Strong Ethics is Good Business

I am both pleased and proud to share with you the 2024 World’s Most Ethical Companies. You can find the full list here: https://worldsmostethicalcompanies.com/honorees/

This year, Ethisphere recognizes 136 companies representing 20 different countries and 44 industries, from finance to manufacturing and from energy to retail. Every single one of these companies represents a deep commitment to a culture of ethics; environmental, social, and governance (ESG) practices; a robust ethics and compliance program; diversity, equity, & inclusion; and initiatives that support a strong value chain.

One of the most exciting things about each year’s honorees announcement is the corresponding reveal of the Five-Year Ethics Premium, which this year is an impressive 12.3%. That is the amount by which the publicly listed honorees of the World’s Most Ethical Companies have outperformed a comparable index of global companies (“SGMACU”) from January 2019 to January 2024. This is probably the most important piece of data that Ethisphere produces because it proves, year after year, that ethical companies do better financially, whether they are small- to medium-sized organizations, or part of the Fortune 500.

One of the most interesting things about the Ethics Premium is how it fluctuates over time, not because the value of ethics ebbs and flows, but because the Ethics Premium is pegged to any given year’s World’s Most Ethical Companies honorees. Since that list changes every year, so does the Ethics Premium. But the amazing thing is that no matter companies constitute the honorees list, or the state of the world economy, the Ethics Premium is always large enough for any self-respecting leader to recognize as a result worth pursuing.

This is especially worthwhile at a time when ESG is receiving pushback from certain sectors and stakeholders. It would be easy to go on the offensive on behalf of ethical business practice and pillory companies that seem to operate without it. But does that really help anyone? No.

The Ethics Premium and the best practices surfaced by World’s Most Ethical Companies honorees provide compelling evidence that strong ethics is good business. When you pursue the good, you tend to avoid the bad, and success follows. And when the bad happens, if you’re excellent at the good, then you’re primed to respond and rebound faster and more successfully. That’s pretty cool.

Publicly recognizing companies that have made such a robust commitment to business integrity also makes it easier for any ethics and compliance team to make the case internally that the practices that contribute to this recognition are the same things that prevent regulatory problems, engage employees, and build sustainable business success. 

Heading into its 19th year, the World’s Most Ethical Companies is a program conceived in the conviction that strong ethics is good business—and organizations that are dedicated to advancing business integrity should be recognized for the hard work that it takes to build best-in-class programs.