The clothing industry has seen a number of human rights violations in recent history, especially related to underpaying workers in the developing world. If you have high ethical standards, in line with the social platform of superstar Angelina Jolie, which clothing brands should you buy? Below is a list of more ethical apparel brands.
To find some ethical companies, Benzinga looked to the Ethisphere Institute, a society which publishes a list of 110 most ethical companies in the world for the year 2011. The main categories for the institute's list were corporate citizenship and responsibility, ethics and compliance program, corporate governance and reputation, leadership and innovation. A number of clothing producers and sellers made it on this list.
Among the companies that made this list include Germany's Adidas (ADSYY), a company that manages brands like Reebok and Rockport. Last year was a good year for Adidas, with total revenue up 9% compared to the previous year. Retail sales grew by 18%, driven by strong showing of Adidas' main brands, Adidas and Reebok. In late March, Adidas presented its new environmental strategy with a goal of using 100% Better Cotton by 2018 in an attempt to reduce its environmental footprint.
The markets seemed to reward Adidas' approach, since its shares gained over 9% over the last 30 days. Its shares did tumble 1.5% in the immediate morning trading following the report, however.
Next on the list is Gap
The Timberland Company
Timberland's shares are one of the major success stories this year after rising almost 60% in the last three months, even though they lost over 1% in today's trading, completing a bad morning for retailers.
H & M, a Swedish clothing store, is another household name on the list. The end of last year was far from memorable for the Swedish giant as its profits tumbled by 11%, more than the analysts were predicting. Not too encouraging for investors were its March sales figures; they were up by 2% as a result of market expansion, but same-store sales were down by 5%.
Bad sales and profit results took their toll on H & M's shares, which lost around 7% of their value in the last three months. Today's results are more encouraging for the Swedish giant as its shares at Stockholm's stock exchange were up 0.75%.
The last company on Benzinga's list is Target
This has been a difficult year so far for Target. Shares have lost almost 8% in the past three months. In morning trading, Target avoided the fate of the Gap, Adidas, and the Timberland Company and saw its shares rise by a mere 0.06%.
The modern consumers seem to care more and more about issues of business ethics and environmental stability, and many mainstream companies are increasingly addressing the modern ethical buyer. The companies on the World's Most Ethical Companies list are outperforming the S&P 500 since 2007, and the gap has widened in recent years, which indicates that the credo of the Ethisphere Institute -- "Good. Smart. Business. Profit." -- might be worth pursuing.
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