Nike has done well to settle with the environmental campaigner Marc Kasky. Having taken its case to the highest court in the land, and not getting the outcome it had hoped, the footwear and clothing giant faced the prospect of being pitted against a sole environmental campaigner in further prolonged litigation. As McDonald’s found out to its cost in the McLibel case, in reputational terms a corporate Goliath always ends up worse off than a campaigning David, regardless of who eventually wins in court.
At just under a third of one per cent of company net profits, $1.5million (£900,000) is a relatively small price to put the case behind it, although this figure excludes the legal costs (no one is saying who will pick up the bill for Kasky’s lawyers). To sweeten the pill, Nike will pay the money to the Fair Labor Association, which will use it to improve the social and environmental performance of suppliers, including Nike's. Given that Nike was a founding member of the association, which seeks to improve factory working conditions, and is represented on its board, the money is at least mending fences close to home.
But what are other social reporters to make of all this? First, that reporting can carry legal and reputational risks at least equal to the risks of not disclosing sensitive information. Second, that social reporting is not a branch of public relations. It is easy to forget that before Nike’s high-minded appeal to the US Supreme Court, the Kasky lawsuit related to a public relations campaign by the company that involved press releases and letters to college principals and newspapers – not Nike’s social report. Social reporters should first and foremost concern themselves with establishing the facts, and only then consider presentation. The large number of glossy reports lacking even basic social and environmental data shows how many companies fail to make this basic distinction.
Third, the value of verification. All reporters can sleep better at night if an independent third party is also staking its reputation on the accuracy of the content – and any omissions that subsequently come to light will be more excusable.