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Factory Investments Earn Inditex No. 4 Spot on Fortune List of Companies Changing the World

Spanish fast-fashion giant Inditex landed the No. 4 spot on Fortune’s inaugural Change the World list, honored for its factory investments and efforts to improve worker well-being.

Fortune’s Change the World list focuses largely on companies with annual revenue of $1 billion or greater, honoring enterprises that have made social impact integral to their core business. Of the four criteria considered, Fortune said the “reach, nature, and durability of the company’s impact on one or more specific societal problems” garnered the greatest weight. It also evaluated how innovative the initiative is in comparison to similar efforts in the industry; how central it is to core strategy; and the results it generates, with a focuses on profits and shareholder returns versus “greenwashing” or a boost to corporate reputation.

Unlike many apparel players, and fast-fashion companies in particular, Inditex produces much of its quick-turn, on-trend items in factories across Spain, Portugal and Turkey, rather than in China and other Asian manufacturing facilities. The company has also prioritized vendors who boast a “stronger safety record.”

“Last year, 95 percent of its products were made at those better factories, up from 80 percent in 2012 and well above industry averages,” Fortune said.

Inditex also got a nod for training its heavily female factory workforce on how to recognize gender discrimination, with Fortune noting that social responsibility has been good for the bottom line: the company’s profits have grown 7 percent annually since 2012.

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With an eye to the environment, Inditex has instituted a plan that will no longer see hazardous chemicals released during manufacturing and from products by 2020, and an environmentally friendly store model is designed to slash emissions by 30 percent and water consumption by half.

Notably, Harvard Business Review deemed Inditex CEO Pablo Isla the world’s best-performing CEO last year.

Following in the No. 5 spot on the Fortune list, Alibaba earned high marks for its work in helping to distribute a bit of urban wealth into less well-off rural villages. Earlier this year, the company’s AutoNavi mapping application introduced a “poverty-alleviation map” beta for Henan province—“best known as the home of the Shaolin Temple and the birthplace of kung fu,” Alibaba said through its news service. Users of the new map features will find information on the facilities and amenities, such as gas stations, eateries, restrooms and scenic attractions available in far-flung towns, offering peace of mind to daytrippers.

“[We want to] encourage more users to participate in poverty-alleviation efforts in the form of tourism, while helping impoverished areas grow economically,” AutoNavi president Liu Zhenfei said in a March statement.

Walmart (No. 16) is working with suppliers to switch to packaging made with recycled materials and to incorporate more renewable energy into their businesses, in an effort to rid their operations of 1 billion tons of emissions by 2030.

Meanwhile, a disconnect remains between the companies that work hard to make measurable impacts for the greater good and those that have managed to secure consumer mindshare as behaving ethically, even if that isn’t backed up by concrete evidence.

Technology and data firm Morning Consult polled 6,600 consumers to learn which brands they think of as the “most ethical.” A trio of America’s biggest retailers—Walmart, Amazon and Target—grabbed the top three spots, respectively. Walmart earned 699 mentions, followed by Amazon with 405 and Target with 301.