10 Most Ethical Companies In The US

What have the 10 most ethical companies in the US done to earn the title? Who gets to decide that these companies are ethical or not?

Ethics is a system of moral principles which define how people should make decisions and lead their lives. It refers to standards of right and wrong that prescribe what an entity ought to do, usually in terms of rights, obligations and benefits to society. Ethical companies have a specific way of conducting their business in a manner that they do not cause any damage to the environment or exploit their employees or consumers. The most ethical companies in the US are known for promoting high quality business standards and practices  that enable employees to make good choices and in turn shapes a better future for the company. Good ethical practices include a moral code of conduct, a transparent way of doing business and incorporating corporate social responsibility practices. You can also check out our list of 10 most socially responsible companies in the US.

According to a research paper in the International Journal of Scientific and Research Publications, the importance of ethics in the business world is both superlative and global. Proper ethical behavior has become fundamental in organizations to avoid any possible lawsuit. Globalization and free trade policies have further stressed upon the importance of ethical behavior in organisations.

Ethisphere Institute is an organization that ranks companies based on their ethics every year. Their methodology involves scoring companies according to five parameters – ethics and compliance program (35%), corporate citizenship and responsibility (20%), culture of ethics (20%), governance (15%), and leadership, innovation and reputation (10%). We present the list of the 10 most ethical companies in the US on the following pages ranking them based on their market capitalization values. All these companies were recognized as most ethical in 2016 by Ethisphere Institute, but no scores were disclosed openly.

10. Starbucks Corporation (NASDAQ:SBUX)

Market cap: $84.77 billion

The American coffee company has high values when it comes to business ethics and commitment to social responsibility and makes conscious efforts to fulfill its missions. The company has been featured on the list of most ethical companies in the U.S for the tenth year in a row. Starbucks has made the list of Most Admired Companies in the U.S., the list of 100 Best Companies to Work For, the list of the World’s 50 Most Innovative Companies, and the list of the World’s Most Ethical Companies. Starbucks has cheered investors by returning more than 245% out-performing the broader NASDAQ which has returned 135% during the same time.

9. United Parcel Service, Inc. (NYSE:UPS)

Market cap: $93.72 billion

UPS, the global leader in logistics, was recognized as a World’s Most Ethical Company for the tenth consecutive year by the Ethisphere Institute. The company is known for its CSR efforts and is recognized for its role in the global business community. Its sustainability efforts are focused on doing more to protect the environment and improve the economy. The stock has returned more than 45% to its shareholders over the past decade and regularly pays dividends.

8. 3M Company (NYSE:MMM)

Market cap: $109.05 billion

3M Company has been ranked as the world’s most ethical company for a third year in a row. Though 3M scored high marks in all categories assessed by Ethisphere, it performed extremely well in citizenship and corporate responsibility criteria. The company’s principles of ethics and integrity are embedded in the ways it conducts business. It applies an effective Code of Conduct creating strong social responsibility and corporate citizenship. Shares of 3M Company have risen by 138% over the past decade.

7. MasterCard Inc. (NYSE:MA)

Market cap: $118.87 billion

MasterCard believes that integrity and high standards of ethical conduct are imperative to running a successful business. Ethics and compliance are embedded in its core values enabling it to conduct business in a transparent and open way. The company complies with a Code of Conduct when dealing with its customers, business partners, competitors, shareholders, vendors and regulatory agencies. An independent board structure and a robust risk and compliance programs further fosters sound governance. The stock has returned more than 900% over the last ten years.

6. PepsiCo, Inc. (NYSE:PEP)

Market cap: $156.12 billion

The leading food and beverage company follows a global code of conduct for its employees. Pepsico, the nmber 6 in our list of most ethical companies in the US lays importance on corporate governance and human, environmental and talent sustainability. PepsiCo has removed thousands of metric tons of saturated fats from key global brands in key markets and also stresses on water conservation and usage of recycled materials. PepsiCo has set specific goals called “Performance with Purpose” to achieve a sustainable business growth. The company has been honored as the most ethical company for the tenth consecutive year in 2016. The company’s stock has returned more than 69% over the last ten years and also has an attractive dividend yield of 2.75%.

5. Cisco Systems, Inc. (NASDAQ:CSCO)

Market cap: $172 billion

Cisco has been honored by the Ethisphere Institute as one of the 10 most ethical companies in the US for the ninth year consecutively. The company maintains a Policy Central website, reporting and disclosures tools, ethics-related training and annual employee Code of Business Conduct (COBC) certification. In addition the company also has a Supplier Code of Ethics and Financial Officers Code of Conduct. Cisco has continually achieved 100% participation in its code of business conduct certification and training. The stock is up by 24% over the last ten years and sports a dividend yield of 3.4%.

 

4. Intel Corporation (NASDAQ:INTC)

Market cap: $173.4 billion

The multinational technology corporation was awarded the title as one of the most ethical companies for the sixth time last year. Intel Corporation commits to ethical and legal business, the environment, human rights and labor practices on a worldwide basis. Intel has excelled in various fields including ethics and compliance, corporate citizenship and responsibility and was recognized for applying ethical leadership across these criteria. The company also addresses climate change issues by reducing PFC emissions, following a water policy and by improving the energy efficiency. The stock is up by more than 70% over the last decade.

3. Visa Inc. (NYSE:V)

Market cap: $204.15 billion

Visa was honored as a World’s Most Ethical Company for the fourth year consecutively. The company demonstrates a strong commitment to ethical practices through various policies, training and programs. Its Code of Conduct emphasizes on honesty and integrity of its employees and directors. In addition, Visa also contributes towards humanitarian support, community involvement, and business practices. The stock performance has cheered investors with gains of over 440% in the last decade.

2. General Electric Company (NYSE:GE)

Market cap: $262 billion

Up next in our list of most ethical companies in the US is General Electric Company that has made it every year to the list of most ethical companies in the world since the last decade. The company is known for promoting ethical business standards and follows an integrity culture and compliance program. GE’s employees and leaders execute high level of ethical standards and can freely raise integrity concerns through the company’s open reporting environment. Though the stock was down 18% in the last ten years, it returned more than 55% over the last five years. The company’s stock also has an attractive dividend yield of 3.24%.

1. Microsoft Corporation (NASDAQ:MSFT)

Market cap: $499 billion

Microsoft Corporation is the largest amongst the 10 most ethical companies in the US.  The American multinational company has its headquarters in Redmond, Washington and R&D facilities in various parts of the world. The technology giant applies principles of ethics and integrity when dealing with customers, shareholders, suppliers and government officials. All employees are required to complete an annual training on the company’s Standards of Business Conduct. Regular audits are also conducted to investigate and remediate any improper conduct. Shares of Microsoft Corp have risen by 124% over the past decade.

Disclosure: None