Environmental Approach And Social Responsibility Of Nike And Adidas

Core business activities of Nike and Adidas; the countries and industries in which they operate

Discuss about the Environmental Approach And Social Responsibility.

Corporate social responsibility provides the value of positive understanding and perception of regulatory authority, financial markets, communities, shareholders and institutional investors also with business partners. Multinational organisations maintain the corporate image and branding through the corporate social responsibility (Suliman, Al-Khatib& Thomas, 2016). In this report, Nike and Adidas; two organisations have been chosen as these companies both are in apparel and accessories industries; however, both belong from two different countries. In the first section of the study, differences between two companies have been specified in terms of the range of issues dealt with social reports. Sustainable Development Goals (SDG) of the two organisations has been discussed. Apparent quality of the social accounting approach utilised by both companies is discussed in this report. In the final section, shared values of both Nike and Adidas have been explained.

Nike Inc. is an American organisation and it has it headquarter in Washington County, Oregon. Nike is a multinational company and it is in the industry of apparel, accessories and sports equipment. It was founded in 1964 and it is a public company. It serves on a worldwide basis and Nike is famous for athletic shoes as well as for apparel. Nike has made segregation of the business in a few parts, footwear, apparels, equipment and global brands. Revenue of Nike was US$ 34 billion in the year 2016 and the organisation employed almost 74,000 employees in 2017 (About.nike.com, 2018). Core activities of Nike are associated with designing, marketing and development of products (Abount.nike.com, 2018). Nike itself does not have any manufacturing site as the organisation produces the products from the independent contractors. Nike focuses on designing and development of new products in order to be a market leader. Nike uses DyeCoo technology and it also uses the advance waterless textile dyeing. Nike also uses the technology like Plant PET Technology Collaborative (PTC) in to order to enhance fibre and Poly Ethylene Terephthalate materials.  

Adidas has it headquarter in Herzogenaurach, Germany and it is in apparel and accessories industry. Adidas manufactures the clothes, shoes and accessories. Adidas was established in 1924 and at present, it serves on a worldwide basis. Adidas is the largest sportswear company in Europe and Adidas is the sponsor of major sports’ club. Adidas collected the revenue of €19.28 billion in the year 2016 (Adidas.group.com, 2018). Adidas follows the business activities like increasing the product lines and Adidas has a strong identity in sports. Moreover, Adidas appeals to sports lovers and the athletes. Adidas identified six cities to increase the revenue Adidas focuses on various sportswear like Baseball, basketball, cricket, golf, lacrosse, gymnastics, tennis and kabaddi.

Evaluating the differences evident between Nike and Adidas range of issues dealt with in their social reports

Nike does not have the manufacture units and it emphasises on the manufacturers which have less impact on the society. Nike is using FlyKnit technology to decrease four million pounds of waste. Nike converted three billion plastic bottles to polyester to make Vapour football. Therefore, Nike is conscious about the social responsibilities and Nike has contracts with more than 700 shops in more than 45 countries. Nike has been facing the issue of contracting with the factories in Indonesia, China and Vietnam. Nike has its sweatshop in developing countries as these countries have low wages. Nike violated the minimum wage and the company exploited the labourers through cheap wage. In addition, Nike has been facing the social issue of child labour allegation in Pakistan and Cambodia. In Pakistan and other developing countries, Nike used the child labour to make the soccer balls. Nike’s manufacturing centre in Yue Yuen; China; the employees did strike for the underpayment (Agan et al., 2016). In addition, CSR report of Nike states about the sustainable innovation plays the catalyst to revolutionise the process of doing the business. Nike takes the three strategies in order to improve the sustainability; the first; the organisation minimises the environmental footprint through focusing the energy, water, waste and chemistry. Second, Nike is transforming the manufacturing process through introducing the sustainable labour innovation (Buckler, 2017). Third, Nike is focusing on the human potential which drives to encourage the human resources.

Adidas focuses on the supply chain so that the supply chain should be more socially responsible to empower the staffs in order to promote fair, safe and healthy condition to the suppliers’ factories. In addition, Adidas has been faced criticism for the sweatshop in Indonesia. Adidas also rejected some of its suppliers which do not support the unions and do not follow the reputed labour rights. Adidas follows the policy including the freedom of the workers and the workers can choose the collective bargaining. Adidas bought a paper packaging company and this company was labelled as destroying the precious habitat (Adidas-group.com, 2018). NCAA corruption scandal was another part of Adidas corruption According to Caridi et al., (2014), Adidas has brought technological innovation and it has made a partnership with Parley in order to make aware the people about Oceans. Adidas is going to make shoes from the yarns and filament recycled from the waste of oceans. Adidas joined UN initiative on Climate Neutral to assist the society to understand climate change. Average resource consumption for a pair of shoes:

Explaining social activities differences of Nike and Adidas by the country

Table 1: Nike’s average resource consumption for a pair of shoes

(Source: Adidas-group.com, 2018)

In apparel and clothing industry, prices of raw materials and resource scarcity and problems of supply chain create concern for the organisations (Lu, Liu &Rahman, 2017). Nike has set the Sustainable Development Goals to reduce the consumption of waste to bring minimal changes. Nike is a global organisation and the organisation assesses the practices, plans and re-evaluates the company policy. Nike has set the goal of ‘Responsible Consumption and Production’ and Nike will work on energy efficiency, providing access to basic services, sustainable infrastructure and green and quality life to the communities. Nike has implemented some basic technologies to consume less of energy and this goal helps to achieve overall development plans. Nike has sustainable plan to minimise the environmental footprint that influences overall value chain (Parsa et al., 2015). The second goal of Nike is to build the ‘infrastructure, sustainable industrialisation and promote the innovation’. Therefore, Nike invests in the transportation, irrigation, information and energy. Therefore, Nike will empower the communities to grow the product and bring improvement in health and education. Nike has adopted FlyEase technology and Nike brings the FlyKnit technology.

Adidas has its sustainable strategy in order to target to optimise the environmental impact. Adidas takes the approach to address the water efficiency and the Adidas is committed to use more sustainable materials. Adidas has set the goal to improve ‘sustainable cities and communities’. Cities have enabled the people to advance economically and socially. Adidas works for the communities which are near to the offices and many challenges are existed to improve the community. Adidas tries to create the job opportunity for the community and they work for the prosperity of the community. Urban challenges are associated with the lack of funds, congestion, shortage of space and declining infrastructure. Another goal of the organisation is to combat ‘climate change and its impact on the society’. Adidas does not want to make its environmental impact on the society as they want to drive towards the closed-loop solutions. Adidas is further committed to decrease the absolute energy in order to consume CO2 emission, clean energy and energy harvesting opportunity (Plambeck& Taylor, 2015). Climate change can affect each of the country and it can affect the lives, people, countries and communities. People can face impact of climate change like weather change, rising of sea levels and more extreme weather events.

First of all, inclusivity principle is stated about social and ethical accounting that needs to reflect on views and opinion of stakeholders (Russell-Smith et al., 2015). When making decisions about any social or environmental issue, Nike considers the reasonable expectations and interests of the stakeholders. Nike asks the stakeholders to collaborate the process of decision-making in business. Adidas has its committee to do the market research so that the stakeholders can make decision to make set of objectives. Comparability is the performance of the firms and it should be judged through assessing the values of the firm (Zadek, 2004). Nike has already set the benchmark that sells the largest amount of sportswear. Nike also sells significant amount of money on doing the social activities. In addition, Adidas focuses on the supply chain and the climate change issue. Reducing the waste is the process to use recycled things and the organisation focuses on renewable energy. Adidas also focuses on the wage of labourers. Completeness is about companies’ activities checking procedure and no areas should be overlooked. Nike’s sustainability report focuses on the business operation and product development process. Nike has its manufacturing contracts of the independent suppliers and it has 1 million contract factory workers. Nike sells its products in 110K retail locations (Uhrich et al., 2014). Adidas focuses on the business aspects and all essence of the marketing and stakeholders are explored. It is not possible in CSR report to cover all areas of footprint; however, companies need evolution. Nike reduces the environmental footprint through using technologies like dry watercolour, polyethene, PET system and other technologies. Adidas on the other side uses renewable energies, green supply chain, driving innovation and advancing human right works. management policy and system is another principle where companies need to do the environmental auditing as well as financial policies. Therefore, Nike does the environmental auditing through Internal Audits in order to do systematic policy along with developing clear policy. Adidas allows the accounting process in evaluating the awareness of organisation.Disclosure is the principle when the companies should provide information about ethical and social accounting made for external and internal audiences. In addition, Nike uses the CSR report and website Public Relation to publish the report for both internal and external public. Moreover, Adidas focuses on publishing the CSR report for strengthening the company’s legitimacy. External verification is very significant for making strong accountability (Zadek, 2004). Nike has taken the permission of USA government and agencies in setting the standard of products. Adidas takes the permission of external agencies after validates the report. Continuous improvementis the main of the organisations and it is about retrospective performance. Nike tries to take the opportunity trough grabbing the future by improving the sales and values, mission and objectives. Adidas establishes the measurement to develop the production, profit and people through ethical and social performance.

Shared values of Nike:

• Nike likes to innovate and it is the organisation’s core competence
• Nike uses Swoosh logo
• Nike uses social responsibility as technique of brand management
• Nike believes value co-creation

For Nike, it is important to set bold and business-oriented ambition. Stakeholders encourage Nike to consider the ambition. Nike needs to refine and frame a better way about corporate social responsibility narrative. On social perspective, Nike can consider three audiences; employees, customers and long-term investors. Nike needs to consider the demonstration of linkage between business and sustainability (About.nike.com, 2018). Nike needs to consider the next move about labour transparency. Nike is considering the reporting model so that it can remark on the future about responsibilities stories. 

• For Adidas, passion is the heart and Adidas supports the passion for work
• Adidas supports athlete in sports and believes in performance
• Adidas supports the diversity in the workplace management

Adidas organisation believes in collaboration in order to share the knowledge of experts with the stakeholders, partners and suppliers. Adidas mainly does the technical specification to come up with better sports equipment and sportswear. In addition, Adidas works for the community to provide the people with employment opportunity. Adidas does products innovation through technology and it conserves water, energy and resources. Adidas provides special emphasis on supply chain and Corporate Information Transparency Index (CITI) provides great recognition to improve greener supply chain (Adidas-group.com, 2018).

Conclusion

Corporate social responsibility provides the value of business development and employees retention. Both the organisations Adidas and Nike both are world famous for apparel and accessories industry. These organisations are competitors in the global market and both the organisations maintain sustainable development. Nike focuses more on the different elements of sustainable development and the organisation wants to reduce the environmental footprint. On the other side, Adidas focuses on CSR; planet, people and profit. In addition, Adidas focuses on the empowering the people, inspiring the community and improving the health. Both Nike and Adidas have been integrating the sustainability into the core business.

Reference List

Adidas Environmental approach. (2018). Retrieved 14 May 2018, from https://www.adidas-group.com/en/sustainability/compliance/environmental-approach/

Adidas Social Responsibility (2018). Retrieved 14 May 2018, from https://www.adidas-group.com/media/filer_public

A?an, Y., Kuzey, C., Acar, M. F., &Aç?kgöz, A. (2016).The relationships between corporate management

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