Ethical Companies Shown to Be More Profitable Over Time

Corpedia's Ethics Index Outperformed S&P500 Nearly Four-Fold Over Five


Nov 29, 2006, 00:00 ET from Corpedia

    PHOENIX, Nov. 29 /PRNewswire/ -- An index of companies deemed ethical
 by numerous sources has outperformed the S&P500 by more than 370 percent
 over five years, showing that organizations that live up to certain moral
 principles -- or codes of conduct -- are likely to be more profitable over
     Created by Corpedia, a leader in risk assessment and eLearning for
 ethics and compliance, the Ethics Index tracks the stock performance of
 publicly traded companies that are recognized for their corporate
 citizenship, ability to attract and retain employees, and sustainability
 practices. See
     "Based on this evaluation, it's clear that consumers want the companies
 they frequent to do business in a manner they can respect," said Alex
 Brigham, president and CEO of Corpedia, and co-founder of the Ethisphere
 Council, founded this year to help companies use ethical leadership as a
 competitive advantage and to increase profitability.
     "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,'" Brigham continued. "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. "This means that if you had
 invested in a portfolio of ethical companies five years ago, you would have
 gotten returns four-times as such as the market in general," Brigham said.
     The results of the Ethics Index show consumer support for purchasing
 from companies that promote ethical practices. According to the Ethisphere
 Council, key drivers of this profitability for Ethics Index companies
 include how loyal customers are and how strongly they identify themselves
 with a corporation's products and services.
     Other key drivers include the ability to:
        *  attract customers away from competitors
        *  prevent its own customers from defecting
        *  enter new markets
        *  attract and retain superior workforce
        *  more easily obtain or develop proprietary intellectual property
        *  offer new products and services to the same customer
        *  command superior pricing
     The companies comprising the Ethics Index include Intel, Starbucks, The
 Timberland Company and Whole Foods Market, among others. Independent
 experts repeatedly included these companies on lists of quality corporate
 citizens, admired companies or best companies for which to work.
     CONTACT: Cathy Planchard, Mindspace
               (480) 941-8497

SOURCE Corpedia