Investor pressure on Nike builds over garment workers’ rights

LONDON/NEW YORK: Investor pressure on Nike is building ahead of Tuesday’s annual shareholder meeting, with Norway’s sovereign wealth fund pledging to back a resolution demanding the company consider ways it can improve working conditions at garment factories.

Nike is struggling with sliding sales and also faces criticisms over its supply chain. Investment research firm MSCI downgraded its ESG (environmental, social and governance) rating for Nike in 2022 and 2023, and rates it as a “laggard” on supply chain labour standards.

The resolution proposed by a group of investors including Domini Impact Equity Fund says current approaches in the industry “often fail to identify and remedy persistent rights abuses such as wage theft, inadequate health and safety or gender-based violence”.

Domini was among more than 60 investors last year to sign a joint letter to Nike urging it to pay $2.2 million in wages to workers at suppliers in Cambodia and Thailand whom rights groups said were denied severance pay owed to them after factory shutdowns during the pandemic. Reuters could not independently verify the allegations, and Nike has denied them.

In a statement, Nike said its corporate governance team had been in touch with all the co-filers of the resolution.