The Dow Jones Sustainability Indices (DJSI) launched in 1999, are a family of indices evaluating the sustainability performance of thousands of companies trading publicly, operated under a strategic partnership between S&P Dow Jones Indices and RobecoSAM (Sustainable Asset Management) [1] of the S&P Dow Jones Indices. They are the longest-running global sustainability benchmarks worldwide and have become the key reference point in sustainability investing for investors and companies alike.[ citation needed ] In 2012, S&P Dow Jones Indices was formed via the merger of S&P Indices and Dow Jones Indexes. [2]
The DJSI is based on an analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices. The trend is to reject companies that do not operate in a sustainable and ethical manner. It includes general as well as industry-specific sustainability criteria for each of the 60 industries defined according to the Industry Classification Benchmark (ICB).
The DJSI family contains one main global index, the DJSI World, and various indexes based on geographic regions such as: Europe, Nordic, North America and Asia Pacific. [3] The DJSI also contains industry-specific indexes called "blue chip indexes". In addition, the DJSI methodology facilitates the design, development and delivery of customized sustainability indexes; e.g., indexes covering different regions, indexes covering different segments of the leading sustainability companies, indexes covering additional exclusion criteria and indexes denominated in different currencies. [4]
To be incorporated in the DJSI, companies are assessed and selected based on their long-term economic, social and environmental asset management plans. Selection criteria evolve each year and companies must continue to make improvements to their long-term sustainability plans in order to remain on the Index. Indexes are updated yearly and companies are monitored throughout the year. [4]
Indexes are denominated in both US dollars and Euros and are calculated using the Laspeyres formula. All indexes that are not subsets include companies that generate revenue from alcohol, tobacco, gambling, armaments and firearms, and adult entertainment. Index components are based on free-float market capitalization and most main indexes are reviewed quarterly, excluding the world index. Customized indexes are continuously being developed and delivered to encompass different regions or individualized sections of companies to add additional exclusions when needed and to change the currencies they are denoted in.
The DJSI have been divided into various benchmarks including the World, Europe, North America, Asia Pacific, Nordic, and Korean indexes. [11]
The World Index, or DJSI World, was first published in September 1999. It is based on the largest 2,500 companies in the Dow Jones Global Total Stock Market Index (DJGTSMI). It covers the top-ten percent of these companies in terms of economic, environmental, and social criteria which equals about 300 companies. The DJSI World has two subset indexes, which are the Dow Jones Sustainability Index World 80 (DJSI World 80) and the Dow Jones Sustainability Index World ex US 80 (DJSI World ex US 80). Both subsets were initially published in August 2008 and track the performance of the largest 80 companies globally in terms of sustainability, with the DJSI World ex US 80 excluding the US from the top 80. The DJSI World and its subset are all reviewed on an annual basis.
The ICB breakdown is shown here, with consumer discretionary being the most represented sector. [12]
Country | Company [12] | Sector |
---|---|---|
Australia | ANZ Group Holdings Limited | Financials |
Australia | Brambles Limited | Industrials |
Australia | Dexus | Real estate |
Australia | Fortescue (company) | Basic materials |
Australia | GPT Group | Real estate |
Australia | National Australia Bank Limited | Financials |
Australia | Stockland | Real estate |
Australia | Transurban Group | Industrials |
Australia | Vicinity Centres | Real estate |
Australia | Woodside Energy | Energy |
Austria | OMV Aktiengesellschaft | Energy |
Belgium | Warehouses De Pauw SA | Real estate |
Brazil | Banco Bradesco S.A. | Financials |
Brazil | Banco do Brasil S.A. | Financials |
Brazil | Companhia Energética de Minas Gerais - CEMIG | Utilities |
Brazil | Itaú Unibanco Holding S.A. | Financials |
Brazil | Itaúsa | Financials |
Brazil | Klabin S.A. | Basic materials |
Brazil | Lojas Renner | Consumer discretionary |
Brazil | Rumo S.A. | Industrials |
Canada | Canadian National Railway Company | Industrials |
Canada | Canadian Pacific Kansas City Limited | Industrials |
Canada | Kinross Gold Corporation | Basic materials |
Canada | Teck Resources Limited | Basic materials |
Chile | Falabella (retail store) | Consumer discretionary |
Chile | Sociedad Química y Minera de Chile S.A. | Basic materials |
China | JD.com | Consumer discretionary |
China | Kanzhun Limited | Consumer discretionary |
China | Tencent Holdings Limited | Consumer discretionary |
China | WuXi AppTec | Health care |
China | WuXi Biologics (Cayman) Inc. | Health care |
China | Yum China Holdings, Inc. | Consumer discretionary |
Colombia | Bancolombia | Financials |
Colombia | Grupo Argos | Basic materials |
Colombia | Grupo Sura | Financials |
Colombia | Grupo Nutresa | Consumer staples |
Denmark | Vestas Wind Systems A/S | Consumer discretionary |
Finland | Kesko Oyj | Consumer staples |
Finland | Neste Oyj | Energy |
Finland | UPM-Kymmene Oyj | Basic materials |
Finland | Valmet Oyj | Consumer discretionary |
France | Alstom | Consumer discretionary |
France | Arkema | Basic materials |
France | AXA SA | Financials |
France | bioMérieux | Health care |
France | BNP Paribas SA | Financials |
France | Bureau Veritas | Industrials |
France | Carrefour SA | Consumer staples |
France | Covivio | Real estate |
France | Dassault Systèmes | Technology |
France | Engie | Utilities |
France | Kering SA | Consumer discretionary |
France | Publicis Groupe S.A. | Consumer discretionary |
France | Rexel | Consumer discretionary |
France | Sanofi | Health care |
France | Schneider Electric | Consumer discretionary |
France | Sodexo | Consumer discretionary |
France | TF1 | Consumer discretionary |
France | TotalEnergies SE | Energy |
France | Veolia | Utilities |
France | Wendel | Financials |
France | Worldline SA | Financials |
Germany | Allianz SE | Financials |
Germany | Deutsche Börse AG | Financials |
Germany | Deutsche Post AG | Industrials |
Germany | Deutsche Telekom AG | Telecommunications |
Germany | GEA Group | Consumer discretionary |
Germany | Hochtief | Consumer discretionary |
Germany | Hugo Boss AG | Consumer discretionary |
Germany | Infineon Technologies AG | Technology |
Germany | Lanxess | Basic materials |
Germany | Metro AG | Consumer staples |
Germany | Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft | Financials |
Germany | SAP SE | Technology |
Germany | Siemens Aktiengesellschaft | Consumer discretionary |
Hong Kong | Link Real Estate Investment Trust | Real estate |
Hong Kong | Swire Properties Limited | Real estate |
India | Dr. Reddy's Laboratories Limited | Health care |
India | Hindalco Industries | Basic materials |
India | JSW Steel | Basic materials |
India | Mahindra & Mahindra Limited | Consumer discretionary |
India | Tech Mahindra | Technology |
India | UPL Limited | Basic materials |
India | Vedanta Limited | Basic materials |
Ireland | Trane Technologies plc | Consumer discretionary |
Italy | Assicurazioni Generali S.p.A. | Financials |
Italy | Enel SpA | Utilities |
Italy | Hera Group | Utilities |
Italy | Intesa Sanpaolo | Financials |
Italy | Italgas | Utilities |
Italy | Iveco | Consumer discretionary |
Italy | Leonardo (company) | Consumer discretionary |
Italy | Moncler | Consumer discretionary |
Italy | Nexi | Financials |
Italy | Pirelli & C. S.p.A. | Consumer discretionary |
Italy | Poste Italiane S.p.A. | Financials |
Italy | Prysmian S.p.A. | Consumer discretionary |
Italy | Saipem | Energy |
Italy | Snam | Utilities |
Italy | Terna S.p.A. | Utilities |
Japan | Ajinomoto Co., Inc. | Consumer staples |
Japan | ANA Holdings | Industrials |
Japan | Bridgestone Corporation | Consumer discretionary |
Japan | Chugai Pharmaceutical Co. | Health care |
Japan | Dentsu | Consumer discretionary |
Japan | Fujitsu Limited | Technology |
Japan | Honda Motor Co., Ltd. | Consumer discretionary |
Japan | ITOCHU Corporation | Consumer discretionary |
Japan | Komatsu Limited | Consumer discretionary |
Japan | Lixil Group | Consumer discretionary |
Japan | LY Corporation | Consumer discretionary |
Japan | Marui | Financials |
Japan | Meiji Holdings | Consumer staples |
Japan | Mitsubishi Chemical Group | Basic materials |
Japan | Mitsubishi Heavy Industries, Ltd. | Consumer discretionary |
Japan | Mitsui & Co., Ltd. | Consumer discretionary |
Japan | Nabtesco Corporation | Consumer discretionary |
Japan | Nikon Corporation | Consumer discretionary |
Japan | Nippon Prologis REIT, Inc. | Real estate |
Japan | Nissin Foods | Consumer staples |
Japan | Nomura Holdings, Inc. | Financials |
Japan | Nomura Research Institute | Technology |
Japan | NTT Data | Technology |
Japan | Olympus Corporation | Health care |
Japan | OMRON Corporation | Technology |
Japan | Ono Pharmaceutical | Health care |
Japan | Ricoh Company, Ltd. | Technology |
Japan | Sekisui Chemical Co., Ltd. | Consumer discretionary |
Japan | Sekisui House | Consumer discretionary |
Japan | Seven & i Holdings Co., Ltd. | Consumer staples |
Japan | Shiseido Company, Limited | Consumer discretionary |
Japan | SoftBank Corp. | Telecommunications |
Japan | Sojitz Corporation | Consumer discretionary |
Japan | Sumitomo Forestry | Consumer discretionary |
Japan | Sysmex Corporation | Health care |
Japan | Toppan | Industrials |
Japan | Toto Ltd. | Consumer discretionary |
Japan | Yokogawa Electric Corporation | Technology |
Macao | Sands China Ltd. | Consumer discretionary |
Malaysia | Petronas | Basic materials |
Netherlands | ASML Holding N.V. | Technology |
Netherlands | ASR Nederland | Financials |
Netherlands | Ferrovial | Consumer discretionary |
Netherlands | Koninklijke Ahold Delhaize N.V. | Consumer staples |
Netherlands | NN Group | Financials |
Netherlands | PostNL N.V. | Industrials |
Netherlands | Randstad NV | Industrials |
Netherlands | Signify N.V. | Consumer discretionary |
Norway | Storebrand | Financials |
Portugal | EDP Group | Utilities |
Portugal | Galp Energia | Energy |
Republic of Korea | Doosan Enerbility | Consumer discretionary |
Republic of Korea | Hana Financial Group Inc. | Financials |
Republic of Korea | Hyundai Engineering & Construction | Consumer discretionary |
Republic of Korea | Hyundai Glovis | Industrials |
Republic of Korea | Hyundai Mobis | Consumer discretionary |
Republic of Korea | Hyundai Motor Company | Consumer discretionary |
Republic of Korea | Hyundai Steel | Basic materials |
Republic of Korea | Kakao Corp. | Consumer discretionary |
Republic of Korea | KB Financial Group Inc. | Financials |
Republic of Korea | Kia Corporation | Consumer discretionary |
Republic of Korea | LG Electronics Inc. | Consumer discretionary |
Republic of Korea | LG Household & Health Care | Consumer discretionary |
Republic of Korea | Mirae Asset Securities | Financials |
Republic of Korea | Samsung Biologics | Health care |
Republic of Korea | Samsung C&T Corporation | Consumer discretionary |
Republic of Korea | Samsung Electro-Mechanics | Technology |
Republic of Korea | Samsung SDI Co., Ltd. | Technology |
Republic of Korea | Samsung Securities Co., Ltd. | Financials |
Republic of Korea | Shinhan Financial Group Co., Ltd. | Financials |
Republic of Korea | SK Inc. | Consumer discretionary |
Republic of Korea | SK Telecom Co., Ltd. | Telecommunications |
Republic of Korea | S-Oil | Energy |
Singapore | CapitaLand | Real estate |
Singapore | Keppel Corporation Limited | Consumer discretionary |
Singapore | Wilmar International Limited | Consumer staples |
South Africa | Exxaro | Energy |
South Africa | Gold Fields Limited | Basic materials |
Spain | Acciona | Utilities |
Spain | AENA | Industrials |
Spain | Amadeus IT Group | Consumer discretionary |
Spain | Banco Bilbao Vizcaya Argentaria, S.A. | Financials |
Spain | Banco Santander, S.A. | Financials |
Spain | Bankinter | Financials |
Spain | CaixaBank | Financials |
Spain | Enagás | Utilities |
Spain | Endesa, S.A. | Utilities |
Spain | Grifols | Health care |
Spain | Iberdrola | Utilities |
Spain | Indra Sistemas | Technology |
Spain | Inditex | Consumer discretionary |
Spain | Merlin Properties | Real estate |
Spain | Red Eléctrica Corporación | Utilities |
Sweden | Billerud | Basic materials |
Sweden | Castellum AB (publ) | Real estate |
Sweden | EQT AB | Financials |
Sweden | H&M | Consumer discretionary |
Sweden | Viaplay Group | Consumer discretionary |
Switzerland | Coca-Cola HBC AG | Consumer staples |
Switzerland | Partners Group | Financials |
Switzerland | Roche Holding AG | Health care |
Switzerland | SGS S.A. | Industrials |
Switzerland | Sonova | Health care |
Switzerland | STMicroelectronics N.V. | Technology |
Switzerland | Temenos AG | Technology |
Switzerland | UBS Group AG | Financials |
Taiwan | Advantech Co., Ltd. | Technology |
Taiwan | ASE Technology Holding Co., Ltd. | Technology |
Taiwan | Cathay Financial Holding Co., Ltd. | Financials |
Taiwan | Chailease Holding Company Limited | Financials |
Taiwan | Chang Hwa Bank | Financials |
Taiwan | China Development Financial Holding Corporation | Financials |
Taiwan | Chunghwa Telecom Co., Ltd. | Telecommunications |
Taiwan | CTBC Financial Holding | Financials |
Taiwan | Delta Electronics | Technology |
Taiwan | E Ink | Technology |
Taiwan | E.SUN Commercial Bank | Financials |
Taiwan | Far EasTone | Telecommunications |
Taiwan | First Financial Holding Co., Ltd. | Financials |
Taiwan | Fubon Financial Holding Co., Ltd. | Financials |
Taiwan | InnoLux Corporation | Technology |
Taiwan | Lite-On | Technology |
Taiwan | Mega International Commercial Bank | Financials |
Taiwan | Nanya Technology Corporation | Technology |
Taiwan | President Chain Store Corporation | Consumer staples |
Taiwan | Shin Kong Group | Financials |
Taiwan | SinoPac Financial Holdings Company Limited | Financials |
Taiwan | Taishin Financial Holdings | Financials |
Taiwan | Taiwan Cooperative Bank | Financials |
Taiwan | Taiwan Mobile | Telecommunications |
Taiwan | Taiwan Semiconductor Manufacturing Company Limited | Technology |
Taiwan | The Shanghai Commercial and Savings Bank | Financials |
Taiwan | United Microelectronics Corporation | Technology |
Taiwan | Vanguard International Semiconductor Corporation | Technology |
Taiwan | WIN Semiconductors Corp. | Technology |
Taiwan | Yuanta Securities | Financials |
Thailand | Advanced Info Service | Telecommunications |
Thailand | Airports of Thailand Public Company Limited | Industrials |
Thailand | Bangkok Dusit Medical Services | Health care |
Thailand | Central Pattana | Real estate |
Thailand | Central Retail Corporation | Consumer discretionary |
Thailand | CP All | Consumer staples |
Thailand | Delta Electronics | Technology |
Thailand | Indorama Ventures Public Company Limited | Basic materials |
Thailand | Kasikornbank | Financials |
Thailand | PTT Exploration and Production | Energy |
Thailand | PTT Global Chemical Public Company Limited | Basic materials |
Thailand | PTT Public Company Limited | Energy |
Thailand | Siam Commercial Bank | Financials |
Thailand | Siam Cement Group | Basic materials |
Thailand | ThaiBev | Consumer staples |
United Kingdom | Abrdn | Financials |
United Kingdom | Anglo American plc | Basic materials |
United Kingdom | Aviva plc | Financials |
United Kingdom | CNH Industrial N.V. | Consumer discretionary |
United Kingdom | Diageo plc | Consumer staples |
United Kingdom | GSK plc | Health care |
United Kingdom | Informa plc | Consumer discretionary |
United Kingdom | International Distributions Services plc | Industrials |
United Kingdom | Land Securities Group plc | Real estate |
United Kingdom | Linde plc | Basic materials |
United Kingdom | Pearson plc | Consumer discretionary |
United Kingdom | Reckitt Benckiser Group plc | Consumer discretionary |
United Kingdom | RELX PLC | Industrials |
United Kingdom | Rolls-Royce Holdings plc | Consumer discretionary |
United Kingdom | United Utilities | Utilities |
United Kingdom | WH Smith PLC | Consumer discretionary |
United States | Abbott Laboratories | Health care |
United States | AbbVie Inc. | Health care |
United States | Adobe Inc. | Technology |
United States | Agilent Technologies, Inc. | Health care |
United States | Alphabet Inc. | Consumer discretionary |
United States | American Airlines Group Inc. | Industrials |
United States | Autodesk, Inc. | Technology |
United States | Biogen Inc. | Health care |
United States | Cisco Systems, Inc. | Technology |
United States | Cummins Inc. | Consumer discretionary |
United States | CVS Health Corporation | Health care |
United States | DaVita Inc. | Health care |
United States | Dow Inc. | Basic materials |
United States | eBay Inc. | Consumer discretionary |
United States | Ecolab Inc. | Basic materials |
United States | Edwards Lifesciences Corporation | Health care |
United States | Elevance Health, Inc. | Health care |
United States | Fortinet | Technology |
United States | General Mills, Inc. | Consumer staples |
United States | Gilead Sciences, Inc. | Health care |
United States | Healthpeak Properties, Inc. | Real estate |
United States | Hess Corporation | Energy |
United States | Hilton Worldwide Holdings Inc. | Consumer discretionary |
United States | Host Hotels & Resorts, Inc. | Real estate |
United States | HP Inc. | Technology |
United States | Illumina, Inc. | Health care |
United States | Ingersoll Rand | Consumer discretionary |
United States | Jacobs Solutions Inc. | Industrials |
United States | Las Vegas Sands Corp. | Consumer discretionary |
United States | Lockheed Martin Corporation | Consumer discretionary |
United States | Medtronic plc | Health care |
United States | Microsoft Corporation | Technology |
United States | Mondelez International | Consumer staples |
United States | Moody's Corporation | Financials |
United States | Newmont Corporation | Basic materials |
United States | Northrop Grumman Corporation | Consumer discretionary |
United States | Oshkosh Corporation | Consumer discretionary |
United States | Owens Corning | Consumer discretionary |
United States | Philip Morris International Inc. | Consumer staples |
United States | Prologis, Inc. | Real estate |
United States | Regeneron Pharmaceuticals, Inc. | Health care |
United States | Republic Services, Inc. | Industrials |
United States | S&P Global Inc. | Financials |
United States | Salesforce, Inc. | Technology |
United States | ServiceNow, Inc. | Technology |
United States | Snap Inc. | Consumer discretionary |
United States | Spirit AeroSystems Holdings, Inc. | Consumer discretionary |
United States | The Cigna Group | Health care |
United States | The Gap, Inc. | Consumer discretionary |
United States | The Williams Companies, Inc. | Energy |
United States | Union Pacific Corporation | Industrials |
United States | UnitedHealth Group Incorporated | Health care |
United States | Waste Management, Inc. | Industrials |
United States | Whirlpool Corporation | Consumer discretionary |
The Dow Jones Sustainability Europe Index covers the leading 20 percent of the largest 600 European companies in terms of sustainability from the DJGTSMI. It is subset by three different more specific indexes for the region, the main subset being the Dow Jones Sustainability Eurozone Index (DJSI Eurozone). This index tracks the financial performance of sustainability leaders in the smaller eurozone region. Both indexes were launched in August 2010 and have their own further subset. The two subsets are the Dow Jones Sustainability Europe 40 Index (DJSI Europe 40) and the Dow Jones Sustainability Eurozone 40 Index (DJSI Eurozone 40), both of which were also launched in August 2010. These track the top-40 sustainability leaders in Europe and the smaller Eurozone region. DJSI Europe and eurozone are reviewed annually as well as quarterly to maintain accuracy of the index composition while the DJSI Europe 40 and DJSI Eurozone 40 are reviewed only annually.
The Dow Jones Sustainability North American Index has a similar design as the DJSI Europe and also reviews the top-20 percent of the 600 largest companies, but in this case in North America. It was originally launched, along with its subset Dow Jones Sustainability United States Index (DJSI United States), in September 2005. Both indexes are further broken down by the Dow Jones Sustainability North America 40 Index (DJSI North America 40) and the Dow Jones Sustainability United States 40 Index (DJSI United States 40), which cover the leading 40 sustainability driven companies in North America and the United States, respectively. Both subsets, however, were not launched until August 2008, three years after the DJSI North America.
The Dow Jones Sustainability Asian Pacific Index (DJSI Asia Pacific) was launched at the same time as its single subset, the Dow Jones Sustainability Asia Pacific 40 Index (DJSI Asia Pacific 40), in January 2009. As of 2009, the DJSI Asia Pacific included 122 companies and captures the leading 20 percent of the top-600 companies in developed Asia Pacific Markets in terms of sustainability as derived from the DJGTSMI. DJSI Asia Pacific 40, the subset, tracks the largest 40 companies who are sustainability leaders in the Asia Pacific region.
The Dow Jones Sustainability Korea Index (DJSI Korea) is derived from the smallest pool of companies, tracking the most sustainable 30 percent of the largest 200 Korean companies. The DJSI Korea was launched in October 2009, along with its subset the Dow Jones Sustainability Korea 20 Index (DJSI Korea 20). As of that date, 41 companies were included in the DJSI Korea. DJSI Korea 20 encompasses the largest 20 sustainable leading companies in the region. The index encompasses a smaller region than the other indexes resulting in a higher percentage of companies analyzed and a lower number of companies that are reviewed in the subset. The DJSI Korea is also reviewed on an annual and quarterly basis, whereas the DJSI Korea 20 is reviewed annually.
A defined set of criteria is used to assess the economic, social, and environmental opportunities of the companies that the DJSI has listed, which are chosen based on the Corporate Sustainability Assessment by RobecoSAM. Information comes from the annual RobecoSAM questionnaire (the Corporate Sustainability Assessment), company documentation, the Media and Stakeholder Analysis (an examination of media coverage, stakeholder commentaries and other publicly available sources provided by RepRisk ESG Business Intelligence), and personal contact with the companies. Industry leaders from RobecoSAM Research's Corporate Sustainability Assessment are chosen to be listed on the DJSI. [4]
Once a company is listed on the DJSI, it is monitored daily for any critical arising issues, which can lead to the exclusion of the company if deemed critical enough. Examples of events that would lead to exclusion include: commercial practices, human rights abuses, layoffs or worker disputes, or catastrophic disasters. This monitoring is supported by RepRisk, a global research firm and provider of environmental, social and governance (ESG) risk data. RepRisk screens media outlets, stakeholder groups and other publicly available sources to identify risks related to these issues. The information gathered is then systematically analyzed and quantified. If a critical event happens, the situation is analyzed by RobecoSAM for the scope in which it reaches. If large enough, the event will be analyzed further based on severity, media coverage, and crisis management. RobecoSAM analysts decide from here whether the company will be excluded from the DJSI. An assurance report is completed by Deloitte to ensure the validity of the company's information. [4]
In early 2009, an independent expert study commissioned by the United Nations Environment Programme Finance Initiative (UNEP FI) and presented at the World Economic Forum in Davos, highlighted the SAM assessment as "the most rigorous in terms of the number of questions and depth of information requested". [13]
In 2009, SAM carried out its 11th-consecutive Corporate Sustainability Assessment, assessing more than 1,200 companies, an increase of eight percent from 2008. At the onset of DJSI's assessment criteria, SAM mainly focused on government compliance and regulations. It has evolved to embrace corporate sustainability as a key competitive advantage, taking into account nine specific criteria in addition to industry-specific criteria. Below are the criteria and weightings SAM uses to assess a company's overall score. [14]
Criteria | Weightings |
---|---|
|
|
These weightings are approximations, and actual weightings may differ between industries. A breakdown of these dimensions is seen below. [14]
Economic dimension | Weightings in percentage |
---|---|
Corporate governance | 6.0 |
Risk and crisis management | 6.0 |
Codes of conduct/compliance/anti-corruption and bribery | 6.0 |
Industry-specific criteria | Depends on industry |
Environmental dimension | Weightings in percentages |
---|---|
Environmental reporting | 3.0 |
Industry-specific criteria | Depends on industry |
Social dimension | Weightings in percentages |
---|---|
Human-capital development | 5.5 |
Talent attraction and retention | 5.5 |
Labor practice indicators | 5.0 |
Corporate citizenship / philanthropy | 3.0 |
Social reporting | 3.0 |
Industry-specific criteria | Depends on industry |
Number of invited companies in 2010: [15]
Some of the assessment criteria have varied slightly from year to year to reflect growing information about particular issues such as water related risks, brand management, corporate citizenship, risk and crisis management. Continuous improvement allows for SAM to provide both relevant and current information.
Since 1999, SAM's Corporate Sustainability Assessment has increased in number of assessed companies, number of sectors, number of questions to companies, average totally sustainability score, and weight of sector-specific criteria in percentage total weight. [16]
1999 | 2009 | |
---|---|---|
Number of assessed companies | 468 | 1,237 |
Number of sectors | 68 | 58 |
Number of questions to companies | 50 | 100 |
Average total sustainability score (out of 100) | 27 | 48 |
Weight of sector-specific criteria (in % of total weight) | 30 | 57 |
Included in the most recent SAM questionnaire are more difficult to measure intangible business attributes such as innovation and customer relationship management. Questions are both directed at short-term risks and opportunities and sustainable long-term value creation. [16] The intensity of the industry-specific criteria has continuously increased. In 1999, industry-specific information accounted for only 30 percent of the overall score, while now it accounts for nearly 60 percent.
From these questionnaires, each company can be awarded one or a combination of the following status: [16]
SAM uses four sources of information to assess corporate sustainability: company questionnaire (the Corporate Sustainability Assessment), company documentation, Media and Stakeholder Analysis, and contact with companies. [17] [18]
Information source | Who provides them | What type of documents |
---|---|---|
Company questionnaire | companies | SAM distributes sector-specific questionnaires to each company. Companies complete and sign the questionnaire. SAM analysts validate responses. The responses are further verified by PricewaterhouseCoopers, an external resource. |
Company documentation | companies | Documents requested from companies include sustainability reports, environmental reports, health and safety reports, social reports, annual financial reports, special reports (e.g., on intellectual capital management, corporate governance), and all other sources of company information. |
Media and stakeholder analysis | RepRisk ESG Business Intelligence | A variety of third-party sources and external stakeholders, including print and online news articles, stakeholder commentaries from NGOs, governmental agencies, think tanks, social media and others, as well as other publicly assessable sources. [19] [20] |
Company contact | company and SAM | Discussions and phone conversations with company representatives. |
Using self-reported data as proxies for the social or environmental effects the DJSI intends to reflect leaves the index exposed to corporate biases and additional credibility risks. It rewards companies with greatest capacity to respond to SAM's questionnaires and information requests rather than those with the best socially responsible practices. [21] Secondly, relying on self-reported data carries substantial risks since information from companies may not be completely credible. An index based on biased information often underestimates real risk factors in the listed companies' operation, even in those instances when submitted information if verified by an auditing firm such as PricewaterhouseCoopers, KPMG, etc. Ultimately, companies with challenging corporate environmental and social issues are more likely to devote public relations resources to minimize the perception of risk within their operations. In order to address some of this feedback, RobecoSAM added a Media and Stakeholder Analysis component to the annual Corporate Sustainability Assessment, in order to complement and help corroborate the questionnaire and documentation provided by the participating companies. For the MSA, RobecoSAM works with RepRisk, a global research firm specialized in risk analytics and metrics related to environmental, social and governance (ESG) issues. RepRisk screens media outlets, stakeholder groups and other publicly available sources to identify risks, which are then systematically analyzed and quantified. [20]
It has been also found that in the DJSI the three dimensions of sustainability are not considered in a balanced way, being biased towards economic criteria to the disadvantage of social and environmental ones. A further bias of the DJSI is that it only includes large companies, whereas other indices include smaller companies as well. As a consequence of these limitations, a survey conducted among sustainability experts found that only 48 percent considered the DJSI as "highly trusted". [22]
Dow Jones is a combination of the names of business partners Charles Dow and Edward Jones.
CLP Group and its holding company, CLP Holdings Ltd, also known as China Light and Power Company, Limited, is an electricity company in Hong Kong. Incorporated in 1901 as China Light & Power Company Syndicate, its core business remains the generation, transmission, and retailing of electricity. It also has businesses in a number of Asian markets as well as EnergyAustralia in Australia. It is one of the two main electricity power generation companies in Hong Kong, the other being Hongkong Electric Company.
Companhia Energética de Minas Gerais S.A. is a Brazilian power company headquartered in Belo Horizonte, capital of the state of Minas Gerais. The company is one of the main electricity concessionaires in Brazil. It operates in the areas of generation, transmission, distribution and commercialization of electric energy and also in the distribution of natural gas. The company is responsible for 12% of the Brazil's distribution. It is the fourth-largest electricity company in Brazil by revenue after Eletrobras, Energisa and CPFL Energia.
SGS is a Swiss multinational company headquartered in Geneva, which provides inspection, verification, testing and certification services. Its 99,600 employees operate a network of 2,600 offices and laboratories worldwide. It ranked on Forbes Global 2000 in 2015, 2016, 2017, 2020 and 2021.
Reynolds American, Inc. is an American tobacco company which is a subsidiary of British American Tobacco and is the second-largest tobacco company in the United States. Its holdings include R. J. Reynolds Tobacco Company, American Snuff Company, Santa Fe Natural Tobacco Company, and Niconovum AB.
The S&P Global 1200 Index is a free-float weighted stock market index of global equities from Standard & Poor's. The index was launched on Sep 30, 1999 and covers 31 countries and approximately 70 percent of global stock market capitalization. It is composed of seven regional indices:
The EURO STOXX 50 is a stock index of Eurozone stocks designed by STOXX, an index provider owned by Deutsche Börse Group. The index is composed of 50 stocks from 11 countries in the Eurozone.
The Dow Jones Global Indexes (DJGI) is a family of international equity indexes, including world, region, and country indexes and economic sector, market sector, industry-group, and subgroup indexes created by Dow Jones Indexes a unit of Dow Jones & Company best known for the Dow Jones Industrial Average.
Banpu Public Company Limited is an energy company based in Thailand. Its three core businesses are energy resources ; energy generation ; and energy technology. As of 2015 Banpu is headed by CEO Somruedee Chaimongkol. In the 2012 Forbes Global 2000, Banpu was ranked as the 1707th -largest public company in the world.
S&P Dow Jones Indices LLC is a joint venture between S&P Global, the CME Group, and News Corp that was announced in 2011 and later launched in 2012. It produces, maintains, licenses, and markets stock market indices as benchmarks and as the basis of investable products, such as exchange-traded funds (ETFs), mutual funds, and structured products. The company currently has employees in 15 cities worldwide, including New York, London, Frankfurt, Singapore, Hong Kong, Sydney, Beijing, and Dubai.
STOXX Ltd. is a global index provider, covering the world's markets across various asset classes – developing, maintaining, distributing and marketing a comprehensive global family of strictly rules-based and transparent indices. STOXX, headquartered in Zug with key locations in New York, Eschborn and London, is part of ISS STOXX which is part of Deutsche Börse Group. STOXX calculates more than 17,000 indices and in addition acts as the administrator for the DAX indices.
In finance, a stock index, or stock market index, is an index that measures the performance of a stock market, or of a subset of a stock market. It helps investors compare current stock price levels with past prices to calculate market performance.
Robeco Schweiz is an international investment company with a specific focus on sustainability investments. It was founded in 1995 by Reto Ringger. The company is based in Zurich, Switzerland, and considers economic, environmental, and social criteria in its investment strategies. In addition to asset management, the company has an indexes and private equity portion of the business. In 2006 RobecoSAM introduced a division called sustainability services that provides sustainability benchmarking reports to companies. In 2001, the then-RobecoSAM became the first carbon neutral company in Switzerland.
The FTSE4Good Index Series is a series of ethical investment stock market indices launched in 2001 by the FTSE Group which reports on the performance of companies which demonstrate "strong Environmental, Social and Governance practices". A number of stock market indices are available, for example covering UK shares, US shares, European markets and Japan, with inclusion based on a range of corporate social responsibility criteria. Research for the indices is supported by the Ethical Investment Research Services (EIRIS). The index excludes companies due to their involvement in tobacco production, weapons, or coal power industry and rates companies for inclusion based environmental sustainability, relationships with stakeholders, attitudes to human rights, supply chain labour standards and the countering of bribery.
Thai Union Group PCL is a Thailand-based producer of seafood based products. It was founded in 1977, and was listed on the Stock Exchange of Thailand (SET) on 22 November 1994.
Kimberly-Clark de México(KCM) is a Mexican company that engages in the manufacture and commercialization of disposable products for daily use by consumers within and away-from home in Mexico and internationally. The company's products include diapers and childcare products, feminine pads, incontinence care products, bath tissue, napkins, facial tissue, hand and kitchen towels, wet wipes and health care products. Today the company has 8 000 direct employees and over 10 thousand indirect jobs.
PTT Global Chemical, also known as PTTGC, is a petrochemical company that specializes in synthesizing olefins and aromatics. It was founded in 2011 and is a subsidiary of PTT Public Company Limited.
RepRisk AG is an environmental, social, and corporate governance (ESG) data science company based in Zurich, Switzerland, specializing in ESG and business-conduct risk research, and quantitative solutions.
Donald W. “Don” Slager is the former Chief Executive Officer of Republic Services, Inc., in the recycling and waste services business. The Company generates $10 billion of annual revenue, has a market cap exceeding $23+ billion and operates the 7th largest vocational fleet in the nation. Don has more than 35 years of experience in the industry, starting his career as a teenager and subsequently working at all levels within the organization. He had served Republic for over 30 years. Slager retired and Jon Vander Ark was appointed the position of CEO on June 26, 2021 following a well executed succession plan.