Norway’s wealth fund announced on Thursday that it will support a motion requesting Nike to investigate legally binding agreements with workers. The goal is to determine if these agreements will improve the company’s ability to address human rights issues when sourcing from high-risk nations.
The plan argues that Nike falls behind competitors like Adidas and Puma due to its failure to sign legally binding agreements between brands and trade unions, such as the Pakistan Accord. It gains significant momentum from the backing of the $1.7 trillion fund, Nike’s ninth-largest shareholder.
Investors were advised by Nike to vote against the Domini Impact Equity Fund proposal. On September 10, at Nike’s annual shareholders’ meeting, shareholders will cast their ballots.
Domini was one of the more than 60 investors who collectively sent a letter to Nike last year requesting that the company reimburse more than 4,000 garment workers at two suppliers in Thailand and Cambodia for allegedly unpaid salaries totaling $2.2 million.
Workers lost pay as a result of COVID-19 plant closures, according to labor rights organizations. Nike has refuted the claims.
As of June 30, the Norwegian wealth fund held 0.92% of Nike’s shares, or around $1.05 billion, according to fund data.
“The board should account for material sustainability risks facing the company, and the broader environmental and social consequences of its operations and products,” the fund said on its website.
Norway’s wealth fund announced it would not support a second shareholder resolution. The resolution asked Nike to assess how effectively its supply chain regulations protect workers’ rights. Tulipshare’s proposal was a reiteration of one that received 11.7% of the vote during the previous year’s conference.
CLIMATE TARGETS
Nike failed to meet its own climate commitments. As a result, the Norwegian fund announced that it will support a shareholder petition urging the sportswear giant to review its sustainability approach.
According to Trium Capital’s proposal, Nike is asked to provide a report detailing how it failed to reach its own, since-cancelled goals for the years 2015–2020 within a year.
Nike’s “track record and lack of perseverance” in meeting its self-imposed sustainability targets, according to Trium, has disappointed the company.
Glass Lewis and ISS, proxy advice companies, had also advised shareholders to support the plan. According to ISS, the business missed and reiterated many of its goals without providing enough context for how supervision will improve going forward.
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