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Companies spend quite a bit of money on employer branding and employer brand agencies do their very best to justify why they are wise to do so.
The process of researching and building an employee value proposition to create recruitment marketing that attracts candidates who are the best possible fit can be months in the making.
So, when an organization commits an act of self-sabotage, it can be extremely detrimental, not to mention expensive, to that brand.
Nike has found itself in the dock with NGOs and activists questioning its supply chain relationship with Daewoo International, a company accused of profiting from slave labor in Uzbekistan’s cotton industry.
Perhaps they interpreted employer branding using a more 19th century definition?
While the reputational risk to the global apparel giant is clear, the consequences for its ongoing recruitment efforts and workforce engagement may prove difficult to navigate. Not to mention how consumers feel about it.
Employer brand at risk from forced-labor exposure
Over 130 apparel companies (including Nike) have taken a stand against forced labour in Uzbekistan, by pledging not to buy Uzbek cotton. Despite this, Anti-Slavery International says Nike is refusing to cut ties with one of the major companies profiting from the forced labour in the Uzbek cotton industry.
Daewoo International, the largest processor of cotton in Uzbekistan, is one of only a handful of companies that have defied an international call to stop using Uzbek cotton harvested using forced labour.
Nike, which sources synthetics from Daewoo, is refusing to end its relationship with the firm in spite of the fact that several other companies, including H&M, C&A, and Michael Kors, have moved to cut ties with Daewoo because they say it profits from slavery.
The ongoing relationship has prompted a backlash from civil society groups. An open letter to Nike signed by Uzbek human rights activists, political leaders, and prominent dissidents calls on it to stop doing business with Daewoo.
Quite apart from the obvious and over-riding concern it should have for the victims of slavery, it presents an uncomfortable challenge for Nike in how to preserve internal trust and talent attraction while external pressure and criticism intensifies.
For values-driven candidates and employees, especially Gen Z and millennial professionals who are increasingly motivated by ethical concerns, anything less than dropping Daewoo completely could torch its employer reputation.
Call for accountability
While public-facing sustainability and compliance teams have traditionally handled supply chain issues, the growing emphasis on ESG performance across corporate functions brings HR departments closer to those debates.
The Cotton Campaign, a coalition of organisations working together to end forced labour in the Uzbek cotton industry of which Anti-Slavery International is a member, is calling upon Nike to stop doing business with Daewoo and implement the Daewoo Protocol - a series of steps the company needs to take to eliminate Uzbek cotton from its supply chain.
Joanna Ewart-James, Supply Chain Programme Co-ordinator at Anti-Slavery International said: “This is an opportunity for Nike to do the right thing and end its association with a company that continues to process around 20 per cent of Uzbekistan’s cotton output despite the industry’s heavy reliance on state-sponsored forced labour.
“All companies have a responsibility to undertake due diligence in their supply chains to ensure that they are not complicit in human rights violations such as modern-day slavery.”
Internal pressure looms as external condemnation grows
In an era of employee activism and rising expectations around DEI and ethics, Nike’s internal stakeholders may add pressure to the company’s existing external challenges. The potential for reputational fallout grew significantly after the death of 18-year-old Navruz Muyzinov, who was beaten by police officers in Shahrisabz, Uzbekistan when he left his assigned cotton field before meeting his quota.
Such awful accounts are not easily contained by corporate messaging, and HR departments must prepare for internal scrutiny, particularly from ERGs, DEI groups and sustainability-linked functions.
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Umida Niyazova, founder of the Uzbek-German Forum for Human Rights, another member of the Cotton Campaign, said: “Nike would apparently rather harbour companies in its supply chain that are profiting from human rights violations than help bring an end to Uzbekistan’s heinous forced labour system.”
In the face of such messaging, employer brand teams and HR communicators may struggle to defend the company’s ethical credibility.
Nike response focuses on traceability
Nike’s corporate response points to the complexity of global supply chains and a commitment to improving transparency. Balancing reputational risk with logistical reality.
The firm said: “Nike takes very seriously reports of widespread use of forced child labor in Uzbekistan cotton production. We do not knowingly source cotton from Uzbekistan.”
It promised to increase traceability in its supply chain and eliminate Uzbek cotton while working with other stakeholders to help clean up theirs and everyone else’s act.
The damage may already be done and the question is whether that strategy goes far enough to protect Nike’s employer value proposition, or if more direct action is required to re-establish trust among current and future employees.
