Gap Inc. and Levi Strauss & Co. are the only U.S. apparel corporations named on the Ethisphere Institute’s ninth annual list of the World’s Most Ethical Companies. The New York-based research firm, known for its teaching of appropriate corporate conduct, yesterday released its 2015 honorees, recognizing 132 organizations in more than 50 categories that it believes foster a culture of ethics and transparency at every level.
Gap is one of only 15 companies to have been honored every year since the list’s inception. The company, whose brands include Gap, Old Navy, Banana Republic, Athleta and Intermix, has issued social responsibility reports since 2004, when it admitted to widespread problems in the thousands of factories it uses around the world to produce clothing for its retail chains.
Fast-forward to the present, Gap became the first U.S. apparel retailer to raise its minimum hourly wage to $10 this year, donated more than 500,000 volunteer hours in 2013 and has committed more than 25,000 jobs to women’s career advancement since 2007. “Earning this recognition involves the collection action of a global workforce from the top down,” said Ethisphere CEO Timothy Erblich.
A second-time honoree, Levi’s has been a pioneering company in ethical and labor standards since 1991, upholding strict worker regulations, including laws against excessive overtime, discrimination and prison labor. In addition, the company’s Terms of Engagement includes mandated community involvement and safe dormitories for branches that offer worker housing.
To bolster its ethical credentials, Levi’s last November announced it would begin providing lower-cost working capital to those of its 550 suppliers that best meet its environmental, labor and safety standards. As suppliers improve their environmental performance and conditions for employees, they will be rewarded with lower interest rates on working capital provided through the World Bank’s private sector arm, the International Finance Corporation.
Only companies who submit an application to the Ethisphere are considered for inclusion and scores are generated in five key categories: ethics and compliance program, corporate citizenship and responsibility, culture of ethics, governance and leadership, innovation and reputation.
“Companies today are challenged by a complex and often conflicting set of rules and regulations around the world, yet despite the lack of a global rule of law there’s a growing commonality about how to do business the right way,” Erblich explained. “More and more, we’re finding that stakeholders from employees and customers to executives and investors understand that ethical leadership drives outcomes ranging from operational performance to corporate integrity, transparency and workforce behavior. We’re delighted to honor these companies who not only understand the various components of what makes a company ethical but are dedicated to building an environment that makes it so.”