Nike, Patagonia and Zappos made Ethisphere Institute’s list of the 100 most ethical companies in the world for 2010.
The New York-based think tank’s fourth annual list of the World’s Most Ethical Companies consists of companies with at least 100 employees and greater than $50 million in annual revenue. The companies are not ranked, but must meet certain criteria to make the list.
Nike and Patagonia as well as Israel’s Comme Il Faut were the only three companies in the Apparel category. Zappos was joined by Google as the only two in the Internet category. In the Specialty Retail category, those making the ranking were Best Buy, Gap, IKEA, Target and Ten Thousand Villages.
Three thousand companies were nominated (or nominated themselves). To be considered, each had to fill out a self-evaluation with items like, “Please describe your organization’s projects and initiatives aimed at workforce sustainability and well-being”
Ethisphere assigned scores in seven different categories: Integrity, Track Records & Reputation (20%); Innovation that contributes to the public well-being (15%); Internal System and Ethics/Compliance Program (15%); Industry Leadership (5%); Corporate Citizenship and Responsibility (20%); Corporate Governance (10%); Executive leadership and tone from the top (15%). After the list was whittled down to about 200, each company was cross-checked against governance lists from GovernanceMetrics International, FTSE for Good and other organizations. Any company with significant legal trouble over the past five years was then disqualified, as were companies whose main business was alcohol, tobacco or firearms.
The 100 companies that made the final cut include first-time recipients Ford Motor Company, Adobe Systems and Campbell Soup. Google, Starbucks, General Electric and 33 other companies have appeared on the list for all four of its years. Twenty-four companies that made the list last year failed to make the cut this year, including embattled Japanese car maker Toyota, which had to recall 8.5 million cars in the last year due to sudden acceleration problems.
Ethisphere says the companies on this year’s list are not only ethical, but successful. They have all delivered a 53% return to shareholders since 2005, significantly higher than the S&P, which has been down 4% in the same period.