Supply Chain Health & Safety

We believe all people enjoy a fundamental right to the protection of life and health in the workplace. As our global business evolves, NIKE aims to provide safe, hygienic, and healthy workplaces across our value chain, which includes workplaces operated by suppliers. We do this by adopting and refining safety systems and rules; through education and training; and by fostering a culture of health and safety.

Throughout the past five years, we have defined a roadmap for achieving world-class safety performance, tested and piloted programs to create advanced health and safety management systems, and developed new tools to measure individual competencies and leadership capabilities that enable a mature culture of health and safety in the workplace. During our pilot, we found that our control lines where the health and safety systems were piloted had 85% lower injury and illness rates compared to traditional manufacturing lines. Control lines were tested at eight different manufacturing facilities through 4 million working hours.

Our approach to OH&S rests on several foundational guidelines:

• NIKE’s Environment, Health, and Safety (EHS) Policy

• NIKE’s Code of Conduct

• NIKE’s Code Leadership Standards, communicating how suppliers should implement the Code of Conduct

• Local laws wherever we or our suppliers operate

NIKE-owned and -operated facilities and Tier 1 finished goods contract manufacturers undergo external audits and internal assessments. When those processes reveal gaps in OH&S standard implementation, we develop management skills and implement tools that fix those problems. We also consider those audits and assessments as we evaluate contract manufacturers and choose whom we work with as our business grows.

We have set a new ambitious health & safety target for 2025, that 100% of our strategic suppliers are building world class, safe and healthy workplaces for people making our products.

To achieve this target, we are focused on five key areas of work.

We will scale our Culture of Health and Safety initiative. Our focus for the next five years is to increase investment in developing a mature culture of health and safety within our strategic supplier factories. We believe that mature safety cultures activate and enable safety management systems that create world-class healthy and safe workplaces.

We will measure the maturity of our supplier’s safety programs. The “Culture of Safety Maturity Assessment” (CoSMA) tool contains 27 health and safety diagnostic elements that asses factory leadership engagement and accountability, management systems and processes, and organizational skills and capabilities. The diagnostic elements within the CoSMA show areas where the factory is performing well and areas that could improve. Areas of improvement provide a clear roadmap towards building a world-class safe and healthy workplace. The tool is now open sourced through a third-party online training platform, hosted by the Phylmar Academy.

We will encourage self-assessment. To help foster engagement, we developed online training on how to use our self-assessment tools. As of FY20, 156 factory and third-party consultants have successfully completed our online training. The self-assessment can be supported by trained third-party consultants or NIKE staff, and the results are calibrated with a worker/management safety perception survey. Calibrated results are used as a leading indicator of safety performance.

We will collaborate with external experts. As we continue to elevate a culture of health and safety within our supply chain and across our industry, we collaborate with others to resolve common OH&S issues. We have current engagements with the Fair Labor Association (FLA) and Better Work, a joint program of the International Labour Organization (ILO), and the International Finance Corporation (IFC). In our exploration of adding strategic partnerships, including one with the IOSH, we will continue to accelerate our strategy to build world-class safe and healthy workplaces globally.

We will pilot our Transformational Leadership program with our largest and most strategic suppliers. As we continue our pilot, we will adjust and customize the program to meet the cultural, language, and footwear and apparel industry sector needs of our suppliers. If the pilots prove to be successful, we plan to scale throughout our remaining 23 key manufacturing supplier groups. Effective corporate governance of OH&S and implementing our Transformational Leadership program at the highest leadership level of an organization will ensure that health and safety programs are effective and sustained.

For more information on specific programs and initiatives, please see our past reports, which outline the work we’ve done over the past several years.