THE WORLD’S MOST ETHICAL COMPANIES CHARTING THE COURSE OF ETHICAL BEHAVIOR

The World’s Most Ethical Companies are those that outperform their peers when it comes to generating a robust and enduring ethical culture and conduct. The following pages list the 2015 World’s Most Ethical Companies recipients and highlight stories from some of this year’s honorees. ETHISPHERE.COM

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his year, 132 Companies were recognized as World’s Most Ethical Companies, spanning five continents. These organizations earned the distinction after a comprehensive application and review process.

The following is a breakdown of the methodology used to determine the World’s Most Ethical Companies: Ethics & Compliance Program (35%) This category examines a company’s program put in place to ensure compliance with applicable regulations as well as conduct that complies with the highest of ethical standards. The criteria used for this category are fully aligned to corporate best practices, relevant case law, and the “hallmarks” of an effective compliance and ethics program, as outlined by the Federal Sentencing Guidelines, including: 1. Program structure, responsibility, and resources 2. Program oversight and tone at the top 3. Written standards 4. Training and communication 5. Due care 6. Detection, monitoring, and auditing 7. Enforcement and discipline Reputation, Leadership and Innovation (10%) This category measures a company’s legal compliance, litigation, and ethical track record, along with the strength of their reputation in the marketplace. While we take into account awards and accolades earned, we also look at some concrete examples of corporate leadership in local, national, industry, and/or global initiatives that promote business ethics, responsible/sustainable business practices, environmental stewardship, good governance, transparency, and social responsibility. Standard setting and thought leadership are important, but ultimately what matters most are the quality and innovation of a company’s engagement with various stakeholders considered within the context of that company’s size, industry, and performance in comparison to industry peers. Questions on leadership and innovation are not only presented in a standalone section of the survey, but are ever-present throughout the survey as a whole.

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Governance (15%) This category looks at the availability and quality of systems designed to ensure strong corporate governance (as defined by the US Sentencing Commission, Securities and Exchange Commission, and other regulatory bodies), including oversight, governance principles, and risk management. Governance criteria is modified as needed and as is appropriate when reviewing private companies, partnerships, educational institutions, and non-profits. Corporate Citizenship and Responsibility (20%) This category reviews a wide range of a company’s performance indicators associated with sustainability, citizenship, and social responsibility, specifically including such areas as: environmental stewardship; community involvement; corporate philanthropy; workplace impact and well-being; and supply chain engagement and oversight. The quality and efficacy of the initiatives are considered, in addition to stated and measureable goals, accountability, and transparency. Culture of Ethics (20%) This category examines the extent to which an applicant promotes an organizational culture that encourages ethical conduct and a commitment to compliance with the law. Specifically, the category measures an organization’s efforts and success at establishing an ethical tone at the top of the organization and then the steps taken to communicate, reinforce, and monitor the effectiveness of that tone throughout every level of the organization. Note that there is not a specific set of questions on this subject; rather, Ethisphere considers the company’s responses to questions from throughout the survey that go to the company’s underlying culture.

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AEROSPACE & DEFENSE Elbit Systems of America // USA Rockwell Collins // USA

APPAREL Gap Inc. // USA Hennes & Mauritz AB (H&M) // Sweden Levi Strauss & Co. // USA

AUTOMOTIVE Cummins Inc. // USA Delphi Automotive PLC // USA Ford Motor Company // USA

Jim Zappa VP, Associate General Counsel & Chief Compliance Officer 3M Company Industrial Manufacturing

BANKS: NATIONAL Banco do Brasil S.A. // Brazil National Australia Bank // Australia Teachers Mutual Bank // Australia

BANKS: REGIONAL Old National Bancorp. // USA

BANKS: SUPER REGIONAL U.S. Bank // USA

BUSINESS SERVICES

Building a strong ethics program at 3M is a team sport, says Jim Zappa, Vice President, Associate General Counsel, and Chief Compliance Officer at 3M Company. “Our business leaders own the compliance and ethics performance of their teams and are accountable for effective compliance. However, every 3Mer has to do their part. For example, staff groups have to be in the game, too. Finance, Audit, and Human Resources all have critical roles to play to support the business teams’ efforts.

Dun & Bradstreet // USA

CHEMICALS Eastman Chemical Company // USA Ecolab Inc // USA

COMPUTER HARDWARE Dell Inc. // USA Hitachi Data Systems // USA TE Connectivity // Switzerland

COMPUTER SERVICES Google Inc. // USA

COMPUTER SOFTWARE Adobe Systems Incorporated // USA Microsoft Corporation // USA Symantec Corporation // USA Teradata Corporation // USA

CONSTRUCTION & BUILDING MATERIALS Cementos Progreso // Guatemala Granite Construction Incorporated // USA

CONSULTING SERVICES Accenture, LLC // USA Capgemini // France

CONSUMER PRODUCTS Colgate-Palmolive Company // USA Henkel AG & Co KGaA // Germany Kao Corporation // Japan

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“Similarly, it’s essential that functional teams collaborate at an enterprise level to utilize best practices and identify opportunities. I’m quite proud of the extent to which 3M’s leaders have embraced the opportunity to sustain and advance our culture of integrity and compliance.” Their collective efforts continue to pay off. 3M has been honored on Ethisphere’s World’s Most Ethical Companies list for several years running. According to Zappa, ethics at 3M are more than a set of rules that employees read and forget. Staff truly lives the values of the organization in their day-today activities. “Recently, a logistics employee in one of our developing economy subsidiaries was meeting with a customs official and our logistics vendor regarding a renewal license to import products,” he recalls. “The customs official solicited our employee for a payment to approve the license renewal. Our employee immediately said no and left the meeting. She made it clear to our logistics vendor that it was not to consider paying any money. She immediately reported the situation to her management and then to the Compliance Department. We were able to respond and intervene with the customs official to get the license renewal approved. Our employee told us she knew immediately that the customs official was testing her ethical grounds. Our employee passed the test and did not waiver in doing the right thing.” In the spirit of supporting such ethical conduct, the company acknowledges compliance successes through a “Living the Code” program launched last year. “It helps put a positive tone on compliance and recognizes employees who do the right thing. We want to send positive messages about compliance, especially in countries that often are described only as ‘high risk’ (which can have a negative tone),” Zappa notes. In addition to implementing and improving upon industry gold-standard best practices, 3M also sees value in generating new ideas and breaking new ground. “It is always good to innovate and experiment with ethical culturebuilding initiatives,” says Zappa. “Not every one of them will succeed or work at a corporate level, but at an innovative company, the compliance function has to be willing to innovate, too.” The combination of solid programs and pioneering new ideas has helped 3M achieve acclaim as both a profitable business and as a company of integrity.

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CREDIT SERVICES

Debra Clements Senior Vice President, Senior General Counsel & Corporate Secretary Milliken & Company Industrial Manufacturing

TSYS, Inc. // USA Visa Inc. // USA

DIVERSIFIED MACHINERY ABB Group // Switzerland Rockwell Automation // USA Schneider Electric // France

ELECTRONICS WHOLESALE Avnet, Inc. // USA

ENERGY & UTILITIES: ELECTRIC

As a 150-year old company, Milliken & Company boasts a rich history and a long list of achievements. However, a few stand out from the rest, says Debra Clements, Senior Vice President, Senior General Counsel, and Corporate Secretary. “From a company perspective, we are most proud of our associates’ commitment to ethics that have enabled us the honor of receiving Ethisphere’s World’s Most Ethical (WME) Company distinction nine years in a row. “From a personal perspective, though, I am most proud to have been able to establish the world-class systems, policies, and procedures that have formalized the outstanding ethical legacy built over a century and a half by our shareholders. This work helps ensure that legacy will continue to grow, as the company continues to grow and prosper globally.” Despite its long history and rock-solid reputation, Milliken is not resting on its laurels. It continues to build upon the already strong foundation it’s established through the development of new and better programs and policies. “This past year, we rolled out a test project with Ethisphere called the Supplier Risk Quotient (SRQ),” says Clements. “This is an attempt to provide ISO-like standards for ethics. The SRQ provides suppliers with a method of allowing a third party to help assess and score their ethics and compliance program so that their customers can truly evaluate suppliers on ethics. In the coming year, we plan to launch programs related to alternative dispute resolution and more amicable and ethical methods of resolving disputes.” Every associate, she says, feels that he or she is personally responsible for the company ethics. “We ensure that all of our associates understand that good ethics equals good profit, especially in our business units. Our CEO begins every leadership meeting with an update on, and discussion of, ethics. The systems, policies, and procedures that have been put in place over the last decade result in recurring ethics education, proactive responsibility, and an absolute commitment of no retaliation for raising concerns regarding ethical behavior.” Outside of the office, Milliken associates put the company’s policies and principles into action, lending their time and expertise to the communities in which they reside through partnerships with The United Way, Red Cross, STEM Educational programs, Habitat for Humanity, and other organizations focused on health, education, and safety. “Most recently, we entered a partnership with the City of Spartanburg to fund a comprehensive study to understand the opportunities to improve the safety and quality of life of our residents,” says Clements. Among her tips for companies aspiring to WME status: “Lead by example, understand that most people want to do the right thing, believe that ethics has a significant ROI, align initiatives with incentives, make it part of your DNA, assign an owner, investigate what programs you may already have in place, and fill in the gaps.”

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Energias de Portugal, S.A. // Portugal Iberdrola, S.A. // Spain NextEra Energy, Inc. // USA The AES Corporation // USA The Tata Power Company Limited // India

ENERGY & UTILITIES: NATURAL GAS National Grid // UK NiSource, Inc // USA Sempra Energy // USA

ENERGY & UTILITIES: WATER Northumbrian Water Group // UK

ENGINEERING & DESIGN: SERVICES CH2M HILL // USA Fluor Corporation // USA Parsons Corporation // USA

ENVIRONMENTAL SERVICES Waste Management, Inc. // USA

FINANCIAL SERVICES Northern Trust // USA Thrivent Financial // USA TIAA-CREF // USA

Voya Financial® // USA FOOD & BEVERAGE illycaffè spa // Italy Ingredion Incorporated // USA Kellogg Company // USA PepsiCo Inc // USA The Hershey Company // USA

FOOD SERVICES Aramark // USA

How do you feel about the list so far? Tell us what you think about the 2015 #WorldsMostEthicalCompanies on Twitter. Mention @ethisphere

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FORESTRY, PAPER & PACKAGING International Paper Company // USA SCA // Sweden Weyerhaeuser Company // USA

GOVERNMENT SERVICES Autoridad del Canal de Panama // Panama Empresa de Desarrollo Urbano // Colombia

HEALTH & BEAUTY

James L Chosy Executive Vice President and General Counsel U.S. Bank Banks - Super Regional

L’ORÉAL // France Natura Cosméticos // Brazil Shiseido Co., LTD. // Japan

HEALTHCARE PRODUCTS Henry Schein Inc // USA

HEALTHCARE SERVICES Hospital Corporation of America (HCA) // USA Novation, LLC // USA Premier, Inc // USA

HOSPITALS Baptist Health South Florida // USA Cleveland Clinic // USA North Shore-LIJ Health Systems // USA University Hospitals // USA

INDUSTRIAL MANUFACTURING 3M Company // USA Deere & Company // USA GE // USA Johnson Controls, Inc. // USA Milliken & Company // USA

INFORMATION TECHNOLOGY SERVICES Ricoh Company, Ltd. // Japan Wipro Limited // India Xerox Corporation // USA

INSURANCE: ACCIDENT & HEALTH Aflac Incorporated // USA Wisconsin Physicians Service Insurance Corporation // USA

INSURANCE: BROKERAGE Arthur J. Gallagher & Co. // USA

INSURANCE: HEALTH Blue Shield of California // USA BlueCross BlueShield of North Carolina // USA CareFirst BlueCross BlueShield // USA

INSURANCE: LIFE Knights of Columbus // USA Massachusetts Mutual Life Insurance Company // USA Prudential Financial Inc // USA The Principal Financial Group // USA

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“Banking is a stewardship business, and we operate by special charter,” says James Chosy, Executive Vice President and General Counsel at U.S. Bank. “This means we have a unique and special responsibility to our customers. We take that charter and responsibility very seriously.” That spirit has lifted U.S. Bank to World’s Most Ethical (WME) Companies status for the first time this year. Chosy says the tone from the top at U.S. Bank plays a pivotal role in modeling ethical behavior for the rest of the organization. “Our commitment to ethics and integrity starts at the top. We talk about doing the right thing—one of our core values—all the time. As one of the largest banks in the United States, preserving the trust relationship we have with our customers is critically important. We have 18.5 million customers who depend on us to help them build and maintain financially secure financial futures. That requires all 67,000 employees doing the right thing every day.” The bank’s communication to the organization is anchored to a powerful, top-down message about ethics and integrity, he says, and while that message is important, taking actions consistent with it is equally critical. “Ethics in action happens daily as we work to help our customers achieve financially secure futures. Specifically, we use our core values to resolve difficult issues and correct mistakes that we make. When that happens, our focus is on owning it, improving it, and making sure it does not happen again. That is the only way to preserve our reputation. We are not looking for excuses; rather, we are always looking to live our values and improve where we need to. That’s what our customers expect of us and that’s what we expect of ourselves.” As a first-time honoree on this year’s World’s Most Ethical Companies list, U.S. Bank is in an ideal position to offer guidance to other organizations aspiring to this elite honor. “My advice is simple,” says Chosy. “The organization must be exactly what it purports to be. You cannot manufacture your way onto the list. It is all about substance. If the fundamental principles, programs, and philosophies of your organization do not reflect what WME stands for, then examine your values and culture closely. That is where changes need to be made—not on the WME application.” The process for achieving WME status is exhaustive and reveals the ethical health of your organization, he concludes, as well as the areas that may require improvement. “A critical self-examination of what you do and how you do it is always a productive exercise, regardless of the reason, and can initiate positive change. The point is to continuously pursue improvement in your commitment to ethics and integrity—even after you may have achieved WME status. You are never ‘done’ with culture and ethics, and you can never rest on it. As someone once said, it requires ‘eternal vigilance’.”

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INSURANCE: PROPERTY & CASUALTY

Ray Day Group Vice President, Communications Ford Motor Company Automotive

Allstate Insurance Company // USA The Hartford // USA

LODGING, LEISURE & RECREATION Holland America Line-Seabourn // USA Marriott International, Inc. // USA The Rezidor Hotel Group // Belgium Wyndham Worldwide Corporation // USA

MACHINE TOOLS & ACCESSORIES Hypertherm Inc. // USA Kennametal Inc. // USA The Timken Company // USA

“We at Ford take great pride in being named among the World’s Most Ethical (WME) Companies by the Ethisphere Institute. Ethisphere’s recognition of companies committed to being ethical, honest, and transparent is appropriate, as they also are among our core values at Ford,” says Ray Day, Group Vice President, Communications. Those values, he says, are embodied in the company’s “One Ford” philosophy, which emphasizes such qualities as collaboration and trustworthiness. “One Ford is a set of principles that guides our business,” says Day. “Our values focus on innovation, transparency, and teamwork, and include: showing initia­ tive, courage, integrity, and good corporate citizenship; consistently enhancing quality, safety, and sustainability; and developing skilled, motivated people with a can-do attitude who enjoy the journey we are on.” The company is deeply committed to progress and continuous improvement, he says, but never at the expense of taking ethical shortcuts—a message that is communicated to, and lived out by, staff on a daily basis. “Our promise at Ford Motor Company is to ‘Go Further’ in everything we do. This includes creating vehicles with innovative technology and class-leading fuel efficiency and safety. It also means giving back to the communities in which we work around the globe and building a thriving business that provides value to our stakeholders. To highlight that ethics and compliance are at the heart of our business, we have initiated a multi-faceted internal communications campaign that reminds our team that we always Go Further The Right Way. Doing the right thing is part of our DNA, and we are proud that our employees demonstrate ethical behavior every day in communities around the globe.” Employees strive to achieve their best with integrity even in the face of tough challenges, he notes. “We see ‘ethics in action’ every day at Ford, in facing situations openly and honestly. Being an ethical company is part of who we are. For example, last year we realized we had an issue in our US testing procedures that led to some incorrect fuel economy labels on some vehicles. We did the right thing by being transparent, working with the government to update the labels, and communicating quickly with our customers.” Day says leadership at all levels must be engaged if a company is to be successful at attaining WME status. “The leadership team absolutely has to set the tone for the business, modeling ethical behaviors, insisting on transparency and accountability, holding firm in making ethical choices, and honoring legal obligations. When people see the leadership team doing the right thing, consistently and steadfastly, everyone is more likely to live up to the same high standards. “At Ford, we consider ourselves custodians of this great company and recognize that we are standing on the shoulders of the men and women who have come before us in our more than 111 years of operation,” he concludes. “Delivering a strong business in an ethical way will mean a successful Ford Motor Company in the short term, and will build on our collective legacies for the long term.”

MEDIA & PUBLISHING Thomson Reuters TR // USA

METALS Schnitzer Steel Industries, Inc. // USA Tata Steel Limited // India

OIL & GAS Alyeska Pipeline Service Company // USA DCC plc // Ireland PKN ORLEN S.A. // Poland Spectra Energy Corp. // USA

PHILANTHROPY The Nature Conservancy // USA

REAL ESTATE CBRE Group, Inc. // USA Jones Lang LaSalle Incorporated // USA Realogy Holdings Corporation // USA

RETAIL Marks and Spencer // UK Petco Animal Supplies, Inc. // USA

SAFETY EQUIPMENT MSA Safety Incorporated // USA

SCIENTIFIC & TECHNICAL SERVICES Concurrent Technologies Corporation // USA GIA (Gemological Institute of America) // USA

SEMICONDUCTOR EQUIPMENT & MATERIALS Applied Materials, Inc. // USA Intel Corporation // USA Texas Instruments Inc // USA

SOURCING SERVICES William E. Connor & Associates Ltd. // Hong Kong

SPECIALTY EATERIES Starbucks Coffee Company // USA

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STAFFING & OUTSOURCING SERVICES ManpowerGroup // USA Paychex Inc // USA

TELECOMMUNICATIONS EQUIPMENT Cisco Systems, Inc. // USA

TELECOMMUNICATIONS SERVICES SingTel // Singapore T-Mobile US, Inc. // USA

Todd Camp Senior Director, Corporate Social Responsibility & Community Relations The Hershey Company Food & Beverage

TOYS & GAMES Hasbro, Inc. // USA Mattel, Inc. // USA

TRANSPORTATION & LOGISTICS United Parcel Service // USA

A Special Thank you Ethisphere would like to thank its partners at NYSE Governance Services and Thomson Reuters’ WestLaw for providing data that was used to help review companies’ submissions.

More Information The full list of the 2015 World’s Most Ethical (WME) Companies, as well as the list of previous years’ WME Companies honorees, can also be found online on Ethisphere’s website at www.ethisphere.com. Further details on the WME nomination and selection process, including information on the Ethics Quotient score and answers to Frequently Asked Questions, are available online at www.ethisphere.com/wme. The nomination process is open throughout the year.

How do you feel about this year’s list? Tweet your thoughts about the 2015 #WorldsMostEthicalCompanies on Twitter. Mention @ethisphere

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Although The Hershey Company is a World’s Most Ethical (WME) Companies honoree for the first time this year, they have been exemplifying the values embodied by that distinction for over a century says Todd Camp, Senior Director, Corporate Social Responsibility & Community Relations. “The Hershey Company continues to grow into a global company, evolving to meet the needs of the marketplace, just as we have for more than 100 years,” says Camp. “One thing that has not changed, though, is our commitment to operating with the highest ethical standards. In fact, as we’ve grown as a company, our commitment to increased transparency, disclosure, and upholding the highest ethical standards has expanded significantly. This commitment dates to the founding of our company and has earned Hershey a reputation for fairness and honesty throughout the world.” The company’s ethical commitments can be seen in a variety of areas, he says, including supply chain commitments to 100 percent certified cocoa and 100 percent sustainable and traceable palm oil, and investments and programs that help provide cocoa farmers with a combination of productivity enhancements and community development interventions. In the spirit of giving back and making a positive difference in the communities in which they work and live, employees receive two paid days off each year to volunteer. Hershey also conducts an annual week of service, Good to Give Back Week, where thousands of employees volunteer with non-profits across the globe. “This commitment to giving back stems from the vision of our founder, Milton Hershey, who, three decades before his death, gave away his entire fortune to set up a school for underserved children,” says Camp. “Today, the Milton Hershey School is the largest kindergarten through 12th grade residential school in the world, and is the company’s single largest shareholder. The only requirements for admittance to the school are that students come from either severe poverty or severe social risk.” For those companies aspiring to WME status, and perhaps applying for the first time, Camp offers some sound advice: “Be prepared to take an in-depth look at all aspects of your culture of ethics and your supplier codes of conduct. Benchmark recognized ethics leaders across various industries and identify the largest gaps you have with your company’s approach.  Closing those gaps is not always easy, and requires dialogue and alignment with key stakeholders in all functions within the company. “We started this process several years ago, and have worked during that time to strengthen and expand our codes both internally and also with regard to our supply chain. We still have work to do, as it is truly a process that requires regular review and continuous improvement—particularly as we grow in other parts of the world. However, it’s a process well worth the effort.”

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