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Only Three Apparel Players Make World’s Most Ethical List

Just three players in the apparel industry were among the 135 designees on Ethisphere’s 12th annual list of the World’s Most Ethical Companies.

VF Corporation, department store chain Marks & Spencer (M&S) and Hong Kong sourcing firm William E. Connor & Associates all made the list among enterprises spanning 23 countries and 57 industries. Connor has made the list consistently since 2012, and it’s the only sourcing company recognized.

“Over the last 12 years, we have repeatedly seen that those companies who focus on transparency and authenticity are rewarded with the trust of their employees, their customers and their investors,” said Ethisphere CEO Timothy Erblich. “While negative headlines might grab attention, the companies who support the rule of law and operate with decency and fair play around the globe will always succeed in the long term.”

According to Ethisphere, top businesses are adopting “values-based leadership” as global society increasingly expects corporations to set an example for others to follow. “Diversity and inclusion, investment and long-term commitment, and constructive use of a company’s voice are now the hallmarks of what stakeholders are expecting and investors are rewarding,” Ethisphere noted.

Companies on the Most Ethical list are assessed according to five weighted categories: ethics and compliance program (35 percent); corporate citizenship and responsibility (20 percent); a culture of ethics (20 percent); governance, including oversight and risk management (15 percent); and leadership, innovation and reputation (10 percent).

[Read more on compliance trends: Top 12 Compliance Shifts in 2017]

“At VF, we believe that business success and social responsibility are interconnected,” said VF’s chairman, president and CEO Steve Rendle. “Our 65,000 associates around the world operate by this ethos every day, and this recognition is testament to their integrity, commitment and passion for doing the right thing across VF’s global enterprise.”

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Overall, apparel companies have long struggled with ethics and compliance, particularly in supply chain and sourcing operations. In the relentless hunt for the lowest possible material and manufacturing costs, many companies have spent years shifting sourcing from one country to the next, often getting in bed—knowingly or not—with suppliers that illegally outsource work to unregulated subcontractors. Many have taken a hands-off “don’t ask, don’t tell” approach to what’s happening thousands of miles from headquarters. To its detriment, the factory side of fashion has been associated with child labor, wage violations, environmental pollution and other questionable practices.

Levi Strauss and Target both earned the “Most Ethical” designation from Ethisphere last year, and in previous years as well, but Ethisphere did not provide insight on why these companies failed to make the cut in 2018.

With the “Most Ethical” distinction, companies are now in the global spotlight, with the increased responsibility to improve transparency and advance a new standard of corporate values.

“Global corporations operating with a common rule of law around the globe are now society’s strongest force to improve the human condition,” Erblich said.