Corporate Social Responsibility – Why Nike and Others Are Re-Using, Recycling and Refurbishing Products for Sale
- May 6, 2021
- Travis Epp
Corporate social responsibility (“CSR”) and its flipside—environmental, social and governance (“ESG”) practices—stand to be some of the most defining criteria for businesses since the introduction of quality standards. Any business seeking investors, wishing to sell, wanting to attract young and talented team members, or looking to improve its standing in the eyes of customers will need to pay close attention to the array of practices that make up this way of doing business.
There are a number of reasons that this has become important, and there are certainly plenty of opportunities and impacts for U.S. manufacturers. First, growth stands behind much of the enthusiasm for adopting highly visible social or environmental practices. Investors are loudly and proudly stating their commitment to sustainable and earth-friendly policies and practices along with demonstrating this through their investment practices. Customers are demanding to know what businesses are doing to shrink their environmental footprint and build a brand around practices that strive to be environmentally friendly or socially responsible and that are also good for the bottom line. In fact, companies that don’t have practices in place or plans to do so may well be left behind as this movement continues to grow and gain momentum.
And those younger customers who are making these demands are also the same people who will be the workforce of the future. If companies want to attract great talent, they need to be prepared to speak to their CSR practices and be able to monitor and measure their impact using acceptable ESG standards.
Why might this be important for U.S. manufacturers? To ensure a company is a leader of this consumer and investor groundswell, manufacturers need to be prepared to address the environmental and social impacts of their operating processes. It will be important to answer questions such as:
- How does your production impact your local environment, including waterways, air and soil quality?
- Where do the components for your products come from and how are they produced before they become part of your visible supply chain? Are they produced in a way that is socially and environmentally responsible?
- How do you treat your employees? Do you encourage both diversity and inclusion? Do you provide training in accordance with your values that supports a fair, equitable and inclusive organizational culture?
- What methods do you use to verify and track your practices, progress and impacts?
As more companies, like NIKE with its “Move to Zero” program, seek to establish a clear brand associated with CSR, they will be actively seeking to work with partners, distributors, manufacturers and other stakeholders to support their brand rather than potentially damage or detract from their goals. Any manufacturing entity interested in competing in this rapidly growing market needs to act now.
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Travis Epp is EisnerAmper’s Partner-in-Charge of the Manufacturing and Distribution Group, with nearly 30 years of experience in public practice and private industry. Travis focuses on private companies in the middle market.
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