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GE, Starbucks Make ‘Most Ethical’ List; Patagonia, Best Buy Drop Off

Patagonia and Rabobank have fallen off the World’s Most Ethical Companies list after six straight years, while General Electric, Starbucks and American Express are among the 15 organizations to make the list for seven years running.

First-time recipients Visa and Sherwin-Williams also made Ethisphere’s 2013 list, which includes 138 companies, down from 145 companies that made the 2012 list. Forty of this year’s winners are from outside the US.

The annual list highlights companies that outperform industry peers in ethical behavior. Ethisphere reviews companies using its proprietary rating system called the Ethics Quotient, which is comprised of a series of multiple-choice questions. The US-based think-tank than further narrows the list by reviewing corporations’ codes of ethics and litigation and regulatory infraction histories, as well as sustainable business practices.

Despite fewer companies making the cut this year, Ethisphere executive director Alex Brigham says more companies than ever before applied.

In addition to Patagonia and Rabobank, Kimpton Hotels, Timberland, Costco, Best Buy and Stonyfield are some of the big names that have dropped off the list.

Last month, Patagonia announced that this fall it will launch a two-year responsible economy campaign aimed at finding new measures of success that do not depend on selling more goods and services. Last year, the company became the first company in California to elect to be a “benefit corporation.” The legal status affords a company’s directors legal cover to consider environmental and social benefits over financial returns.

In July 2012, Timberland won Ethical Corporation’s Responsible Business Forum award for its sustainability reporting and its online sustainability portal. The judges praised the portal’s transparency, interactivity and quarterly updates.

General Electric ranked No. 5 on the SMI-Wizness Social Media Sustainability Index 2012, an annual review analyzing how major companies use social media to communicate sustainability and corporate social responsibility, which was published last month. Ebay — which also made the 2013 Most Ethical Companies List — took third place.

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12 thoughts on “GE, Starbucks Make ‘Most Ethical’ List; Patagonia, Best Buy Drop Off

  1. But why? (There’s no explanation of why Patagonia would drop off the list. Did they get less ethical? I could understand them getting pushed aside on a top 10 or 20, but this is a very long list. What happened?)

  2. Why did Patagonia drop off the list? Based on what I know about the company it seems like a stellar example of an ethical company. Some comment for some of the other companies that dropped off. This makes me question the metrics involved.

  3. I too am wondering why Patagonia had been dropped. As an employee who is quite familiar with our sustainability work, environmental grants program, environmental campaigns, corporate social responsibility efforts and other attempts at doing no unnecessary harm, I can assure you we are doing more today than ever before. And I’ve been with the company 15 years.

  4. It’s a joke that companies like Patagonia, Rabobank and Stonyfield have dropped off – and undermines the credibility of the index. I pretty surprised to see Timberland drop off as well. This probably reveals shortcomings in the methodology, more than anything else.

  5. I also question the methodology. Dumping companies like Patagonia and Timberland who integrate stewardship into every aspect of their business strategy and then including EcoLab and Mattel.

  6. I guess I can stop paying attention to this list, as dropping Patagonia from it shows that the process is likely flawed.

  7. Zero credibility to have an ethics list that removes Patagonia and Stonyfield…perhaps they didn’t pay Ethisphere to be included in the competition this year

  8. What metrics are being used to define ‘ethical’ here? Patagonia becomes California’s first Benefit Corporation, legally cementing their values into the DNA of their company forever, launch the Sustainable Apparel Coalition and the ‘don’t buy this jacket’ campaign to wake consumers up to our unsustainable purchasing habits. Is it unethical to push the boundaries of what’s possible for companies to do good?

  9. I think a lot of these “greenest” or most “socially responsible” listings are slanted toward huge companies that can pay a lot of money to market themselves as such. Small companies, like Patagonia, aren’t making the cut, seemingly because of their size – even if they are using unique, innovative strategies while remaining profitable. See my article on this topic with more examples.

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