New Reports from GE and Nike: A Watershed in Social Disclosure (A)
In 37 years of writing about corporate social responsibility, I have done my fair share of scolding companies. And there was never a shortage of targets. Inherent in those critiques, though, was the sense – my sense anyway – that companies could do better, that they did not have to behave like beasts in a jungle. I am looking at two reports that demonstrate that companies can change and address social issues in constructive, meaningful ways.
The reports come from companies absent from most social investment portfolios: Nike and General Electric.
GE’s 2005 Citizenship Report, “Our Actions,” is the first social responsibility report issued by the company. It provides a window into GE that we didn’t have before. Here are some nuggets:
GE has decided not to pursue business opportunities in Myanmar because of this country’s “history of human rights violations,” a sharp contrast to the actions of the big French oil company, Total.
One-third of GE’s officers and 40% of its senior executives are women, U.S. minorities and non-U.S. citizens, up from 22% and 29%, respectively, in the year 2000.
GE now compels its suppliers to be in compliance with environmental, health & safety and labor standards. Since 2002 GE has terminated 200 suppliers for their failure to improve performance.
It’s great to welcome GE to this dialogue (pace Jack Welch), but if awards are being passed out for social responsibility disclosure, the Oscar has to go to Nike. Its “Corporate Responsibility Report” is a gem.
Nike is the world’s largest supplier of athletic shoes, apparel and equipment. It makes virtually none of its products, sourcing them from contractors, mostly located overseas. The company has long been the bete noire of activists who deplored the working conditions in Asian factories. When those protests first surfaced, Nike stonewalled them. Now it has done an about-face. In its new report, it not only faces up to the responsibilities a company has when it outsources manufacturing, it sets a level of transparency for others to emulate. Nike currently has a roster of 830 approved factories in 52 countries. They employ more than 650,000 workers, the majority of them women between the ages of 19 and 25. Some 200,000 of these workers are employed at factories in China; another 84,000 work at plants in Vietnam. View the full list at Nike’s website, www.Nikeresponsibility.com, where you will see the names and addresses of 731 active contract factories. Nike hopes this disclosure will stimulate other companies to follow suit.
Nike’s Code of Conduct bars child labor, respects the right of employees to form unions and binds factory owners to provide “a safe and healthy workplace” and “to promote the health and well-being of all employees.” The report details an elaborate system of inspection and grading to insure that factories meet the standards and correct deficiencies.
An admirable feature of Nike’s report is its tone. It is modest in its appraisal, conscious of past mistakes and aware of how much still needs to be done. Nike had help from a Report Review Committee consisting of nine people from the NGO, academic, labor, investor and public interest communities. The chair was Deb Hall, director of accountability programs at CERES. Another member was Thomas Gladwin, professor at the University of Michigan business school and a Trillium Asset Management board member. The group issued its own report on Nike’s report, commending the company for its candor and suggesting ways to improve future reporting. Nike included the committee’s comments in its full report.
The message for other companies: Just Do It!