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When Nike’s shareholders convene in a virtual meeting room on Tuesday, they will hear from dissatisfied investors who hope to shift the company’s approach to climate change, gender equity and labor rights using one of the only tools they have: transparency.
They’re offering a record number of proposals to make the company investigate the problems they perceive and report the results publicly.
But if history is any guide, none of the investors’ proposals will pass.
Every one of the 18 Nike shareholder proposals to reach a vote since at least 1996 has been rejected, according to news archives and securities filings reviewed by ProPublica and The Oregonian/OregonLive. As in past meetings, Nike’s board of directors — the majority of whom are selected by a holding company for co-founder Phil Knight’s stock — opposes this year’s measures.
The demands being made of Nike come from investment funds whose customers wish to back companies that deliver on corporate responsibility, an effort sometimes labeled “environmental, social and governance,” or ESG. Their uphill fight at annual meetings reveals limitations to the influence of shareholder activism on corporate policy.
Among the five proposals that Nike investors will decide on are those asking the world’s largest athletic apparel brand to explain its failure to cut carbon emissions and to evaluate ways to improve working conditions in its supply chain.
Lisa Hayles of Trillium Asset Management, a Boston-based sustainable investing firm that owned $11.7 million in Nike stock as of June 30, said Trillium and others have been “stonewalled” by Nike on questions about labor rights, including allegations that two of its suppliers owe $2.2 million in unpaid wages at two Asian factories shuttered during the pandemic. Nike has said it’s found no evidence to support the allegations.
Hayles said she also wants to know why the company eliminated 20% of its employees working full time on sustainability. The layoffs, first reported by The Oregonian/OregonLive and ProPublica, were part of a broader cost-saving effort but went deeper than cuts of 2% companywide and 7% at Nike’s Oregon headquarters.
“It’s very disappointing to see this lack of response, lack of engagement from the company, coupled with what we know about the layoffs and restructuring of the staff working on sustainability,” she said. “It calls into question: What is the company’s commitment?”
The proposals mainly aim to change Nike’s response to climate change and its handling of women’s and workers’ rights. They also include one from a conservative think tank challenging the company’s support of LGBTQ+ organizations.
Nike declined an interview request. The company said in a statement: “We greatly value the opportunity to engage with and solicit feedback from our shareholders, and we believe that maintaining an open dialogue strengthens our approach to corporate governance practices and disclosures.” The company said it did not engage with the conservative think tank.
The company’s annual meetings are required by law and play out with scripted precision. Investors elect Nike’s board and have a chance to submit questions to top executives. But they aren’t handed a microphone by someone passing through the audience. Unlike meetings of Warren Buffett’s Berkshire Hathaway, which draw thousands of people to Omaha, Nebraska, Nike’s meetings are virtual and succinct. Last year’s finished in under 41 minutes.
The activists have to make their case quickly. A two-minute, 58-second audio clip by one activist shareholder group in 2023 appeared to have been edited to remove pauses between sentences. It finished playing just seconds before the polls closed for shareholder voting.
An individual or investment group needs to own only $25,000 in company stock to file a shareholder proposal. For longer-term shareholders, that threshold drops to $2,000, which is roughly 25 shares of Nike. The company is worth about $120 billion.
Investors possess few other ways to force changes at publicly traded companies. The federal Securities and Exchange Commission does not permit investors to micromanage. They can’t require a company to pay men and women the same. But they can try to compel it to say whether it does. Even when investor-led proposals don’t advance, activists say, a public airing of concerns can sometimes spark impact.
In 2018, after The Wall Street Journal and others reported on allegations about a boys’ club culture at Nike, representatives of Trillium asked the company to set diversity goals. Trillium withdrew the proposal after Nike committed to engaging and subsequently announced additional plans to increase the representation of women in its global workforce. (The company faces a sweeping lawsuit, filed in the wake of the 2018 news coverage, from female employees alleging gender discrimination; the company has denied the allegations in court filings.)
Trium Sustainable Innovators, a London-based fund, is behind the proposal asking Nike to explain its record on climate change. The investors want Nike to study and report on why it missed many of its 2020 climate targets and subsequently abandoned some of the metrics. Nike hasn’t seen its emissions budge in the past decade, despite promises to sharply reduce them.
Pointing to Nike statements that consumer preference and marketplace demand drove the 2020 misses, Trium’s proposal says Nike appears “to absolve itself of responsibility” and could have influenced demand through pricing, supply volume and product visibility.
“They will need to pay for carbon emissions one way or another,” Raphael Pitoun, a Trium portfolio manager, said in an interview. “Being so slow in carbon transition is a mistake.”
Pitoun did not specify how much Nike stock Trium owns but put the investment fund’s stake at “a few million dollars.”
Trium wrote three letters to Nike in 2023, then filed the shareholder proposal after the investors said they did not get answers to their questions, including on a call with Nike. Pitoun described the shareholder proposal as the last step in a two-year escalation process.
Nike, for its part, said the report Trium wants would be duplicative, writing in a securities filing that while it is now working toward achieving its 2025 targets, it is “also striving to do more.”
Two groups that advise institutional investors on how to vote on shareholder proposals, Glass Lewis and Institutional Shareholder Services, recommended approving the climate proposal. ISS also recommended a yes vote on a proposed study of gender- and race-based pay gaps at Nike.
The climate proposal and the Trillium labor proposal also got a boost on Thursday after Reuters reported that Norway’s sovereign wealth fund, which owns a $1.05 billion Nike stake, is backing them. The fund is Nike’s ninth-largest investor, according to the report.
While proposals like the ones facing Nike this month have grown more common in American business, they continue to face long odds, said Douglas Chia, president of Soundboard Governance and a former corporate secretary of Johnson & Johnson.
Chia, who also teaches at Rutgers Law School, said of Nike: “Companies where founders, someone like a Phil Knight, own a huge chunk, it’s very difficult.”
