Tuesday, April 14, 2009

The Kirk Report

The Kirk Report

The World's Most Ethical Companies

Posted: 14 Apr 2009 09:51 AM PDT

The World's Most Ethical Companies
The Ethisphere Institute has released this year's list of The World's Most Ethical Companies. According to their website, 99 companies made this year's cut after a lengthy selection process. In addition, they also have made the bold claim that the past performance of the world's most ethical companies (the WME) have significantly outperformed the S&P 500 over the past five years:

WME

While we all would like to believe and really hope that the world's most ethical companies reward their shareholder's the most, I must admit I'm skeptical of such performance claims based on my personal tracking and observation of socially conscious investment funds. As someone who desires very much to align my long-term investments in a socially conscious manner whenever possible, I've struggled with finding a way to do this without sacrificing my performance at the same time. Perhaps this year's list can help (or not). We shall soon see!

Last night I looked up the ticker symbols of the companies named within the most ethical group. Unfortunately, I was able to find only 62 of the 99 companies primarily because some of the companies named are private companies (like Trader Joe's), divisions of other companies (like T-Mobile is owned by Deutsche Telekom), or foreign companies (like Japan's Kao) that is impossible for U.S. investors to gain direct exposure to. This by itself raises an eyebrow due to the performance claims made in past years (after all, how do you compare the performance of firms to the S&P 500 that are not publicly traded?), but at least we can create a watchlist to track and monitor over the coming year on our own of the companies we can track.

WME 2009

In case you need it, here's the spreadsheet that also breaks down this group of stocks by sector. Ideally, if past significant outperformance continues, this would be a nice watchlist/screen to work with but we'll see how it performs over the coming year.

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