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Dow Jones Sustainability Indices

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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]

History

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  • 1999: The DJSI are launched in September. It is a collaboration with SAM and the Dow Jones Indexes. SAM is a global investment company focused exclusively on sustainability investing.[5] The indexes are created to track financial success of leading sustainability companies. The top-ten percent of the best scoring companies of the largest 2,500 companies listed on Dow Jones are included.
  • 2001: The DJSI is expanded to include STOXX Ltd., another indexing company. The Dow Jones STOXX Sustainability Index is introduced and marketed towards Europe's sustainability leaders.[6]
  • 2005: The Dow Jones Sustainability North America Index is created.
  • 2006: Dow Jones Indexes and SAM launch the Dow Jones Islamic Market Sustainability Index that combines Islamic investing principles and sustainability criteria from the DJSI.[7]
  • 2009: The Dow Jones Sustainability Asia Pacific Index and Korea Index are launched.[8]
  • 2010: SAM and Dow Jones Indexes terminate collaboration with STOXX. "Dow Jones Indexes will be responsible for calculation, marketing and distribution of the indexes including the European Indexes, while SAM [will] remain responsible for the component selections. As a result, SAM's collaboration with STOXX Ltd., which had previously calculated the European STOXX Sustainability Indexes, has been terminated."[9]
  • 2010: SAM and Dow Jones Indexes launch the DJSI Nordic Index.[10]
  • 2012: The S&P Indices and Dow Jones Indexes are merged to form the S&P Dow Jones Indices.[2]

Indexes

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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]

DJSI World Index

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Dow Jones Sustainability Indices is located in Earth
Australia
Australia
Austria
Austria
Belgium
Belgium
Brazil
Brazil
Canada
Canada
Chile
Chile
China
China
Colombia
Colombia
Denmark
Denmark
Finland
Finland
France
France
Germany
Germany
Hong Kong
Hong Kong
India
India
Ireland
Ireland
Italy
Italy
Japan
Japan
Korea
Korea
Macao
Macao
Malaysia
Malaysia
Netherlands
Netherlands
Norway
Norway
Portugal
Portugal
Singapore
Singapore
South Africa
South Africa
Spain
Spain
Sweden
Sweden
Switzerland
Switzerland
Taiwan
Taiwan
Thailand
Thailand
UK
UK
USA
USA
32 countries are represented in the World Index as of December 2023.[12]

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.

  Technology (11%)
  Telecommunications (2%)
  Health Care (9%)
  Financials (18%)
  Real Estate (5%)
  Consumer Discretionary (25%)
  Consumer Staples (6%)
  Industrials (7%)
  Basic Materials (8%)
  Energy (4%)
  Utilities (5%)

The ICB breakdown is shown here, with consumer discretionary being the most represented sector.[12] Companies in bold represent the top ten holdings by index weight.

Country Company[12] Sector
Australia ANZ Bank Financials
Australia Brambles Industrials
Australia Dexus Real estate
Australia Fortescue Basic materials
Australia GPT Group Real estate
Australia National Australia Bank Financials
Australia Stockland Real estate
Australia Transurban Industrials
Australia Vicinity Real estate
Australia Woodside Energy Energy
Austria OMV Aktiengesellschaft Energy
Belgium Warehouses De Pauw Real estate
Brazil Banco Bradesco Financials
Brazil Banco do Brasil Financials
Brazil CEMIG Utilities
Brazil Itaú Unibanco Financials
Brazil Itaúsa Financials
Brazil Klabin Basic materials
Brazil Lojas Renner Consumer discretionary
Brazil Rumo Logística Industrials
Canada Canadian National Industrials
Canada CPKC Industrials
Canada Kinross Gold Basic materials
Canada Teck Resources Basic materials
Chile Falabella Consumer discretionary
Chile Sociedad Química y Minera Basic materials
China JD.com Consumer discretionary
China Kanzhun Consumer discretionary
China Tencent Consumer discretionary
China WuXi AppTec Health care
China WuXi Biologics Health care
China Yum China Consumer discretionary
Colombia Bancolombia Financials
Colombia Grupo Argos Basic materials
Colombia Grupo Sura Financials
Colombia Grupo Nutresa Consumer staples
Denmark Vestas Consumer discretionary
Finland Kesko Consumer staples
Finland Neste Energy
Finland UPM Basic materials
Finland Valmet Consumer discretionary
France Alstom Consumer discretionary
France Arkema Basic materials
France Axa Financials
France bioMérieux Health care
France BNP Paribas Financials
France Bureau Veritas Industrials
France Carrefour Consumer staples
France Covivio Real estate
France Dassault Systèmes Technology
France Engie Utilities
France Kering Consumer discretionary
France Publicis 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 Energy
France Veolia Utilities
France Wendel Financials
France Worldline Financials
Germany Allianz Financials
Germany Deutsche Börse Financials
Germany Deutsche Post Industrials
Germany Deutsche Telekom Telecommunications
Germany GEA Group Consumer discretionary
Germany Hochtief Consumer discretionary
Germany Hugo Boss Consumer discretionary
Germany Infineon Technologies Technology
Germany Lanxess Basic materials
Germany Metro Consumer staples
Germany Munich Re Financials
Germany SAP Technology
Germany Siemens Consumer discretionary
Hong Kong Link REIT Real estate
Hong Kong Swire Properties Real estate
India Dr. Reddy's Laboratories Health care
India Hindalco Industries Basic materials
India JSW Steel Basic materials
India Mahindra & Mahindra Consumer discretionary
India Tech Mahindra Technology
India UPL Basic materials
India Vedanta Basic materials
Ireland Trane Technologies Consumer discretionary
Italy Assicurazioni Generali Financials
Italy Enel Utilities
Italy Hera Group Utilities
Italy Intesa Sanpaolo Financials
Italy Italgas Utilities
Italy Iveco Consumer discretionary
Italy Leonardo Consumer discretionary
Italy Moncler Consumer discretionary
Italy Nexi Financials
Italy Pirelli Consumer discretionary
Italy Poste Italiane Financials
Italy Prysmian Consumer discretionary
Italy Saipem Energy
Italy Snam Utilities
Italy Terna Utilities
Japan Ajinomoto Consumer staples
Japan ANA Holdings Industrials
Japan Bridgestone Consumer discretionary
Japan Chugai Pharmaceutical Health care
Japan Dentsu Consumer discretionary
Japan Fujitsu Technology
Japan Honda Consumer discretionary
Japan Itochu Consumer discretionary
Japan Komatsu 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 Consumer discretionary
Japan Mitsui & Co Consumer discretionary
Japan Nabtesco Consumer discretionary
Japan Nikon Consumer discretionary
Japan Nippon Prologis REIT Real estate
Japan Nissin Foods Consumer staples
Japan Nomura Holdings Financials
Japan Nomura Research Institute Technology
Japan NTT Data Technology
Japan Olympus Corporation Health care
Japan Omron Technology
Japan Ono Pharmaceutical Health care
Japan Ricoh Technology
Japan Sekisui Chemical Consumer discretionary
Japan Sekisui House Consumer discretionary
Japan Seven & i Holdings Consumer staples
Japan Shiseido Consumer discretionary
Japan SoftBank Telecommunications
Japan Sojitz Consumer discretionary
Japan Sumitomo Forestry Consumer discretionary
Japan Sysmex Corporation Health care
Japan Toppan Industrials
Japan Toto Consumer discretionary
Japan Yokogawa Electric Technology
Macao Sands China Consumer discretionary
Malaysia Petronas Basic materials
Netherlands ASML Holding Technology
Netherlands ASR Nederland Financials
Netherlands Ferrovial Consumer discretionary
Netherlands Ahold Delhaize Consumer staples
Netherlands NN Group Financials
Netherlands PostNL Industrials
Netherlands Ranstad Industrials
Netherlands Signify 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 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 Consumer discretionary
Republic of Korea KB Financial Group Financials
Republic of Korea Kia Consumer discretionary
Republic of Korea LG Electronics 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 Technology
Republic of Korea Samsung Securities Financials
Republic of Korea Shinhan Financial Group Financials
Republic of Korea SK Consumer discretionary
Republic of Korea SK Telecom Telecommunications
Republic of Korea S-Oil Energy
Singapore CapitaLand Real estate
Singapore Keppel Corporation Consumer discretionary
Singapore Wilmar International Consumer staples
South Africa Exxaro Energy
South Africa Gold Fields Basic materials
Spain Acciona Utilities
Spain AENA Industrials
Spain Amadeus IT Group Consumer discretionary
Spain Banco Bilbao Vizcaya Argentaria Financials
Spain Banco Santander Financials
Spain Bankinter Financials
Spain CaixaBank Financials
Spain Enagás Utilities
Spain Endesa Utilities
Spain Grifols Health care
Spain Iberdrola Utilities
Spain Indra Sistemas Technology
Spain Inditex Consumer discretionary
Spain Merlin Properties Real estate
Spain Red Eléctrica de España Utilities
Sweden Billerud Basic materials
Sweden Castellum Real estate
Sweden EQT Financials
Sweden H&M Consumer discretionary
Sweden Viaplay Group Consumer discretionary
Switzerland Coca-Cola Hellenic Bottling Company Consumer staples
Switzerland Partners Group Financials
Switzerland Roche Health care
Switzerland SGS Industrials
Switzerland Sonova Health care
Switzerland STMicroelectronics Technology
Switzerland Temenos Technology
Switzerland UBS Financials
Taiwan Advantech Co Technology
Taiwan ASE Group Technology
Taiwan Cathay Financial Holding Co Financials
Taiwan Chailease Holding Company Financials
Taiwan Chang Hwa Bank Financials
Taiwan KGI Financial Holding Financials
Taiwan Chunghwa Telecom 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 Financials
Taiwan Fubon Financial Holding Co. Financials
Taiwan InnoLux 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 Financials
Taiwan Taishin Financial Holdings Financials
Taiwan Taiwan Cooperative Bank Financials
Taiwan Taiwan Mobile Telecommunications
Taiwan TSMC Technology
Taiwan Shanghai Commercial and Savings Bank Financials
Taiwan United Microelectronics Corporation Technology
Taiwan Vanguard International Semiconductor Corporation Technology
Taiwan WIN Semiconductors Technology
Taiwan Yuanta Securities Financials
Thailand Advanced Info Service Telecommunications
Thailand Airports of Thailand 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 Basic materials
Thailand Kasikornbank Financials
Thailand PTT Exploration & Production Energy
Thailand PTT Global Chemical Basic materials
Thailand PTT Public Company Energy
Thailand Siam Commercial Bank Financials
Thailand Siam Cement Group Basic materials
Thailand ThaiBev Consumer staples
United Kingdom Abrdn Financials
United Kingdom Anglo American Basic materials
United Kingdom Aviva Financials
United Kingdom CNH Industrial Consumer discretionary
United Kingdom Diageo Consumer staples
United Kingdom GSK Health care
United Kingdom Informa Consumer discretionary
United Kingdom International Distributions Services Industrials
United Kingdom Landsec Real estate
United Kingdom Linde Basic materials
United Kingdom Pearson Consumer discretionary
United Kingdom Reckitt Consumer discretionary
United Kingdom RELX Industrials
United Kingdom Rolls-Royce Holdings Consumer discretionary
United Kingdom United Utilities Utilities
United Kingdom WHSmith Consumer discretionary
United States Abbott Laboratories Health care
United States AbbVie Health care
United States Adobe Technology
United States Agilent Technologies Health care
United States Alphabet Consumer discretionary
United States American Airlines Group Industrials
United States Autodesk Technology
United States Biogen Health care
United States Cigna Health care
United States Cisco Technology
United States Cummins Consumer discretionary
United States CVS Health Health care
United States DaVita Health care
United States Dow Chemical Company Basic materials
United States eBay Consumer discretionary
United States Ecolab Basic materials
United States Edwards Lifesciences Health care
United States Elevance Health Health care
United States Fortinet Technology
United States Gap Consumer discretionary
United States General Mills Consumer staples
United States Gilead Sciences Health care
United States Healthpeak Properties Real estate
United States Hess Corporation Energy
United States Hilton Worldwide Consumer discretionary
United States Host Hotels & Resorts Real estate
United States HP Technology
United States Illumina Health care
United States Ingersoll Rand Consumer discretionary
United States Jacobs Solutions Industrials
United States Las Vegas Sands Consumer discretionary
United States Lockheed Martin Consumer discretionary
United States Medtronic Health care
United States Microsoft Technology
United States Mondelez International Consumer staples
United States Moody's Corporation Financials
United States Newmont Basic materials
United States Northrop Grumman Consumer discretionary
United States Oshkosh Corporation Consumer discretionary
United States Owens Corning Consumer discretionary
United States Philip Morris International Consumer staples
United States Prologis Real estate
United States Regeneron Pharmaceuticals Health care
United States Republic Services Industrials
United States S&P Global Financials
United States Salesforce Technology
United States ServiceNow Technology
United States Snap Consumer discretionary
United States Spirit AeroSystems Consumer discretionary
United States Williams Companies Energy
United States Union Pacific Corporation Industrials
United States UnitedHealth Group Health care
United States WM Industrials
United States Whirlpool Corporation Consumer discretionary

DJSI Europe and Eurozone Index

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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.

DJSI North America and United States Index

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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.

DJSI Asia Pacific Index

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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.

DJSI Korea Index

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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.

Assessment

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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
  • Economic dimension: 33%
  • Environmental dimension: 33%
  • Social dimension: 33%
  • Industry criteria: 57%
  • General criteria: 43%

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]

  • Total Number Invited Companies = 2,617
  • DJSI World Universe = 2,500
  • DJSI Europe Universe = 600
  • DJSI North America Universe = 600
  • DJSI Asia Pacific = 600
  • DJSI Korea = 200
  • Companies analyzed globally = 1,393
  • Companies completing questionnaire = 698
  • Companies analyzed based exclusively on public information = 695

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]

  • Sector Leader: In each sector, the SAM Sector Leader is identified as the company best prepared to seize the opportunities and manage the risks deriving from economic, environmental and social developments. The SAM Sector Leader is the company with the best score of all companies assessed in this sector.
  • Sector Mover: Sector Mover is awarded to the company that achieved the biggest proportional improvement in its sustainability performance compared with last year.
  • SAM Gold Class: To qualify for the SAM Gold Class, the SAM Sector Leader must achieve a minimum total score of 75 percent. Peer-group companies whose total score is within five percent of the SAM Sector Leader are also awarded. SAM Gold Class. A score up to ten percent lower than the leader results in SAM Silver Class, a score up to 15 percent lower than the leader results in SAM Bronze Class.
  • SAM Silver Class: To qualify for the SAM Silver Class, the SAM Sector Leader must achieve a total score in the range of 70 to 75 percent. Peer-group companies whose total score is within five to 10 percent of the SAM Sector Leader are also awarded SAM Silver Class, while a score of ten percent lower than the leader results in SAM Bronze Class.
  • Sam Bronze Class: To qualify for the SAM Bronze Class, the SAM Sector Leader must achieve a total score in the range of 65 to 70 percent. Peer-group companies whose total score is within 10 to 15 percent of the SAM Sector Leader are also awarded SAM Bronze Class.

Criticism

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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]

Relevance of the DJSI

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Studies on the DJSI

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  • Hope, Chris; Fowler, Stephen J. (2007). "A Critical Review of Sustainable Business Indices and Their Impact". Journal of Business Ethics. Vol. 76. S. 243–252.
  • Lee, Darren D.; Faff, Robert W. (2009). "Corporate Sustainability Performance and Idiosyncratic Risk: A Global Perspective". Financial Review. 44 (2): 213–237. doi:10.1111/j.1540-6288.2009.00216.x. S2CID 153497860.
  • Chatterji, Aaron K.; Durand, Rodolphe; Levine, David I.; Touboul, Samuel (2016). "Do ratings of firms converge? Implications for managers, investors and strategy researchers". Strategic Management Journal. 37 (8): 1597–1614. doi:10.1002/smj.2407. S2CID 53389508.
  • Carlos, W. Chad; Lewis, Ben W. (2018). "Strategic Silence: Withholding Certification Status as a Hypocrisy Avoidance Tactic". Administrative Science Quarterly. 63 (1): 130–169. doi:10.1177/0001839217695089. S2CID 151315245.

See also

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References

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  1. ^ "About us". ROBESCO SAM sustainability-indices.com.
  2. ^ a b Smith, Simon (3 July 2012). "S&P Dow Jones Indices formed from merger of S&P Indices and Dow Jones Indexes". ETF Strategy. Retrieved November 8, 2012.
  3. ^ "Results Announced for 2012 Dow Jones Sustainability Indexes Review". PR Newswire. Sep 13, 2012. Retrieved November 8, 2012.
  4. ^ a b c d "Corporate Sustainability Assessment". DJSI. Archived from the original on January 21, 2013. Retrieved November 8, 2012.
  5. ^ "The First Decade: 1999-2009". Pg. 7. Dow Jones Sustainability Indexes. Dow Jones Indexes, 2009. Web. 14 Nov. 2010.
  6. ^ "The First Decade: 1999-2009". Pg. 6. Dow Jones Sustainability Indexes. Dow Jones Indexes, 2009. Web. 14 Nov. 2010.
  7. ^ "Dow Jones Indexes and SAM group launch Dow Jones Islamic Market Sustainability Index" Dow Jones Sustainability Indexes. Dow Jones Indexes, 23 Jan. 2006. Web. 15 Nov. 2010. Archived 2010-08-27 at the Wayback Machine (PDF).
  8. ^ "Keppel Offshore & Marine - Media Releases". www.keppelom.com. Retrieved 2021-10-07.
  9. ^ "SAM Deepens Cooperation with Dow Jones Indexes". Dow Jones Sustainability Indexes. Dow Jones Indexes, 18 Aug. 2010. Web. 14 Nov. 2010 Archived 2010-08-27 at the Wayback Machine (PDF).
  10. ^ [1] Archived 2012-04-01 at the Wayback Machine. GlobeNewswire.
  11. ^ [2] Archived 2011-09-06 at the Wayback Machine.
  12. ^ a b c https://portal.s1.spglobal.com/survey/documents/DJSIComponentsWorld_2023.pdf [bare URL PDF]
  13. ^ DJSI Key Facts 2010 Archived 2011-07-15 at the Wayback Machine (PDF).
  14. ^ a b [3] Archived 2011-07-16 at the Wayback Machine (PDF).
  15. ^ [4] Archived 2011-07-16 at the Wayback Machine (PDF).
  16. ^ a b c [5] (PDF).
  17. ^ Corporate Sustainability. Retrieved December 4, 2011, from Dow Jones Sustainability Indexes in collaboration with SAM: [6][permanent dead link].
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