Within a few weeks of the start of the war in Ukraine in February, Nike announced they would be temporarily suspending their operations in Russia.
Now a new report says they’ll be making that suspension permanent.
According to Reuters however, Nike gets less than 1% of its revenue from Russia and Ukraine, meaning the decision will have virtually zero financial impact to their bottom line.
The timing might also benefit Nike, as Russia is threatening to pass new legislation that would allow the government to seize the assets of foreign companies:
Foreign companies seeking to exit Russia over the war in Ukraine face the prospect of new laws being passed in the coming weeks allowing Moscow to seize assets and impose criminal penalties. That has encouraged some businesses to accelerate their departure.
Based on these factors, it’s likely that the strongest motivation for making this announcement is to signal their political virtue. The Reuters report made a point to connect this decision to previous Nike support for “social justice”:
The company has a history of taking a stand on social and political issues. It supported American football quarterback Colin Kaepernick in his decision to kneel during the U.S. national anthem as a protest against racism and dropped Brazilian soccer star Neymar last year because he refused to cooperate in an investigation into sexual assault allegations.
Of course, nowhere in that list of politically correct decisions is there a mention of Nike suspending operations in China due to the country’s genocide against the minority Uyghur population.
Nike is more than happy to make symbolic, politically popular decisions when there’s little to no impact on their financial situation.
But Nike has repeatedly stated they are a “brand of China and for China,” so it’s unsurprising that they have no intention of taking a stand against the country’s human rights abuses.
The move to exit Russia may or may not be the correct decision, but it’s yet another example of the modern corporate trend of making empty symbolic gestures while ignoring issues in locations that might have a significant financial impact on their business.
Disney, for example, has made its commitment to the “correct” ideology plain with recent statements opposing Florida’s Parental Rights in Education bill and forcing “woke” signaling into “Lightyear.”
However, Disney had no problem filming “Mulan” in China and thanking them in the credits.
Similarly, China is central to Nike’s business model, allowing them to achieve higher profit margins with cheap labor. So they remain silent about China’s abuses.
Russia is not a priority, so Nike can take an easy political win by leaving the country.
Corporate hypocrisy is not new, but Nike is once again taking it a whole new level.