NIKE, INC. | Environmental targets at Nike, Inc.

Status
AGM passed
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
NKE
Lead filer
Trium Capital LLP
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Climate change
  • Waste and pollution
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
RESOLVED: Shareholders request the Board of Directors prepare a report, at reasonable cost, omitting proprietary information, and published publicly within one year from the annual meeting date, and containing the following:
•An analysis of NIKE, Inc's failure to meet its self-imposed quantitative sustainability targets for FY15-20, now
discontinued, and whether reinstating them is advisable.
•An analysis of NIKE, Inc's corporate governance around sustainability, examining the mechanisms in place to define,
communicate and execute its sustainability strategy within the broader business strategy.
•A discussion of the potential additional measures NIKE, Inc could implement to ensure it achieves its sustainability
objectives irrespective of consumer preference and marketplace demand.
Whereas clause
WHEREAS: NIKE, Inc. pledged a robust sustainability agenda but fell short on most of its targets, casting doubt on its commitment and communication reliability.

Trium Sustainable Innovators' investment in NIKE, Inc. is based on the expectation that it can achieve profitable growth in the long term. We recognize differing investor views on achieving this. While we acknowledge the fashion industry's negative environmental impact and associated financial risks, we respect differing perspectives. However, inconsistent strategy communication and execution serve neither investor group well.

The FY20 NIKE, Inc. Impact Report indicates that only 7 of 19 targets set for FY15-20 were achieved. Several targets were missed significantly or showed no progress. Moreover, objectives were altered or discontinued when the company set out its targets for the FY20-25 period, as shown in the FY21 Impact Report.

Amongst the most noteworthy failures:

The target to reduce average product carbon footprint by 10% in FY15-20 saw no progress, Nike’s FY20 footprint per unit
matched that of FY15. The FY21 Impact Report omits mention of the product carbon footprint, setting a less ambitious 10% waste reduction goal per unit for FY25 across manufacturing, DCs and HQs for FY25.

Five energy related targets were set, including achieving 100% renewable energy in owned sites by FY20 and four energy intensity goals. Progress toward the renewable energy target reached 48% in FY20, but energy intensity targets saw minimal progress and were discontinued in the FY21 Impact Report, with the renewable energy target postponed to FY25.

Three chemistry related targets (restricted substances and supplier wastewater management practices) were unmet in FY20 and discontinued in FY21 Impact Report. The current FY20-25 target focuses on "adopting clean chemistry alternatives for our 10 priority chemistries across our supply chain".

NIKE, Inc.'s explanations for these failures appear to absolve itself of responsibility, attributing them to "consumer preference" and "marketplace demand". This overlooks the company’s influence on demand through pricing, supply volumes, and product visibility on its direct sales channels.

We are disappointed by the firm's track record and lack of perseverance in reaching its self-imposed sustainability objectives.

How other organisations have declared their voting intentions

Organisation nameDeclared voting intentionsRationale
Anima SgrForInvestors would benefit from additional information regarding the reasons why the company missed and restated certain FY20 targets. Investors would appreciate further information on how the company sets, manages and oversees its sustainability targets to ensure that they are achieved and tied into the company's strategic decisions.
Wesleyan Assurance SocietyFor

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