Shareholder activist group Tulipshare has called on sportswear brand Nike to respond to concerns over forced labor and supply chain issue claims.
Tulipshare is a shareholder activist investment platform that offers online brokerage to support its corporate campaigns. It is also a long-term shareholder in the $184 bn sportswear giant.
In a letter to the board of directors at Nike, the activist group says it is writing to express ‘grave concern’ about the company’s IR team’s ‘unresponsiveness’ to outreach attempts. The concerns surround Nike’s efforts to eradicate alleged forced labor in its business operations and throughout its value chains.
‘We first reached out to Nike’s IR team via email on March 4 and October 21, 2022, as well as on January 27, 2023, but Tulipshare has not received a single response,’ the letter notes.
‘The company’s unresponsiveness demonstrates that Nike is willingly ignoring shareholders on issues concerning forced labor – a particularly salient risk within business operations and supply chains of apparel and footwear sector companies.’
Lack of transparency
The shareholder activist group acknowledges that Nike has committed to make ‘some changes’ to improve its labor supply chain but it remains concerned by the ‘lack of transparency’ relating to Nike’s disclosures on whether the company is on track to meet its targets.
‘We are also gravely concerned that Nike lacks an adequate remediation process for aggrieved supply-chain workers, which could lead to human rights violations, such as wage theft,’ it writes.
To combat rising shareholder concerns, Tulipshare recommends incorporating the American Bar Association’s model contract clauses into the company’s supplier contracts. These would ensure Nike meets its due diligence requirements to engage in responsible purchasing practices, protect workers’ right to freedom of association and integrate ‘proper’ remedies into supplier contracts.
‘Nike’s lack of transparency and engagement with shareholders exacerbates the potential of human rights abuses occurring in the company’s supply chain,’ the letter adds.
‘We call on Nike to actively engage and collaborate with investors and stakeholders in identifying, assessing and avoiding actual or potential human rights abuses that may significantly disrupt the company’s business, competitive advantage and the livelihoods of many workers.’
Nike has been approached for comment.