L'Oréal, Ford among most ethical companies

23 March 2010

NEW YORK: L'Oréal, Ford and General Mills are among the "world's most ethical companies", according to a report published by the Ethisphere Institute.

The think tank assessed over 3,000 organisations in all, and based its findings on a range of metrics, such as corporate citizenship and governance, innovation and broader "industry leadership".

Ethisphere's study was limited to businesses with annual revenues of at least $50 million (€36.9m; £33.2m) and a minimum of 100 employees, and balanced survey responses from these firms with its own analysis.

Henkel, the German home-and-personal care group, and Kao, a Japanese operator involved in similar activities, were two brand owners that performed well in the consumer products market.

L'Oréal, the French cosmetics giant, and Mattel, the US toy manufacturer, were the other highly-regarded players in this sector.

In the food and beverage segment, Campbell Soup made the list for the first time, joining General Mills, PepsiCo and Solae, all of which are headquartered in the US.

Google, the search engine, and Zappos, the online retailer, represented the internet specialists, with Thomson Reuters and Time Warner adopting this status among media owners.

T-Mobile and Vodafone were the pre-eminent telecoms networks, with Ricoh and Xerox named as the top-ranked members for consumer electronics.

"Shareholders are much more activist. People are much more tuned in to what's going on behind the curtain. Building the public's trust is critical," Patricia Nazemetz, chief ethics officer of Xerox, argued.

Turning to apparel, Comme il Faut, the fashion chain, Nike, the sports brand, and Patagonia, the outdoor clothing firm, all received plaudits, as did the retailers Best Buy, Gap, Ikea and Target.

Cummins, the parts provider, and Johnson Controls, which focuses on interiors, joined Ford among the automakers credited with exhibiting ethical trading practices.

"Part of being ethical is looking at your own reality with clear vision," David Leitch, the chief counsel at Ford, argued.

"It's being honest with yourself and your peers in the company ... having a real vision of our own reality and not fooling ourselves."

General Electric, the energy-to-media conglomerate, was also recognised by Ethisphere, and has placed a particular emphasis on ensuring its ethical credentials apply on the international level.

"What you try to do is have some leadership resources in places that are challenging early on," said Brackett Denniston, general counsel at GE.

"We hired a lawyer in Vietnam before we really had much business in Vietnam, because it's a tough culture."

Overall, 26 companies made their debut in the annual standings, while 24 dropped out, due to "litigation and ethics violations", or because of "increased competition from within their industry".

Newcomers included Adobe, the software developer, Noblis, the consultancy, and Whole Foods, the organic grocery store chain.

By contrast, Dell, the computer hardware supplier, HSBC, the bank, McDonald's, the fast-food firm, and Toyota, the carmaker, all failed to make this cohort after successfully doing so in 2009.

"The issue of ethics, reputational risk, is now in the board room," Alex Brigham, the executive director of Ethisphere, concluded.

"That just didn't exist a couple of years ago. Boards of directors have started really caring about this."

Data sourced from Ethisphere/Reuters; additional content by Warc staff