Nike’s Economic Impacts

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LIN XUELONG

Concept

This diagram shows the triple bottom lines in CSR. In the class, when we talk about the CSR and its concept, we mainly refer to a company’s operations, whether a company’s (mostly) voluntary commitment to operating in an economically, socially and environmentally sustainable manner whilst balancing the interests of diverse stakeholders.

As we see more detail in this diagram, we can view these three lines as the company’s impact on economic, environment and social. For a company, the main impact on economic is whether the company is making profit or going to make profit. In my own opinion, we can grade or judge a company’s economic impact based on its financial reports or the return to shareholders’ investments. In terms of environment, a company’s main impact is whether the company’s productions or operations will hurt or damage the environment. In my view, checking the process of productions and the supply chain will be helpful for us to think a company’s environment impact. As for the social circle, it mainly refers to its social influence to other party, including a lot of its stakeholders. For example, the company’s labor policy will have huge impact on its social influence.

A company example and own assess: NIKE

For NIKE’s economic impacts, it is easy to see from its annual financial reports. According to its latest financial reports (2017), NIKE, Inc. revenues grew 6% to $34.4 billion on a reported basis in 2017 (NIKE, 2017), which means NIKE is one of the market leaders in this fast fashion industry. As for the earnings per Share, it rose 16% to $2.51 (NIKE, 2017). In my own opinion, I think NIKE does well in this economic part. Basically, NIKE’s earning ability is quite strong in its industry. It has a positive economic impact.

For NIKE’s environment impacts, it should be considered its daily productions and operations. Since NIKE’s products vary from shoes to clothes, the material in its productions will be a big issue in its environment impact. NIKE uses many materials to make all their products. So it is quiet impossible to verify each material in its product. Fortunately, NIKE has only six main materials in their production, including polyester, rubber, eva-foam, cotton, leather, and synthetic leather (THE OHIO STATE UNIVERSITY, 2015). We can check the sources of these materials to evaluate its environment impact. Recent years, NIKE had made great improvements on its green productions. For example, NIKE claims that it had extensive discussions with suppliers and is highly confident that leather in Nike products doesn't come from the Amazon rainforest. Nike does not believe in harvesting leather from animals in the amazon because they believe that it is contributing to the deforestation but before 2011 they were using leather taken from the Amazon (THE OHIO STATE UNIVERSITY, 2015). NIKE also does a lot of efforts in making its production more environmental friendly. However, there is no standard materials sources tracing system in NIKE. Due to the limitation of data, the sources of some materials cannot be found. For example, the source of wool and down feather are not specified (GOOD ON YOU, 2017). This can be problematic as the welfare of animals and workers is unknown and is not guaranteed. In short, NIKE achieves a lot of improvements in making its production process more environmental friendly. However, there are still some problems in terms of animal welfare, biodiversity and so on. So, in my view, NIKE is just ok in environment impact when I consider its CSR.