World’s Most Ethical Companies – 2012 Edition

The Ethisphere Institute announced its sixth annual selection of the World’s Most Ethical Companies. One hundred forty-five organizations made the list in 2012 from more than three dozen industries, including 43 headquartered outside the United States.

Twenty-three companies that have been honored each of the six years the WME has been awarded, including Aflac, American Express, Fluor, General Electric, Milliken & Company, Patagonia, Rabobank. and Starbucks.

In the past, I’ve analyzed the list and found that investing in the companies on the list was a good choice. Last year, I looked at the 2007 list and projected forward and found that an investment in those companies would have out-performed the S&P 500 and Dow Jones Industrials.

Last year, Ethisphere highlighted the fact that this list of companies outperformed the S&P 500. That’s missing this year.  I went back to the 2007 list to see what happened .

I still see an outperformance: 13.12% versus -3.48% for the S&P and 3.02% for the Dow Jones Industrials.

You can see my calculations in this spreadsheet (in Google Docs):

That seems to show that being ethical is generally good for a company’s shareholders.