HX3Y04 Global Business Management Assignment Sample
Introduction
This paper’s goal is to examine the working conditions in Bangladesh’s garment industry. This case study examines the garment industry’s past and contemporary human rights breaches through the lens of unsafe working conditions. An important aspect of the case study is the prevalence of workplace injuries, the low wage rates of workers, the failure to pay wages to workers, the practice of discrimination against women, the poor quality of air, and the lack of safety features in garment manufacturing facilities, and the industry’s attitude toward stakeholders outside of the sector (Baumann-Pauly et al., 2018). Bangladesh has a population of about 164 million people, making it one of the world’s most densely inhabited countries. Poverty and overpopulation in a country raise several human rights concerns. As a result of the open trade policies put in place by Bangladesh’s government in the early 1980s, the country’s textile sector has flourished significantly. When these restrictions were first put in place, some 50 textile companies and a few thousand people were making and selling clothing (Islam et al., 2020). A total of more than 3,000 factories were in operation in 2000, employing more than 1.8 million people and exporting more than $6.4 billion in products. There were eighty percent female employees. There is no change in the percentage of female employees. The estimated labor cost of a shirt produced in Bangladesh is 16 cents, with a suggested retail price of $13. It costs $.04 to import the shirt, but it costs $6.96 to sell it at retail because of the duty-free price tag on it.
Key sustainability issues prevalent in the garment industry
Sustainable processes are those that can be maintained or supported over an extended period. It’s a widely held view that our world will be destroyed if we don’t make significant changes to the way it’s operated. Sustainable practices and regulations have been adopted around the world as concerns about climate change, biodiversity loss, and pollution have become more popular (Voss, 2020). This movement has been primarily driven by greater investments in green technology and sustainable corporate practices.
The textile and apparel industry is one of the most polluting in the world, so sustainability issues have gotten a lot of attention. Sustainability in textile and clothing supply chains is difficult because of the complex worldwide supply chains, as well as the concurrent constraints of cost and lead time. Outsourcing garment production to nations with lower labor costs, such as China, has substantial detrimental effects on both the natural environment (such as pollution) and the social environment (such as exploitation of the world’s people resources). A company’s operations should take into account not just its financial performance, but also its social and environmental effects, according to the triple bottom line concept (Saxena, 2019). Being more environmentally friendly is now critical to the textile and apparel industry’s growth. Several aspects of this goal, including product returns, low-carbon supply chains, CSR, environmentally friendly design operations, and sustainable competition, have already been studied in academic literature.
The Human Cost of Unsafe Working Conditions
Bangladesh’s garment industry has a lengthy history of worker deaths. Many workers have perished in the past ten years because of the carelessness of manufacturing managers. The plant collapsed 30 kilometers outside of Dhaka, killing 64 people and injuring another 80. In February 2006, a fire at a textile plant in Chittagong, Bangladesh, killed 54 garment workers and injured more than 150 others. When the blaze broke out, there was only one route out for the factory’s about 1,000 employees, who had to squeeze via a slender stairwell to get out safely (Alamgir and Banerjee, 2019). Burns or asphyxia killed most of the victims, with the bulk of the casualties being women. To escape the raging inferno, a large number of manufacturing employees jumped from open windows. Two workers were murdered in a stampede after a boiler exploded at the Eurotex garment factory in Dhaka, Bangladesh, on December 3, 2010.
The Tazreen Fashion factory fire claimed the lives of 112 persons on November 24, 2012. Walmart and Sears are among the businesses that use the plant to make clothing. Walmart and Sears both stated they had no idea their clothes were being made in a factory. The factory owner and nine middle managers/supervisors were accused of refusing to let the workers leave the premises when the fire alarm went off, according to the allegations. The fire originated in an illegally stored portion of the business that had flammable fabric and yarn. As required by Bangladeshi legislation, there were no fire-resistant walls in the storage room (Hemphill and White III, 2018). As a result, there were no sprinkler systems or an outside fire extinguisher in the factory. To add insult to injury, supervisors had shut down a collapsible fence that prevented workers from accessing the staircases to flee the fire. To get out, those who were able to flee said they had to shatter windows because the emergency exit was locked. The manufacturing floor was a haze of smoke by the time the escape was unlocked. A fire license had not been obtained, hence the factory should not have been allowed to obtain the necessary factory license to operate.
The effects of sustainability on supply chains in the apparel industry
Ethical sourcing
To ensure that items are manufactured in a safe environment, ethical sourcing ensures that workers are guaranteed their safety, are paid a fair salary and are only required to work a certain number of hours each week. Good labor practices are ensured in the procurement of raw materials and manufacture (Ashadujjaman, 2019). Fair salaries, a safe and sanitary workplace, and appropriate hours for all employees are a must, as is the elimination of age discrimination in the workplace. Customers, workers, the community, and the environment all benefit from ethical sourcing techniques.
Ethical sourcing in the apparel industry:
The success of a firm today is largely determined by factors such as human rights and environmental concerns. Apparel companies are increasingly focusing on ethical principles as a way to differentiate themselves from their competitors. When it comes to green shopping, even the most greedy retailer would hesitate to offend the growing interest in the movement. Because ethical sourcing techniques increase operating expenses, the textile and clothing sector generally believes that the product price would rise as a result (Islam and Stringer, 2018). According to one study, people are willing to pay more for products that have been made with ethical standards in mind. Consumers are becoming more concerned about the dangers of sweatshops, child labor, and other forms of child labor in the textile manufacturing process.
As a vital part of ethical procurement, a supplier code of conduct establishes explicit guidelines for the vendor to follow. Quality assurance criteria must also be signed off on by suppliers. Recently, several ethical norms have come into existence. These requirements are outlined in a retailer’s code of conduct, which all factories, subcontractors, and suppliers must adhere to. Orders can be canceled if the requirements aren’t met. In some cases, retailers engage external or even internal social compliance auditors to conduct inspections and report back to them on the facts (Akhter et al., 2019)). As part of the audit, auditors examine the factory’s physical facilities, speak with employees and management, and examine personnel files.
Global best practice
It’s never been more critical to source products ethically, thanks to an increase in ethical and conscientious buyers over the last decade. It is common knowledge among brands that their commercial performance is strongly correlated to their ability to satisfy customer concerns about human rights and the environment, as well as to maintain an appropriate quality level.
Ethics in the garment industry can only be practiced through responsible, sustainable, and socially aware business practices by a brand’s sourcing operations. They concentrate their commercial efforts on this to ensure that their clothing is produced and supplied in conformity with global ethical and social standards (Baumann-Pauly, 2018). Companies are hopping on board because they’ve realized that having a good reputation as an ethical fashion company with a clean supply chain gives them an enormous competitive advantage, repeat business from customers, and a positive image for their brand. Sustainable cotton and other sustainable materials have long been touted by customers, but in practice, the way a garment is created often takes a back seat to its price and style. They have had a major impact on retail in recent decades because of their grasp of the pressing need for sustainable and ethically-sourced items. Customers should be made aware of the need for sustainable sourcing, and retailers should offer them the opportunity to purchase ecologically and socially responsible products (Ashik-Uz-Zaman, 2021). More than two-thirds of UK teenagers believe that businesses need to be more ethical, yet only 42 percent believe that brands are currently doing so, according to the Fairtrade Foundation’s sustainable and ethical cotton sourcing report. Every year, the United States spends an estimated $1.4 trillion. A global ethical revolution in fashion will be facilitated by millennials, who buy more apparel than any other generation.
More and more well-known businesses in the apparel sector are setting an example for others by committing to more transparent supply chains that adhere to higher ethical standards. Ethical sourcing strategies are employed by these four companies.
Patagonia
That Patagonia is at the top of our ranking comes as no surprise. The pioneer of green fashion Patagonia is a global leader in eco-friendly apparel. Known as one of the world’s leading outdoor brands, the firm is committed to reducing its environmental impact through ethical procurement of raw materials and finished goods (Naser et al., 2019). Organically cultivated cotton was introduced by Patagonia in 1994 as a statement against the use of chemically-intensive cotton in their supply chain. It’s no secret that Patagonia places a high priority on environmental sustainability by employing recycled materials such as bottles, roof tiles, and plasterboard to make apparel.
All of the outdoor brand’s products are manufactured safely and ethically, while also lowering the environmental impact of their production. Employees are also given health insurance, maternity and paternity leave, as well as subsidies for child care, to counteract worker exploitation (Crinis, 2019). As part of their Worn Wear Program, Patagonia encourages customers to avoid purchasing new Patagonia gear by offering to repair and resale worn-out Patagonia products.
H&M
At a cheap price, H&M is a quick fashion staple. As a result of H&M’s commitment to making trendy apparel accessible to the masses, the company produces items at a breakneck pace, making it one of the world’s largest fast-fashion businesses. Because of the negative environmental impact of fast fashion, the company has taken steps to enhance its supply chain. First-tier suppliers for H&M are publicly available for 98.5 percent of the company’s suppliers, while 56 percent of its second-tier suppliers are also publicly available. Listed on their website, it is refreshed every three months (Alam et al., 2018). In addition, the Sustainable Impact Partnership Program has been launched by H&M. Using the Higg Index and suppliers’ self-reports, this supplier assessment program tries to collaborate with suppliers to develop improvement goals.
Sustainable strategies to improve the working conditions of the garment workers in Bangladesh
As a result of Bangladesh’s garment industry’s rapid expansion, the country’s population has been able to rise out of poverty. International Labor Organization (ILO) Director-General Guy Ryder believes that “deliberate and concentrated action is urgently needed to achieve decent employment.” President Trump said in a press release that this initiative will improve workplace conditions and produce long-term growth in the economy and investment.
As part of a new, multi-year program, the governments of the Netherlands, the United Kingdom, and Canada are working together to support Bangladesh’s RMG sector. More than $19.3 billion worth of RMG products were exported from Bangladesh in the 11 months that ended in May 2013, an increase of about 12 percent over the same period last year (Nolan and Bott, 2018). After the Rana Plaza collapse in April, the Bangladeshi National Action Plan for Fire and Building Safety, among other things, will benefit from the program. By that date, all Bangladeshi export-oriented RMG manufacturers should have had their assessments completed, which is set for December 31st, 2013.
It’s a legally binding five-year initiative undertaken by North American garment and retail corporations in support of the Alliance for Bangladesh Worker Safety to improve safety in over 500 Bangladeshi factories, and it has the support of over 80 prominent brands and retailers in clothing (Alamgir and Alakavuklar, 2020). The Netherlands, as co-chair of Bangladesh’s donor coordination committee, strongly supports this viewpoint. This agreement with the ILO and our fellow donors will “empower millions of Bangladeshi employees to live healthy and dignified lives,” says Lilianne Ploumen, the Netherlands’ Minister for Foreign Trade and Development Cooperation. RMG workers have staged large-scale protests demanding better working conditions, greater construction and fire safety, and higher minimum salaries in Bangladesh following several catastrophic industrial tragedies in the past year. Hundreds of factories have been affected by these protests (Ahsan et al., 2019). All current RMG plants will undergo a comprehensive fire safety and structural examination, followed by remedial measures if necessary, according to the agency. “The Bangladeshi authorities are responding to these concerns and supporting the initiative,” the agency stated. There is also backing from Bangladeshi business and labor organizations and unions. Therefore, the government is taking steps to significantly strengthen its inspection system by equipping and training current and new factory inspectors and establishing oversight to address integrity and increase transparency. this. Workers, supervisors, and managers in the RMG sector will be trained in the prevention of workplace violence as part of this endeavor.
Track and trace techniques along the supply chain can be improved by investing in digitalized systems that can better monitor seasonal variation in production. There have been numerous initiatives by brands to track their supply chain, however, they are primarily concerned with controlling manufacturing and quality and protecting their Brands from unfavorable campaigns (Ahmed, 2019). Using the Extranet has allowed them to keep track of their products and avoid issues with bad branding, legal issues, and the like. Because of this traceability, customers must be made aware of where their items come from and how much of the retail price goes to those who make them, as well as the Bangladeshi garment workers who make them.
The role of HR in driving sustainability in such organizations
Textiles are a highly industrialized field, with numerous steps from raw materials and fibers to final products. To accomplish this, we’ve needed personnel that is both technically proficient and motivated. There are some minor variances in scope and approach in the HR concept for the textile industry because individuals here perceive and anticipate differently. Human resource management is all about finding and keeping the appropriate people at the right time and place with the correct compensation (Chong, 2020). Because placing sensitive workers in spinning production may result in numerous issues, textile HR management should assign highly skilled employees to the proper, appropriate, and correct locations where they can best demonstrate their abilities. In the textile industry, treating employees as assets is a legal requirement. By selecting the appropriate individual for the proper job, training him, and allowing him to grow, a simple human can become a valuable asset.
The textile sector has been through a rough patch, but today textile companies are focusing on general improvement to gain a foothold in the worldwide market. Many challenges, including greater productivity and production, infrastructure upgradation, social compliance, labor concerns, coordination, and customer relations, are still affecting the industry, and small-scale initiatives are being made to improve the current situation. Although many of these problems have been identified and remedies found, one essential part of human resource management, which includes the development of human resources, has been overlooked.
The strategies Primark have implemented to manage sustainability in their business functions
As a result, Primark has tightened up its program in Bangladesh for conducting structural examinations at the facilities from where it purchases its supplies. Ethical fashion and worker training are top priorities for Primark’s Ethical Trade Team, which currently includes more than 80 professionals (Nolan and Bott, 2018). “It is Primark’s Director of Ethical Trade & Environmental Sustainability Katharine Stewart’s job to keep a watch on the retailer’s nine primary sourcing locations, including China, India, and Bangladesh.” As part of its commitment to the Accord, Primark makes frequent trips to the factories where it produces its products, and it communicates routinely with all of the other companies from where it sources those products. Rana Plaza is only the beginning of Primark’s ethical and environmentally friendly endeavors.
To its competitors, such as H&M, Primark has kept its sustainable initiatives a secret, even though it has launched campaigns such as “Close the Loop” to raise awareness. It wasn’t all that long ago.
The role of the CEO of these brands/organizations in dealing with such a reputational crisis (Rana Plaza Collapse)
- Primark’s Ethical Trade team in Bangladesh worked with local partners to support emergency food assistance for 1,265 households, regardless of whether they had worked for Primark’s supplier New Wave Bottoms. One of Primark’s databases contains the names of everyone who were in the building at the time of the collapse and a 24-hour helpline is available to anyone in need.
- Some 3,621 people received short-term financial aid amounting to nine months’ pay. To make payments quickly and securely, the bKash mobile banking system was used (Alamgir and Alakavuklar, 2020). The Bangladeshi BRAC bank’s subsidiary, Bkash, a bank that specializes in small and medium-sized businesses, has partnered up with Primark to enable customers to open mobile bank accounts even if they don’t have a phone.
- Primark was one of the first international retailers to sign on to the Bangladesh Accord on Fire and Building Safety back in 2013.
- Primark reaffirmed its commitment to a new three-year deal in May 2018 by signing the 2018 Transition Accord in 2017.
Recommendations
- Unions and labor rights organizations in and outside of Bangladesh are pressing for a legally binding agreement on workplace safety. Brands’ promises to factory safety across their supplier chains would be legally enforceable and may be enforced in court, which is not possible under the national-level program set up last year to execute the Accord operations.
- Although Bangladesh has made significant progress in safety since the Accord agreement was signed in 2013, there is still a long way to go. Fire alarms have yet to be verified in more than 1,200 of Accord’s suppliers’ facilities, and in more than 900 of those facilities, no guaranteed safe exits exist in the event of an emergency. These data demonstrate that the Accord’s efforts cannot stagnate or slow down if it is to continue saving lives.
Conclusion
For Bangladesh’s garment workers, a long-term answer is to build a more complete corporate social responsibility concept that addresses challenges related to international outsourcing. Corporate clients of these garment factories should consider incorporating the goals and principles established by non-governmental organizations (NGOs), as one possible solution. These garment workers’ human rights might be included in a CSR plan based on principles.
Assignment Task 2
Introduction
Nike’s goal is to cut GHG emissions from its own and operated facilities by 70% by 2025 compared to 2005 levels. Towards this end, the fleet will be electrified and powered entirely by renewable sources of energy. GHG emissions from primary suppliers and transportation must also be kept below 2020 levels, independent of business expansion. Renewable energy, energy efficiency, and the utilization of alternative fuels will all go a long way toward accomplishing this goal (Sahami and Habibie, 2020). It is anticipated that by using 50% of its main materials in ecologically favored materials, the brand will save GHG emissions by 0.5 million metric tonnes.
The effects of global warming, resource scarcity, population growth, and loss of biodiversity on the footwear industry
Over 20 billion pairs of shoes are produced each year, making them an essential item of clothing for everyone on the planet. However, there is no such thing as too much of anything, and the shoe industry has numerous negative environmental effects that just cannot be overlooked anymore. The first and end phases of a shoe’s life cycle are crucial to the health of our planet since many toxins, chemicals, and fossil fuels are produced throughout the manufacturing process and released into the atmosphere (Almiya et al., 2020). Both wildlife and humans are being harmed by these toxins, which leads to a wide range of health issues. Additionally, the production of shoes adds to the already substantial effects of climate change and global warming by generating large amounts of carbon dioxide.
One of the most significant environmental repercussions of a shoe’s life cycle is its creation; surprisingly, most people believe that shoes only have an environmental influence when they are thrown away. There is a great deal of machinery and chemicals used to make shoes. When fossil fuels are burnt to power these gadgets, greenhouse gases are released into the atmosphere. Because it is so inexpensive compared to other energy sources, coal is frequently used to power these factories. Coal combustion releases carbon dioxide into the atmosphere, which contributes to the greenhouse effect and harms our planet’s ecosystem (Bubicz et al., 2021). There are more than 15 billion pairs of shoes made every year, and each shoe produces an average of 30 pounds of carbon dioxide. The shipping of shoes is another issue that is sometimes disregarded yet contributes to the generation of carbon dioxide. Because most shoe manufacturing businesses prefer to build their factories in developing countries for the low cost of labor, transportation is critical to the industry’s marketing. Ships, aircraft, and trucks are all necessary modes of transportation to get the items from the factories to the stores. There are a variety of chemicals used to extend the life span of leather and other natural materials like chlorinated phenols, tribromphenol, chlorinated paraffin, dimethyl fumarate, and so on. Discharge from factories can easily leak these chemicals into the environment and water (Sahami, 2020). If wild animals or plants ingest infected water or plants, they could be harmed by these poisons. To summarise, the production of shoes poses numerous environmental hazards due to the massive amounts of carbon dioxide emitted and the wide variety of chemicals employed.
There is a high demand for resources and goods in a society where the population is growing. This puts a strain on the environment. The primary sustainability concern of using resources without endangering the well-being of current and future generations, as well as the environment, has also grown in importance as a result of rising global consumption. It would take a lot of work to make the consumption patterns that are already in place and continue to evolve sustainably (Wadood et al., 2021). As a result, environmental methods that can be used to evaluate the environmental impact of items have arisen. It has been widely used since the 1970s to analyze product systems with desired boundaries, such as from production to waste management. Material and product flow analysis, for example, can be used in conjunction with this method to better evaluate the product flow.
Among the key products affected by this type of consumption are shoes, which can be used for LCA research as well. In recent years, the shoe industry has been concerned about the potentially dangerous substance in shoes. Customers, governments, and the industry are all concerned about the growing trend of outsourcing manufacturing to nations with subpar working conditions, health problems, and a lack of environmental regulations (Jiang, 2019). There are both positive and negative consequences to a higher salary and better financial prospects. People’s concern for the environment and environmentally friendly choices increases when their necessities are met and the economy is less constrained. There has been an increase in pressure on shoe industry stakeholders as a result of broader initiatives to be more ecologically friendly. The analysis of product and material flows allocated to the items could help enhance the environmental work of the shoe industry by using LCA methodologies to analyze the impacts of overall shoe consumption.
Challenges for sustainable development and recommendations
Environmentally friendly shoe design has its challenges, but designers and shoe manufacturers are rising to the challenge.
Leather is a hazardous landfill waste because of the toxic chemicals used in tanning. Volatile chemicals like benzene and toluene, which can be dangerous, can be present in glues used in manufacturing. Methane, a strong greenhouse gas, is released when biodegradable materials like leather and wood are composted in a landfill. At least one form of each of these elements can be found in a pair of sporting shoes (Zhao et al., 2019). Rahimifard and his colleagues have developed machines that shred old shoes and separate the various materials, but he admits that this isn’t an ideal option for recycling. This footwear is made with downcycled materials rather than recycled ones. It was much better when we first started,” he reflected on the situation.
A solution to this problem will require the involvement of designers. “The early conceptual stages of design have been found to account for up to three-quarters of the environmental impact of the finished items,” adds Leila Sheldrick, also of the Centre for Smart. In addition, they need to produce fashionable, eco-friendly shoes that attract purchasers,” he argues.
One designer, Aly Khalifa, is up to the task. Shoes created by LYF (Love Your Footprint) may be disassembled and reassembled multiple times without losing any of their original functionality or aesthetic appeal (Negishi, 2021). According to him, “glue raises reuse concerns.”As part of the company’s funding request to commercialize LYF sneakers, local assembly sites for the production of modular custom-fit shoes will be established.
Shoe waste is piling up at an alarming rate as a result of this. Customers would keep their old shoes for longer before tossing them out and buying new ones if the shoes are stylish and comfy. As far back as the 1990s, Nike has been repurposing worn sneakers into pellets for use in the construction of running tracks as part of its reuse-a-shoe program. The company has been hailed as a market leader.
Take-back boxes may not appear in more high-end shoe stores for another ten to twenty years if we’re serious about reducing the use of hazardous chemicals throughout the manufacturing process.
The influence of sustainability on production & design in the footwear industry
The environmental credentials of some prominent sports footwear businesses have recently been thoroughly examined – particularly the sustainability of the materials they employ and the grading of various materials according to their environmental impact. The primary goal of these in-house tools was to direct shoe designers to choose more environmentally friendly materials. A set of universal rules (in the form of an index) is being discussed and shared with other manufacturers to assist them to rank their products’ environmental impact. They must address three primary issues: ruthless exploitation; industrial pollution; and waste generated after consumption (Yadav and Veettil, 2021). The solution to the issue depends on the type of material used. Tanneries harm the environment, as do cotton and wool mills, which account for 20% of all industrial water pollution. In addition to providing raw materials for shoe manufacturing, these industries are notorious for their brutal labor practices. Around 700 million metric tonnes (almost 1.4 percent) of the world’s total emissions of greenhouse gases are attributed to the industry. Finally, an estimated 300 million pairs of shoes are discarded annually, and it could take hundreds of years for them to degrade in a landfill. Most shoes’ shock-absorbing component, ethylene-vinyl acetate, is estimated to take over a thousand years to decompose. In addition, shoes are difficult to recycle because of the manner they are put together.
A product’s environmental impact is influenced by a wide range of elements. In this situation, common criteria include low carbon footprint materials, environmentally friendly raw material extraction, minimal waste and pollution in production, equitable working conditions, durability, and recyclability of the final products. Until recently, most shoemakers relied on virgin plastic, rubber, and petroleum to make their products (Ruel et al., 2020). Because of the huge carbon footprints of these materials, they began looking for alternatives. Every material has its advantages and disadvantages, so organizations need to determine their priorities to come up with the best possible solution under the given circumstances. There has been an increase in the number of organizations developing solutions that align with their values. Recycled plastic waste, cotton, corn, castor bean oil, artificial leather, merino wool, sugarcane, recycled tires, algae, plants, and many others are among the materials they’ve experimented with. Returned shoes are repurposed into sports surfaces thanks to investments in take-back programs. Several groups distribute the unused shoes that have been returned to them (Ponte, 2020). By learning more about what they’re spending their money on, consumers have modified their purchasing habits. People are willing to pay more for environmentally friendly products, according to research. As a result, there has been a rise in the demand for products that are labeled as environmentally friendly, recyclable, or vegan. Such products are seen to tolerate and even accept a prolonged wait time. Having a positive response from customers encourages corporations to invest in a riskier and more expensive practice at the moment.
In light of recent studies warning of impending environmental catastrophes, everyone in society must take immediate action. Every person must act in a way that does not inflict greater harm (Creighton et al., 2022). It is our responsibility as consumers to support the push toward 100% sustainable manufacturing of consumer products. It’s critical to realize that the environmental impact will be enormous if everyone strives to have a carbon footprint that’s zero or negative.
Innovative business strategies that will help in addressing the sustainability challenges in Nike
Companies like Nike have made great strides to enhance their sustainability standards, as well as influencing legislation around the world to strengthen corporate sustainability practices. Mark Parker, Nike’s CEO, has had a major impact on the company’s approach to environmental stewardship (Cormack et al., 2021). In addition, the corporation has a long history of reducing its carbon footprint. Nike purchased their first carbon offsets in the year 2000. A total of 111,000 metric tonnes of carbon offsets have been purchased by the corporation since 2000. Biannual progress reports and third-party audits are required as part of this program (Pasisingi and Abdullah, 2018). Nike’s carbon reduction goals were met in 2005, and the company has since increased these efforts (Petronis and Valušytė, 2021). It shows Nike’s commitment to accountability and responsibility by participating in the WWF Climate Savers Program.” An example of this can be seen in the Corporate Responsibility Committee. Founded in 2001, it meets three times a year to discuss and revise company rules. Every board of directors meeting has Philip Knight, CEO Mark Parker, or both in attendance. In 2006, the corporation made significant improvements to its framework to ensure executive accountability and responsibility. Nike’s corporate social responsibility departments are overseen by the Vice President of Social Responsibility, who reports directly to CEO Mark Parker. Several new corporate responsibility goals, GHG reduction goals, and climate neutrality goals have been approved by Nike’s Directors’ Board of Directors since 2007.
Additionally, Nike has made a significant impact on legislation through its involvement in the political arena. Nike became the latest company to sign the Bali Communiqué, joining the likes of Sun Microsystems and Coca-Cola. In 2008, Ceres (Ceres) According to the climate change solutions proposed in the Bali Communiqué, the United Nations should establish a legally binding framework to address global warming. CEO Mark Parker noted, “Tackling climate change is a stimulus for growth and innovation,” on signing this communiqué. To bring about meaningful change, worldwide agreement and action are essential.” For the past two years, Parker has written letters to the leaders of Congress, encouraging them to take significant action on climate change (Pasisingi and Abdullah, 2018). Nike has sponsored the Focus the Nation program, which aims to open up a discourse between civic organizations, church organizations, and students, in an attempt to further the debate on climate change. Nike also became a member of the Climate group in 2008, which aims to speed up international efforts to combat climate change. BICEP’s mission is to advocate for effective climate and energy policy in the United States.
The impact of regulations &international codes on sustainability in the footwear industry
A large number of businesses are unaware of the true breadth and depth of their value chain’s business partners. Most companies can locate and track their immediate suppliers, but data about the suppliers of those suppliers are frequently lost (Jung and Kim, 2020). When it comes to implementing a common approach and trustworthy technology in a wide range of situations, it demands the cooperation of all industry partners. These issues have been studied and addressed by UN/ECE/CEFACT and other major industry stakeholders as part of an international framework drive to improve transparency and traceability in the clothing and footwear supply chain.
The project intends to establish a multi-stakeholder policy platform, generate policy recommendations, traceability standards, and implementation guidelines, build capacity and execute pilots on the project deliverables throughout the 2019-2022 time frame.
For this reason, UNECE has created “The Sustainability Pledge,” a call to action inviting governments, apparel and footwear manufacturers, and other industry stakeholders to commit to implementing our set of tools and taking concrete steps to improve the industry’s environmental and ethical credentials (Nawaz and Koç, 2018).
Influence the management to adopt the regulations and codes in Nike
Nike is a sportswear manufacturer that sells its products both directly to consumers and through third-party retailers. As a result of Nike’s reliance on a wide range of raw materials and chemical components, the company faces two distinct threats from climate change:
- Due to natural disasters or changes in weather patterns, raw material shortages and price rises
- Manufacturing, distribution, and retail all rely heavily on electricity and water. The price of energy and gasoline will rise or fall as a result of regulations on greenhouse gas emissions and droughts, which could affect the supply or cost of these inputs. Large corporations like Nike, meantime, are coming under increased public and government pressure to reduce their environmental effect and improve their sustainability.
- A lot has happened in this area in the last few years. Nike was lauded for going above and above in supporting sustainable production and conserving the environment when “PlanetSave” branded it “the greenest soccer sneaker around” in 2013 (Fritz and Cordova, 2021). Nike has laid out a specific plan for the year 2020, complete with specific objectives. When it comes to reducing the company’s environmental footprint, for example, Nike is adopting the following initiatives.
- Scoring products for environmental effects help create and iterate products in a more environmentally friendly manner.
- More efficient design and manufacturing processes like reusing junk to make new items can help reduce waste in the production of new products.
The importance of sustainability reporting by critically discussing the sustainability report of Nike
Global emissions of greenhouse gases must be reduced by 50 percent to avoid serious consequences, according to a 2008 World Wildlife Fund Tokyo declaration. This proclamation is also signed by Nike. Significant signatories to this declaration include Sony and Nokia as well. Oregon Governor’s Climate Change Integration Group is located in the company’s Beaverton, Ore. headquarters and serves as a hub for Nike’s environmental efforts in the United States (Ditlev-Simonsen, 2022). In addition, Nike has appeared twice before the US House of Representatives Select Committee on Global Warming and Energy Independence, both times as a witness in the hearings. In 2008, Ceres (Ceres) Over 97% of Nike shoe manufacturing takes place outside the United States. Despite this, Nike has testified in favor of tighter laws in the United States. 10k Form of Nike Inc., 2010 As a result, cap-and-tax legislation would not affect Nike, providing them an advantage against indigenous US shoe manufacturers.
Nike has made major internal adjustments in addition to its numerous efforts to impact change through law and international agreements. An annual report on Nike’s sustainability activities, targets, and results is published by the corporation. It was in 2007 that Nike launched the “Considered Index,” a supplement to the CRS reports. To better understand Nike’s use of materials, the company has developed this index. According to the Considered Index, Nike sneakers are evaluated and rated based on variables such as waste and solvent usage (Nath and Agrawal, 2020). A Climate Café at Nike’s corporate headquarters is one example of the company’s efforts to reduce carbon emissions from its workforce. To encourage staff to share and discuss ideas for reducing emissions, the company launched an online forum in 2008. Another program that encourages innovation and efficiency by pitting corporate facilities against one another is the Nike Energy Challenge. Through enhanced efficiency, Nike is also aiming to reduce its energy use and clean up the energy source used in its operations.
Conclusion
Nike’s goal is to use only renewable energy in all of its sites by 2025. In these locations, the corporation only plans to use 48 percent renewable energy by 2020. In addition, the corporation aims to minimize energy consumption in critical processes by 25%. This percentage presently stands at 5.62 percent. Nike also encourages its employees to use alternative modes of transportation, such as electric vehicle charging stations and virtual meetings, to reduce the company’s carbon footprint. This includes Nike’s corporate air travel emissions, which are completely offset. To boost production efficiency, factory audits are being conducted by the corporation.
References
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