Our Code of Conduct for Suppliers
What to know
We set clear, foundational expectations for our suppliers to be in compliance across all standards of our Code of Conduct.
When it comes to business and sport, we value fair play. We believe world-class manufacturing is grounded in standards that respect the environment, the people who work in factories and the principles of a healthy and safe workplace.
We have a responsibility to run our business in an ethical way, and that responsibility extends to the contract manufacturers who make our products.
Our Code of Conduct and Code Leadership Standards set our expectations for suppliers and reflect our priorities across labor, health and safety, and the environment.
NIKE is a signatory of the Social Labor Convergence Program (SLCP) and a member of the Sustainable Apparel Coalition (SAC) which seek to drive industry convergence on factory compliance to mitigate issues through use of the Higg Facility Environmental Module (Higg FEM) and other industry-aligned tools. Their approach is based on supplier ownership of responsible manufacturing and aligns with NIKE’s approach to drive long-term and consistent performance with suppliers. We are replacing our current supplier factory assessment system with this industry approach to monitor labor, health and safety, and environmental compliance. NIKE began scaling the use of the industry tools in 2020 with facilities in our extended supply chain, including in distribution centers, in support of commitments made.
Commitment is Everything
At NIKE, we believe that although there is no finish line, but there is a clear starting line. The NIKE Code of Conduct and Code Leadership Standards lay out the minimum standards we expect each supplier facility to meet. We expect all suppliers to share our commitment to the welfare of workers and to use natural resources responsibly and efficiently. These minimum standards are integral to NIKE’s supplier strategies – how we evaluate baseline performance and determine the suppliers with which NIKE will continue to engage and grow our business. We work with suppliers who show a commitment to managing their business responsibly and sustainably.
Our Expectations
We expect all suppliers share NIKE’s commitment to respecting the rights of workers and advancing their welfare, with particular care for people with unique vulnerabilities such as women, foreign migrant workers, and temporary workers. We also expect suppliers respect the environment by focusing on areas such as carbon and waste reduction. As part of NIKE’s growth strategy, we seek suppliers who are building agile and resilient management systems which enable them to drive sustainable business growth through developing an engaged and valued workforce, fostering a strong culture of safety, and minimizing their environmental impacts.
Our Vision for Collaboration
NIKE recognizes that achieving our vision of a more resilient and responsible supply chain will require increased collaboration not only with suppliers, but with other brands and all stakeholders in the supply chain. We believe that relationships based on transparency, collaboration, and mutual respect are integral to making this happen. We continue to work with suppliers and expand engagement with civil society, unions, governments, and others to affect systemic change to labor, health and safety, and environmental conditions in communities where suppliers operate.
NIKE’s Code Leadership Standards communicate how supplier facilities should implement the Code of Conduct. The document also provides deeper detail into how we measure a facilities compliance efforts and progress.
In 2005, we were the first company in our industry to publicly disclose our factory base, in the interests of transparency and collaboration. NIKE’s Manufacturing Map is a tool to learn about the independent finished goods facilities and materials suppliers contracted to make Nike, Jordan and Converse products. The interactive map is updated quarterly to reflect changes in our source base.
This resource provides extensive details about the suppliers NIKE works with around the world. For each facility, you are able to learn more about the types of products made, the factories that supply our collegiate product, demographic statistics about workers at each factory and the factory address.
NIKE co-led the development of the Zero Discharge of Hazardous Chemicals (ZDHC) Wastewater Guidelines, a collective effort of all member brands in the ZDHC Foundation to continuously work to improve wastewater discharges. Through the power of collective action, one wastewater test per the ZDHC Wastewater Guidelines is valid for all member brands of the ZDHC.
The NIKE Code of Conduct sets the basis for our chemistry strategy. Based on this policy, all suppliers must properly manage chemistry and create approaches that help meeting our Restricted Substances List (RSL) and ZDHC Manufacturing Restricted Substances List (MRSL) requirements. We continue to support and drive development of transparent guidelines, tools and training programs within our industry through work in groups such as the Apparel and Footwear International RSL Management (AFIRM) and the ZDHC Foundation. Together, these programs continue to accelerate us toward realizing the vision of zero discharge of hazardous chemicals.
The Social and Labor Convergence Program (SCLP) is a pioneering initiative that seeks to develop a simple, unified and effective industry-wide way to assess labor, health and safety conditions in facilities, with the goal of replacing current proprietary audit tools used by individual companies. In facilities producing product for multiple brands, this reduces the number of audits, increase industry efficiency, reduce audit-related costs and allow participating organizations to invest resources previously designated for compliance audits into the improvement of social and labor conditions. It is also be a step in the direction of enabling a more collaborative approach to address risks and opportunities in the industry.
All potential new Tier 1 finished goods suppliers are subject to the New Source Approval Process. Risks of starting a new supplier relationship within the requested country are considered. Suppliers must receive an overall Bronze rating—our base acceptable level—prior to beginning full production.
Introduced in 2012, NIKE’s Manufacturing Index scores facilities based on four equally weighted categories: sustainability performance (including labor practices), and three traditional manufacturing metrics (cost, quality and on-time delivery). We assess the sustainability component through our Sustainable Manufacturing and Sourcing Index and focus on bringing all factories to a Bronze rating (our minimum standard) or above.
NIKE takes issues of non-compliance seriously. If we are alerted to an issue of non-compliance with our Code of Conduct or Code Leadership Standards within one of our suppliers, we investigate and, where improvements are required, we take a collaborative approach to working with facility managers to see that corrective actions are taken and that problems are remediated. Should a supplier fail to remediate issues identified by an audit or allegation investigation according to NIKE’s requirements, it is subject to review and sanctions, including potential termination of the supplier agreement.
In the event that the relationship with an existing supplier is terminated, either resulting from poor sustainability performance or other reasons, NIKE’s responsible exit process is triggered. This includes evaluation of the risks to NIKE, the workers, local community and environment associated with the upcoming divestment.
We take this process seriously. It includes a reduction in production orders over a determined length of time to create the least amount of disruption to a business and workers as possible. In high-risk situations, multi-stakeholder working groups are assembled to develop and monitor an exit plan designed to manage the risks identified with the divestment.