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Governance Accountability And Reporting

Stakeholder Engagement and Report Reviews

Our stakeholders help us prioritize key issues and develop our corporate responsibility policies. We learn a great deal from our interactions. We find that constructive engagement with stakeholders is most often the approach that brings about the best insight to the challenges we all have an interest in addressing.

Why do we engage? We learned early on in our corporate responsibility journey the dangers of not engaging, not listening. Today, we see engagement with multiple stakeholders as a key enabler of both risk mitigation and innovation.

As a consequence, Nike engages with a broad range of stakeholders on an ongoing basis, including civil society, industry, government, consumers and shareholders. We do this informally, through networks and organizations that we participate in, or are members of, and as a structured part of our outreach strategies on issues and challenges. We also do this through our formal partnership work.

Each of our key partnerships is governed by agreements, contracts and/or operating principles, promoting the accountability and governance of each partnership. We have also worked to understand how multi-sector partnerships are best brokered, and how to make them succeed.

We believe that developing and refining skills of listening and sensing are critical to a company's success. This has been true for Nike's history of listening to and innovating for athletes to deliver performance product, and it is how we approach our corporate responsibility efforts. Recently we have begun to take engagement with the outside world to a new level.

Tapping social media and concepts such as "wikinomics" as defined by Don Tapscott, we have begun to leverage digital platforms and partnerships to enable and incorporate the wisdom of the crowds in a variety of areas, including our newly launched employee engagement WE Portal, the innovation platform GreenXchange, our Considered Index and our changemakers.org partnership with Ashoka, a global nongovernmental organization supporting social entrepreneurship. More information on these and other types of new engagement is included in relevant sections of our reporting.

Feedback on Reporting

NIKE, Inc. first held a formal multi-stakeholder forum in February 2004. We have continued that type of engagement through a number of meetings, some casually on specific topics, and some formal and facilitated.

One such meeting was held in December 2007, involving 13 participants from a range of nongovernmental organizations, government, academic, investor and business perspectives around Nike's energy and climate strategy. Participants met with Nike leadership to discuss themes including supply chain, public policy, disclosure and engaging consumers. They also encouraged the company to focus on target setting. Feedback from the session helped Nike establish long-term energy and climate targets.

We continued to formalize stakeholder feedback in 2007 as we brought together a range of interests to review and provide insight on our FY05/06 Corporate Responsibility Report. This committee was instrumental in providing feedback about the ambitious FY11 corporate responsibility business targets we set and have continued to manage against and report upon.

Stakeholder Review Panel

NIKE, Inc. engaged Business of Social Responsibility (BSR) to facilitate a stakeholder engagement process around its FY07-09 Corporate Responsibility Report (with performance data from May 31, 2007 through May 31, 2009) in order to enhance the credibility of its report.

BSR, a nonprofit that advises its 250 member companies on corporate responsibility strategies and practices since 1992, played the role of a neutral facilitator in this process. In this capacity, BSR jointly selected stakeholders with Nike, coordinated the overall process, led stakeholder discussions and consolidated overall feedback. Nike's Sustainable Business and Innovation team managed the overall reporting process, and actively participated throughout the stakeholder engagement as an information provider and listener.

Stakeholder Selection

Nike and BSR jointly developed a list of stakeholders for outreach balancing the need to meet the following different criteria:

  • Understanding and ability to comment on the company through previous interactions
  • Ability to provide new and distinct perspectives
  • Expertise and reputation in corporate responsibility strategy and specific content areas
  • Geographic, gender and issue diversity

Fourteen stakeholders were identified and invited to participate in the process, of which the following 13 participated in the process:

Sharon Burrow, president, ITUC / ACTU, and Neil Kearny, general secretary, ITGLWF, were invited to participate in this process in order to include a labor union voice. However, schedule misalignments prevented their participation in this process, despite several attempts to seek their input. Since then, Neil's life was tragically cut short. This report is dedicated to him.

Engagement Process

In order to assure diversity of voices and reduce carbon impact, the stakeholder engagement process was run virtually. First NIKE, Inc. and BSR conducted an in-depth one-hour telephone interview with each stakeholder separately, after they had had a chance to read a report draft. In these one-hour conversations stakeholders were able to share their thoughts on overall report strengths and opportunities for improvement and hone in on specific content areas of interest. These individual conversations assured that each distinct stakeholder voice was provided an equal amount of time, was listened to and their feedback was taken into account.

Next BSR and NIKE, Inc. aggregated feedback and the Nike team addressed stakeholder input in one of the following three ways:

  1. Revamped certain sections of the report
  2. Made language and tone changes to better clarify particular report sections
  3. Flagged some stakeholder input for future considerations in Nike's SB&I strategy and/or future reports

Stakeholders were then invited to one of two virtual engagement sessions (to accommodate a variety of time zones). In order to facilitate an open and honest conversation these final panel sessions were aided by video conferencing software. BSR facilitated both discussions that included stakeholders and senior Nike staff.

During these panel sessions, Nike shared consolidated stakeholder feedback and resulting report changes. Stakeholder participants had the opportunity to comment on the stated changes and overwhelmingly were appreciative of the changes Nike had made as a direct outcome of stakeholder advice and insight.

Engagement Outcomes

As a result of this process, significant changes were made to the report. Key changes included:

  • Overall tone. While stakeholders found the report to be transparent and complete, many found the volume of information to be overwhelming. Given this feedback, Nike reworked the report structure to clarify and remove non-core information
  • Strategy. A description of the rapidly transforming global context and how this relates to Nike's business was added. Additionally, Nike's journey from having a corporate responsibility function toward becoming an integrated sustainable business and innovation model was further developed. The team also worked to better tie the overall SB&I vision and strategy to performance goals and activities based on stakeholder feedback
  • Environment. The discussion of water was expanded given stakeholder feedback on the overall importance of this issue. Additionally Nike's recent leather policy and the role of IT to reduce energy use were added
  • Workers and Factories. The overall tone was reworked to speak more candidly about lessons learned from both successes and failures. New content was added relating to Freedom of Association, Human Resource Management and the root causes of excessive overtime
  • Communities. This was improved upon through clarification of Nike's shifting approach from a less-targeted philanthropy strategy toward a sustainable investment strategy

The stakeholder engagement process did not attempt to dilute stakeholder commentary into one joint statement, but instead centered on Nike-addressed consolidated feedback and key recurring themes from across 13 divergent and rich stakeholder perspectives.

Overall, the stakeholders participating in this process appreciated the virtual nature of this process, the candor of discussion and the seriousness with which Nike responded to and acted upon their feedback. Nike was also pleased with the fresh and diverse perspectives and thoughtful input provided by the selected stakeholders. Nike believes it has benefitted greatly from this engagement process and is most appreciative of participants for the time and energy they brought to this process.

Assurance

Nike continues to seek quality and transparency in its management and reporting. As we do this, we have explored additional ways to provide assurance around our processes and reported data.

Various data points are confirmed internally through staff and systems established to collect and review data and externally through third parties such as the Fair Labor Association (FLA), CHWMEG and PATH.

With our FY05/06 report, we engaged NIKE, Inc. internal audit to conduct an assessment of the CR report process. Their report covered a range of issues for improvement and investment (detailed below). We felt, after focusing our reporting to key impacts and business targets, we had significant work to do internally on assurance.

Issues for Improvement and Investment

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In 2008 we explored long-term third-party assurance and audit systems with leading providers. At the time, available approaches appeared to be very cumbersome and had the potential to lock us into systems of reporting that are less nimble and less able to address the fact that this is an evolving practice area.

Our aim is to measure our performance and report accurate data. At times, that means that systems and methodology for gathering information need to change even as we collect data, as we learn more about whether we are asking the right questions and whether we are getting the information that will help us to answer them rather than just information.

We still see value of external assurance around key areas of impact, but believe we have internal steps to complete before undertaking this kind of robust review. These steps include engaging a broad range of internal and external stakeholders around the direction and value of such assurance and addressing issues raised in our internal audit.