Nike Inc., once a principal target of activists protesting the use of sweatshop labor, has been pardoned by investment firms that screen companies for their social and environmental records.
The Bethesda-based Calvert Group mutual fund company announced yesterday that Nike now meets its standards for being a good corporate citizen. KLD Research & Analytics Inc., a Boston firm that provides research to institutional investors, also determined earlier this summer that Nike has become an acceptable investment for the socially conscious.
"Nike has been making progress for years, partly because shareholders and activists have spent years yelling at them. They've been a very controversial company," said Julie Fox Gorte, director of social research at Calvert Group. "At this point, we feel as though this company has turned the corner."
A stamp of approval from the social investment community would mark a turnaround for Nike, which along with Wal-Mart Stores Inc., Gap Inc. and other companies took a public relations bruising during the 1990s over labor practices at overseas apparel factories. The maelstrom of criticism reached a fever pitch when activists revealed that TV personality Kathie Lee Gifford's clothing line for Wal-Mart was produced in a Honduran sweatshop. Gifford became an outspoken critic of child labor.
Overcoming such a backlash isn't easy, said Donald Lichtenstein, a marketing professor for the Leeds School of Business at the University of Colorado at Boulder. "Once you've been labeled as an offender, then consumers many times interpret any subsequent actions as not motivated by a pure desire for corporate social responsibility but a public relations stunt."
The social investors' endorsements of Nike come as the anti-sweatshop movement wanes. Even as activists held a press conference in New York yesterday to denounce poor worker conditions at a Chinese factory that prints books for the Walt Disney Co., its organizer conceded that agitating over the issue has slowed compared to a decade ago.
"People are so concerned with so many other issues, the war in Iraq and Afghanistan, the loss of manufacturing jobs overseas, and preserving Social Security," said Charles Kernaghan of the National Labor Committee, a labor-rights watchdog that uncovered the use of sweatshops by the fashion lines of Gifford and rapper Sean "P. Diddy" Combs. "People who would gravitate to our movement are just overwhelmed."
