NIKE, Inc. (Nike) is engaged in the design, development, marketing, and selling of athletic footwear, apparel, equipment, accessories, and services. The company sells its products to retail accounts, through NIKE-owned retail stores and internet websites and through a mix of independent distributors and licensees throughout the world. All of the company’s products are manufactured by independent contractors.
Since the company’s inception, Nike has thrived on creating innovative products with outstanding aesthetics and performance. Today, this innovation has been extended to include products that maintain the company’s original thesis, but that also have a reduced environmental footprint. For example, Nike’s Flyknit technology reduces material waste by allowing an upper of a shoe to be engineered stitch by stitch. Moreover, the company outlines explicit energy, waste, and water reduction targets and even created specific indexes to score its products based on environmental criteria, thereby promoting transparency and standardization within the industry. In the long term, the company seeks to source 100% renewable power in its owned and operated facilities and landfill waste free for all of its contracted facilities. Nike ensures supplier compliance through transparent codes of conduct and audits, but also goes beyond compliance by providing incentives for suppliers with superior performance. Furthermore, the company is working with industry partners to standardize codes of conduct and audit practices while increasing transparency.
Although Nike has continued to improve upon its raw material sourcing, the company only uses slightly greater than one third of sustainably-sourced cotton. Nike has also encountered critiques of its governance, particularly because of its controlled status and deviations from one share one vote.
Industry: Consumer Discretionary
Country: United States
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 12/31/16 and may not reflect current opinions or subsequent events.