Morgan Stanley Research has disclosed their new Sole Sustainability Index (SSI), analyzing the performance of some of the biggest branded apparel and footwear businesses. The index aggregates existing data and compares the companies’ performance in terms of environmental issues (examining water, waste and raw materials, specifically cotton and leather), social matters (supply chain management and community engagement) and governance (how sustainability is integrated into the business strategy and how shareholder-friendly the corporate governance structure is).
Nike came out as the leader on environmental issues, Nike and PVH (Calvin Klein, Tommy Hilfiger etc.) shared the lead on social topics and the VF Corporation (Lee, Wrangler, The North Face, Vans etc.) topped the governance ranking.

Overall, Nike, VF Corp., and Hanesbrands (Hanes, Champion, Playtex, Wonderbra etc.) rank highest on the Sole Sustainability Index. The maximum score is 300.


However, there are several limitations to these results, as Morgan Stanley research admitted. For once, there is little, quantifiable industry ESG data (environmental, social and corporate governance) plus the existing numbers are difficult to compare. “A company’s SSI score is primarily driven by disclosure quality, plus the existence of targets and trends”, was stated in the report. Therefore Nike, VF Crop. and Hanesbrands rank at the top primarily because they disclose the most evidence of their commitment to sustainability throughout their core operations although there isn’t really enough third-party audited data.
Secondly, being a financial institution with severe commercial interests, Morgan Stanley’s objectivity in selecting the companies to be examined and their final evaluation is not given. Or, as the bank’s research department put it themselves: “Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research.”
Still, the new SSI allows to conclude that the top three ranked companies are making a serious effort towards more sustainable production and governance practices.