Norway Wealth Fund Backs Nike Shareholder Proposal on Workers’ Rights, According to Reuters

By Helen Reid and Louise Rasmussen

COPENHAGEN/LONDON – Norway’s wealth fund is supporting a proposal that urges Nike to evaluate whether binding agreements with workers could enhance its capability to tackle human rights concerns in high-risk sourcing countries, as announced on Thursday.

As Nike prepares for its annual shareholders’ meeting next Tuesday, the backing from the $1.7 trillion fund, which is Nike’s ninth-largest shareholder, gives a strong boost to the proposal, highlighting that Nike is falling behind its competitors.

For example, brands like Adidas and Puma have signed the Pakistan Accord, which is a legally binding contract between brands and labor unions.

Nike has advised investors to vote against the proposal put forth by Domini Impact Equity Fund. The sportswear company, currently facing declining sales, is under pressure from investors regarding several matters, including two proposals related to its supply chain practices and another concerning its climate objectives.

Last year, Domini was part of a group of over 60 investors who sent a joint letter to Nike, asking the company to pay $2.2 million in allegedly unpaid wages to more than 4,000 garment workers at two suppliers in Cambodia and Thailand. Labor rights groups have claimed that these workers lost wages due to factory shutdowns during the COVID-19 pandemic, a claim that Nike has denied.

As of June 30, Norway’s wealth fund held 0.92% of Nike’s shares, a stake valued at approximately $1.05 billion, according to fund data.

The fund emphasized that the board must consider significant sustainability risks that the company faces and the wider environmental and social implications of its operations and products. It also voiced concerns over excessive executive compensation, particularly at U.S. firms, and reiterated its stance of opposing Nike executives’ pay, a position it has maintained since 2020.

However, the fund chose not to support a shareholder proposal from Tulipshare which seeks to evaluate the effectiveness of Nike’s supply chain policies in protecting workers’ rights. This proposal, resubmitted for a second time, received 11.7% of the votes at last year’s meeting.

In the domain of climate targets, the Norwegian fund expressed its support for a proposal that calls for Nike to reevaluate its sustainability strategy after the company failed to meet its previously set climate goals. This proposal, initiated by Trium Capital, requests Nike to publish an analysis within a year regarding its inability to achieve its self-imposed targets for the period of 2015-2020.

Trium Capital has expressed disappointment with Nike’s performance and commitment. Proxy advisory firms Glass Lewis and ISS have also advised shareholders to support the proposal, with ISS commenting that the company has missed and restated multiple targets without sufficient discussion on how oversight would improve moving forward.