Ethical Companies Make More Money

by | Nov 29, 2006

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An index of companies deemed ethical, including Intel, Starbucks, The Timberland Company and Whole Foods Market, has outperformed the S&P 500 by more than 370 percent over five years, according to an ethics and compliance company.

The conclusion reached by Corpedia, the creator of the Ethics Index, is that organizations that live up to certain moral principles and codes of conduct are likely to be more profitable over time due to consumer support.

The index tracks the stock performance of publicly traded companies that are recognized – presumably to Corpedia – for  corporate citizenship, ability to attract and retain employees, and sustainability practices.

“The legal departments tasked with creating ethical programs in compliance with government regulations can now justify them with more than a simple ‘it’s the right thing to do,'” said Alex Brigham, president and CEO of Corpedia.  “The financial implications are clear: to be ethical means to be profitable.”

The average five-year return on the Ethics Index was 102 percent compared with 26 percent for the S&P500.

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