards is a critical baseline from which manufacturing leadership, continuous improvement and self-governance must evolve. Beyond the Code of Conduct and Code Leadership Standards, NIKE is committed to collaborating with our contract factories to help build a leaner, greener, more empowered and equitable supply chain. And we will continue to engage with civil society, governments, and the private sector to affect systemic change to labor and environmental conditions in countries where we operate. We expect the factories we contract with to share Nike’s commitment to the goals of reducing waste, using resources responsibly, supporting workers’ rights, and advancing the welfare of workers and communities. We believe that partnerships based on transparency, collaboration and mutual respect are integral to making this happen.

Code of Conduct: [link]

Code Leadership Standards: [link]

FY12/13 CR Report: [link]

Code of Ethics: [link]

How are human rights governed in your company?

The primary responsibility and oversight for human rights is held by the NIKE, Inc. Corporate Responsibility & Sustainability Committee of the Board of Directors. NIKE reports on its governance process in our corporate responsibility reporting, Code of Conduct and Code Leadership Standards.

How are human rights managed within your company?

Human rights impacts are defined and addressed by NIKE, Inc.’s Sustainable Manufacturing and Sourcing teams. Issues are identified by local and regional sourcing managers, and from issues arising from audits of factories. Upon identification of actual or potential issues, NIKE management works closely with various contacts as appropriate,including factory ownership and management, workers’ representation, NGOs and government. Sourcing staff receive training on issues contained within the Code of Conduct. NIKE-contracted factories undergo regular audits.

What is the company’s approach to the engagement of stakeholders (including workers, and local communities impacted by the company’s activities), on human rights issues?

At Nike, we believe in the importance of engaging with and listening to multiple stakeholders. They help us prioritize key issues and develop our corporate responsibility policies and approaches. We see stakeholder engagement as a key enabler of both risk mitigation and innovation. NIKE engages with a broad range of stakeholders on an on-going basis, including individuals in civil society organizations, industry and government, as well as consumers and shareholders. We do this informally, through participation and/or membership in networks and organizations and as a structured part of our outreach strategies related to issues and challenges. We also do this through collaboration and stakeholder engagement activities, which are covered throughout NIKE, Inc.’s FY12/13 Sustainable Business Performance Summary. Additional details can be found at www.nikeresponsibility.com. We believe factories that successfully address the well-being of their workers by engaging with them directly to understand their needs will improve factory performance. We also believe that factories need strong human resource management (HRM) programs to increase understanding among factory workers and management. Contract factories that do both of these things – address worker needs by listening and have a strong HRM program – will improve their business and our products.

Priority human rights issues: What are some of the priority human rights issues for your company?

  • Workplace diversity / non-discrimination
  • Forced labour and human trafficking (including in supply chains)
  • Women
  • Racial and ethnic minorities
  • Children (including child labour)
  • Migrant workers

Actions on 'other' issues

As one example of our work in this field, NIKE, Inc., supports the work of the Nike Foundation to support girls. In collaboration with partners, and informed by insights from thousands of hours of research about the impacts of girls living in extreme poverty around the world, the Foundation supports the Girl Effect which leverages the unique potential of adolescent girls and provides them with resources to end poverty for themselves, their families, their communities, their countries and the world. During FY12 and FY13, the NIKE Foundation continued to catalyze partners to unleash the Girl Effect. Highlights included:

• A high-profile launch of Smarter Economics: Investing in Girls at the annual meetings of the World Bank and International Monetary Fund in 2012; this report makes the economic case for investing in adolescent girls

• The launch of the Ni Nyampinga brand radio show and magazine in Rwanda to connect girls and inspire them to reach their full potential

• The opening of Girl Hub Ethiopia (as part of the Girl Hub collaboration with the UK Department for International Development) and the launch of the Yegna-brand radio drama and girl band to connect, inform and inspire girls across Ethiopia

• Ensuring girls were included in commitments made at the London Family Planning Summit in 2012, where over $4 billion was pledged to tackle the unmet family planning needs of 120 million girls and women by 2020

• Celebrating the first-ever UN International Day of the Girl in October 2012, sharing messaging in advance to inform advocacy and providing a digital platform for the girl community to get its messages out

• Preparation of a Girl Declaration, inspired and informed by girls to rally, consolidate and focus the girl movement globally, with a specific objective to embed girls in the next set of global development goals that will determine how approximately $2 trillion of international aid will be invested over 15 years starting in 2016

 • A new Girl Effect website (girleffect.org) designed and created so that all its content (articles, videos, case studies, fact sheets and more) can be easily used to amplify the Girl Effect

For more examples of our work in this space, please view the FY12/13 Sustainable Business Performance Summary: [link]

How are human rights commitments and information about how the company addresses its human rights impacts communicated, internally and externally?

NIKE, Inc. communicates human rights commitments and information through corporate responsibility reporting. NIKE’s most recent Sustainable Business Performance Summary report was published May 2014; please see link to the PDF report & reporting platform below:  [link] www.nikeresponsibility.com

What provisions does your company have in place to ensure that grievances from workers and affected communities or individuals are heard, and can you provide examples of remedies provided?

One worker protection expectation of NIKE, Inc. is that contract factories establish grievance systems. At the end of FY13, 82% of contract factories had such systems in place and were in compliance with NIKE standards. Of those in compliance, 70% of contract factories reported use of their systems, which is comparable to the rate in FY12. We recognize that having and using systems alone is not enough to secure workers’ capability to communicate with factory management. We continue to include training and approaches to raising worker voices as part of the lean manufacturing approach we encourage contract factories to take. NIKE’s Code Leadership Standards outline NIKE’s policy on establishing effective grievance processes in contract factories. The Code outlines that the contractor shall establish an effective grievance process that enables employees to address their concerns regarding working conditions and terms and conditions of employment. The specific grievance process will vary from factory to factory depending upon its size, local laws, culture, etc. But in general, an effective grievance process includes: a. A written grievance policy and implementing procedures. The policy should include, i. Multiple channels for employees to raise concerns and provide input to management. For example: grievance/suggestion boxes; supervisors/team leaders; HR department/counselors; trade union/worker representatives; “open door” policy; company “hotlines”; third-parties, worker committees, meetings between management and worker’s representatives, etc.; and ii. The ability to raise concerns confidentially (or anonymously), subject to the requirements of country law, if the employee so desires without fear of retaliation. b. Effective communication of the grievance policy to employees so that employees are aware of the grievance process and their right to raise concerns. c. Training of staff responsible for responding to grievances regarding the policy and their roles and responsibilities; and d. A means to document and track grievances to ensure there is a timely response back to the employee. The contractor is also encouraged, as part of good practices, to:

• Identify and develop plans to respond to broader/systemic issues raised by employees through the grievance process;

• Involve worker representatives and employee participation in the resolution of grievances, where appropriate;

• Provide a process for appeal (especially in cases of discipline or termination);

and FY12/13 Sustainable Business Performance Summary: [link]

Post details of worker representatives prominently in the workplace. NIKE, Inc. Code Leadership Standards: [link]

Which external and collaborative human rights initiatives does your company participate in, and what is the nature of your involvement?

NIKE participates in the following organizations:

  • Fair Labor Association
  • UN Global Compact
  • International Labor Organization
  • Freedom of Association (FoA) Protocol in Indonesia NIKE, Inc. FY12/13 Sustainable Business

Performance Summary: [link]

Which are the key one, two or three elements of your approach to human rights that been developed or amended since June 2011? Please indicate if these actions were in response to the UN Guiding Principles.

We believe that a valued contract factory workforce means better business for the factories and for NIKE, and better well-being for individual workers. Factories that value their workers – investing in their skill building, listening to their ideas on how to improve factory processes, communicating about issues that matter to them, facilitating aspects of their lives that help them show up every day at the factory healthy and on time – can build a skilled, productive and engaged workforce. As part of this approach, we designed two pilot programs in Indonesia and learned that to enable engagement of the contract factory workforce, we needed contract factories to first stabilize production lines. Within these pilots we worked with factories to improve data quality, and to study and assess absenteeism, worker engagement and well-being, factory management and supervisor skills. Each of these areas has shown to contribute to worker well-being and to individual and factory productivity. Though early, initial results of well-being surveys in both footwear and apparel pilot factories show that production pilot lines addressing these areas outperform the control lines on both measures of production efficiency and worker engagement. NIKE, Inc. FY12/13 Sustainable Business Performance Summary (pg. 39): [link]

What are some of the obstacles and challenges that your company encounters in implementing its human rights commitments?

At NIKE, we believe one of our responsibilities, as a global company is to play a role in bringing about positive, systemic change for workers within our supply chain and in the industry. We've run the course – from establishing a Code of Conduct that covers worker protections as well as environmental impacts, to pulling together an internal team to enforce it, to releasing our contract factory Audit Tools and working with external bodies to monitor factories and work with stakeholders. Our focus now is on getting to the root of the problems, evaluating our supplier and manufacturing relationships, and continuous improvement. We believe that placing the worker at the heart of the workplace and having contract factory management that respects and invests in its workforce will result in lasting positive results for workers, the factory and NIKE, Inc. We believe that collaboration with other companies and other sectors of society is the best way to achieve systemic change in global supply chains. It is an essential element of our approach and complements our direct engagement with contract factories in our own supply chain. Challenges of a global business include different approaches, standards and political and social realities of various countries and jurisdictions that may not have consistent levels of oversight or enforcement of human rights protections.