Blue Jeans, Business Ethics, and Big Money by Claudia Peng W'22

Globally, an estimated 163 million children, aged five to fourteen, work in sweatshops--defined as workplaces that violate two or more labor laws. Toiling away in treacherous factories often for less than $5 a day, workers face inhospitable conditions brought upon them by profit-driven corporations who often lack regard for basic human rights. While activist groups and governments have demonstrated some initiative towards generating positive change in ameliorating toxic work environments, in order for real change occur, the transformation has to come from within corporate structures.

Since its 1853 formation, Levi Strauss and Co., generally known as Levi’s to the ordinary consumer, and the originator of “blue jeans,” has revolutionized not only fabric technology, the fashion industry, but most significantly, the modern concept of business ethics. Commonly acknowledged as the gold standard of ethical responsibility by business ethicists and firms around the world, Levi’s has become highly revered for its rigid, ethical code of conduct.

From its inception, Levi’s has demonstrated responsibility towards its employees. One of the first to integrate its factories during WWII, Levi’s desegregated all of its facilities, fulfilling its promise of equality and justice.

Instead of just constraining morality to abstract concepts, Levi’s instituted the first written corporate code of conduct for its employees and partners. Titled the Worldwide Code of Business Conduct, this guideline outlines five basic principles to successfully integrate morality into the following corporate processes: upholding integrity, employee interactions, asset protection, trading or investment, and interactions with external entities. Taking its ethical mission one step further, Levi’s also runs a 24/7 “Ethics & Compliance” reportline that provides a confidential and reliable route for employees to report unethical behavior.  

For Levi’s, maintaining a moral compass is not merely supplemental to its operations, but rather, principal. Levi’s moral obligations extend past its corporate boundaries to all stakeholders and partnering entities. While examining a contractual relationship with factories in China, Levi’s found transgressions including overtime work and the underpayment and abuse of factory workers. The company promptly ended operations within China in 1993. In a similar case, Levi’s ended relations with Willie Tan, Saipan’s largest clothing manufacturer, when an investigation revealed inhumane treatment of the island’s factory workers. Even though Levi’s could generate a substantially larger profit through cheap sweatshop labor, the company consistently has chosen rectitude over revenue. As one of the first to disclose its suppliers and its factory locations, Levi’s creates full transparency for its stakeholders and global audience.

On a worldwide scale, the blue jeans manufacturer also raises awareness about HIV / AIDS, recently fundraising over $55,000 for the cause. To reduce its carbon footprint, the manufacturing giant created Tailor shops where customers can repair and resize old pairs of jeans. Levi’s also collects denim from all brands to recycle and reuse.

In proving that economic success is possible through ethical means, Levi’s has paved the way for companies that are stuck choosing between revenue and ethics. While profit and social responsibility are traditionally perceived as tradeoffs to one another, they have been shown to synergistically complement each other in more recent years. In ethically top-ranked corporations such as Levi’s, Volvo, PepsiCo, and L’Oréal, among several others, morality is king and is crucial to their financial success.

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