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The Most Sustainable Apparel & Footwear Companies Might Surprise You

Wayne Duggan

According to a new report by Morgan Stanley analyst Jay Sole, Nike Inc (NYSE: NKE), Hanesbrands Inc. (NYSE: HBI) and VF Corp (NYSE: VFC) are the top companies among apparel and footwear names when it comes to managing environmental, social and governance (ESG) issues. The three companies scored highest on the Sole Sustainability Index (SSI), and Morgan Stanley upped its price targets for all three names.

What Is The SSI?

The SSI is Morgan Stanley’s attempt to provide quantifiable data on hard-to-measure ESG performance. “A company’s SSI score is primarily driven by disclosure quality, plus the existence of targets and trends,” Sole explained.

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Top Performers

Sole praises Nike, Hanesbrands and VF Corp for environmental initiatives such as limiting water usage, reducing waste and conserving raw materials. On the social side, each company has made efforts to manage its supply chain and engage with local communities. Finally, the companies’ internal governance indicates that each takes sustainability extremely seriously and has demonstrated this commitment consistently in recent years.

Other Top Names

Although Sole focuses on the top three names in the report, other companies also demonstrated high SSI scores. PVH Corp (NYSE: PVH), Deckers Outdoor Corp (NYSE: DECK) and Columbia Sportswear Co (NASDAQ: COLM) round out the top six scorers.

Outlook

Morgan Stanley currently has Overweight ratings on Nike and Hanesbrands and an Equal-Weight rating on VF Corp. The firm now has a $119 target for Nike, a $36 target for Hanesbrands ad a $77.50 target for VF Corp.

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Latest Ratings for NKE

Date Firm Action From To
Jul 2015 Jefferies Maintains Buy
Jun 2015 Citigroup Maintains Buy
Jun 2015 Buckingham Research Maintains Buy

View More Analyst Ratings for NKE
View the Latest Analyst Ratings

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