31 May Nike Acknowledges Diversity Shortfalls In FY16/17 Sustainability Report
In its just-released FY16/17 Sustainable Business Report, Nike Inc. stated that leadership representation for women globally and underrepresented minorities (URM) in the U.S. “have not evolved as fast as we would have liked” since the company’s last sustainability report arrived in 2016. The report also lists an extensive number of steps Nike is taking to improve diversity and inclusion efforts.
The report addressed the accusations of workplace harassment first announced in March that has led to a host of high-profile executive departures and calls within the company for a cultural change. While the 73-page report covered a wide range of sustainability issues, Mark Parker, CEO, called out the cultural transformation being addressed inside the company in a letter accompanying the report.
Parker wrote, “With more determination than ever, we’re creating a company culture where everyone has an opportunity to play an important role and be successful. We’re measuring ourselves against three areas: diverse representation and an inclusive community that embraces it, comprehensive, equitable pay and benefits and employee development and wellbeing.”
As reported in the press and noted in the report, Nike has launched an overall review of its HR systems and practices, elevated internal confidential complaint processes, and added a number of training programs to support its diversity and inclusion goals.
Nike’s sustainability report noted that the company in 2018 “elevated the Diversity team to sit at the heart of Nike’s People and Culture Strategy.” As noted in the report, part of that involved the appointment of Kellie Leonard as the company’s first-ever chief diversity and inclusion officer.
Additional funding is also being reserved for mentoring, training and development. The report detailed an extensive list of initiatives “designed to further accelerate our culture and prioritize our people” that will roll out in the remainder of FY18 and FY19.
The initiatives include, by timeline:
- FY18/19: Promotion-Pay-Performance Evaluation: Promotion, pay and performance results will be evaluated to assess the impact on all employees with a specific focus on improving diversity in talent and representation. Time-in-job and the pace of promotions across Nike’s employee base–with a strong focus on women and URM–will be studied to understand their impact on representation.
- FY18/19: Dedicated Talent Sourcing: A dedicated diversity sourcing team will be created to ensure a diverse group of candidates are included in hiring processes. The team will also work to remove bias in the hiring process by creating more inclusive job descriptions, allow blind resume reviews and eliminate salary histories.
- FY19: Global Pay Equity: Nike has set a goal of having a 1:1 pay ratio for both women (globally) and URM (U.S.).
- FY19: New Bonus Structure: A new team-based PSP (Performance Sharing Plan) bonus award structure will be put in place to reinforce teamwork and collaboration.
- FY19: Representation Accountability: Senior executives will be held accountable for increasing representation with a focus on improving promotion, retention and hiring aspects to support those goals.
- FY19: Diverse Talent Investment: Nike will be evolving the company’s current development offerings, creating new programs that accelerate emerging diverse leaders and expanding the company’s employee networks to better support “diverse talent.” Beginning in June 2018, a targeted leadership training program will begin with an initial focus on improving representation of women and URM.
- FY19: New Mentoring Programs: New mentoring programs will arrive to accelerate career growth and development for women and URM
- FY19: Unconscious Bias Awareness Training: Unconscious Bias Awareness training will be rolled out to the entire Nike organization “aimed at creating a stronger, more inclusive culture.” The program will launch in the U.S. and Canada in August 2018, with a global launch to all 67,500 employees in mid-FY19. Nike’s senior executives went through this training already in FY18. Over 1,100 employees were trained in Unconscious Bias Awareness in FY16/17.
- FY19: Manager Training: Manager Expectations: Mandatory manager training programs focusing on “living a culture of respect, inclusion and accountability” will start to be rolled out in May 2018. The program “ensures all managers are clear on expectations–when and how they are compelled to act–and that they have resources to lead in a manner consistent with our values and behaviors.”
- FY19: Immersive Executive Development: A program for “our most senior leaders” will help them “re-connect to leadership expectations, receive direct feedback and take accountability for their role in evolving Nike’s culture.”
Nike noted in the report that URM can only track the U.S. at this point, although a priority is to increase URM representation globally. Also pointed out was that while the focus is on increasing representation of women and URM in the near term, Nike will continue to expand representation across other dimensions over the long term.
Nike wrote, “We remain deeply committed to not only improving diversity across Nike, particularly at the leadership level, but also evolving our culture and making Nike an environment focused on respect, equality, inclusion and empowerment. We want Nike to be a place where everyone has the opportunity to be successful.”
The FY16/17 Sustainability Report found that Nike is making some some progress in diversity while underscoring the under-representation of women and minorities.
Globally in FY17, women made up 48 percent of the entire workforce, 38 percent of directors, 29 percent of VPs and 25 percent of the board. The percentage of women as directors improved from 26 percent in FY16 and the percentage of women as VPs lifted from 28 percent in FY16 and 26 percent in FY15.
Regarding ethnicity, the report showed that workers in the U.S. classifying themselves as white accounted for 44 percent of the U.S. workforce in FY17, down from 47 percent in FY16 and 48 percent in FY15. The percentage of Black/African Americans has grown to 23 percent in FY17 from 22 percent in FY16, Hispanic/Latino to 19 percent from 18 percent the prior year. Asian representation remained at 8 percent of Nike’s U.S. workforce.
Nike’s FY17 data show that for every $1 earned by men, women globally earned 99.9 cents, and for every $1 earned by white employees in the U.S., URM also earned $1. Nike noted that in August 2016, the company signed the White House Equal Pay Pledge, publicly declaring its commitment to review pay and promotion practices annually, and to ensure that women and men who undertake the same work at the same level are equitably compensated.
The report, however, also included an U.K. Gender Pay Gap Report that showed gender pay issues around both salary and bonuses among the company’s wholesale and retail workforce in the U.K.. The U.K. Gender Pay was disclosed to Nike employees in early April by Nike’s HR team to illustrate the challenges the company has been facing in hiring and promoting.
The report also detailed Nike’s progress in minimizing the company’s environmental footprint and transforming the company’s manufacturing base. A major step in Nike’s last fiscal year was the signing of power purchase agreements that will allow Nike to source 100 percent renewable energy in North America in 2019, putting the company halfway toward reaching the company’s worldwide goal by 2025.
Other findings in the report:
- Seventy-five percent of Nike-branded footwear and apparel products used some recycled materials in FY17.
- In FY17, 96 percent of Nike footwear finished goods manufacturing waste was recycled or converted to energy.
- Footwear and apparel has seen a 2.5 percent decrease in average carbon footprint per unit since FY15.
- Forty percent of the suppliers making Nike’s primary materials are recycling treated wastewater back into their manufacturing processes.
- A majority of Nike’s footwear finished goods factories have eliminated outdated steam boiler systems, creating an average energy savings of between 15 to 20 percent at each location.
- Product teams now track the sustainability performance of 97 percent of Nike-branded footwear and 96 percent of Nike-branded apparel.
- The number of factories achieving compliance with Nike’s Code of Conduct (Bronze status) increased from 50 percent in FY11 to 91 percent in FY17.