Marks & Spencer and Wal-Mart drive the ethical agenda of retailers, which has been dominated by environmental issues in 2006-2007, according to the Covalence Retail Industry Report 2007.

Marks & Spencer is a proactive leader, according to the report, appearing in many positive news items and maintaining a low level of negative news. Wal-Mart is more of a reactive leader. After being a target of critical campaigns for many years, the company started a move towards CSR in 2006, as the EthicalQuote reputation curve shows.

Eight out of the top ten positive issues registered for 2006 -? 2007 deal with the environment. These eight issues are: carbon footprint, green, or “Eco Options” labels on products; eco-textile clothing lines; CO2 Emissions cuts in stores or supply chains; Marks & Spencer’s “eco-plan” includes going carbon neutral; pushing suppliers to improve sustainability – Packaging Scorecard; companies reducing the use of conventional plastic bags; and environmentally responsible products.

Major negative issues affecting the ethical reputation of retailers deal with working conditions: international workplace abuses or low wages in the supply chain; anti-union tactics or violations of right to organize; ratio of CEO pay to worker pay; companies forcing employees to work through breaks; unethical behavior; low wages; unfair working conditions at Bangladeshi factories; and violation of ETI due to worker exploitation in supply chains.

Covalence predicts that the ethical reputation of retailers will continue to progress as long as the current environmental wave lasts. Alternatively, a possible climate fatigue and the return of labor issues important in the public scene could bring difficult times. There is a serious risk of being perceived as trading-off, or hiding labor issues behind green credentials that could, according to the report, harm years of efforts in reputation-building.