Wednesday, May 11, 2011

The Dow Jones Sustainability Index

The Dow Jones industrial average is the world's best known index and as of 1999 it has been home to the world's first sustainability index.

Dow Jones is the leading full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products. Dow Jones offers more than 130,000 equity indexes as well as fixed-income and alternative indexes.

In 1999, Dow Jones launched its Sustainability Index (DJSI). The first global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. Based on the cooperation of Dow Jones and SAM (Sustainability Asset Management) they provide asset managers with reliable and objective benchmarks to manage sustainability portfolios.

Currently more than 70 DJSI licenses are held by asset managers in 19 countries to manage a variety of financial products including active and passive funds, certificates and segregated accounts. In total, these licensees presently manage over 8 billion USD based on the DJSI.

The DJSI measures companies’ sustainability initiatives. This family of indexes evaluates the performance of the world’s sustainability leaders. The DJSI focuses on how a company recognizes the risks and opportunities arising from sustainability issues in its business strategy. The DJSI Indexes are the longest-running global sustainability benchmarks worldwide and have become the key reference point in Sustainability Investing for investors and companies alike.

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 SAM plans in order to remain on the Index.

Indexes are updated yearly and companies are monitored throughout the year. DJSI conducts a yearly review of the DJSI family and 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. It accounts for general as well as industry specific sustainability criteria for each of the 57 sectors defined according to the Industry Classification Benchmark.

Here is a partial list of some of the companies included in the DJSI:

Dow Jones Sustainability World Index
Adidas- United States
Hewlett Packard Co. – United States
BMW AG- Germany
Coca-Cola Co – United States
Christian Dior S.A.- France
Halliburton Co. – United States
Hyundai Engineering & construction Co. Ltd. – South Korea
Intel Corp. – United States
Mitsubishi Corp. – Japan
Nokia Corp. - Finland
Panasonic Corp. – Japan
Rolls- Royce Group PLC – United Kingdom
Samsung Electronics Co. Ltd – South Korea
Siemens AG- Germany
Starbucks Corp. – United States
Toshiba Corp. – Japan
Unilever- United Kingdom
Volvo AB Series B- Sweden

Dow Jones Sustainability North American Index
3M Co. – United States
Allstate Corp. – United States
Bank of Montreal – Canada
Campbell Soup Co. – United States
Dell Inc. – United States
Ford Motor Co. – United States
Gap Inc. – United States
H & R Block Inc. – United States
Kinross Gold Corp. – Canada
Macy’s Inc. – United States
Microsoft Corp. – United States
National Bank of Canada – Canada
Proctor & Gamble Co. – United States

© 2011, Richard Matthews. All rights reserved.

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3 comments:

deborah said...

Have you seen "Economics of Happiness" read "Peoples History of the United States" (Zinn) any D. Korten or McKibbon, realize that the GDP is a flawed measurement when it comes to sustainability? "Tapped,""Gasland,""Food Inc," "King Corn?" why should we believe a system that has put so much life in jeopardy? What about the issues of social justice, diversity for the sake of creative development, research for knowledge the values of the mind and heart, cooperation? Putting more on the bottom line is necessary for humans to really flourish.

Richard Matthews said...

I am familar with the argument, however, the fact that some business models do not serve the planet or the people that inhabit it does not mean the system is irreparably broken. We can make it work for people and the planet. Are you familar with the triple bottom line concept? It is being adopted by businesses around the world. Even if they are not being driven by altruism, it is still reducing footprints and helping people to earn a living wage. In the final analysis, it is the only option we have in the time remaining. We can only hope that people will vote for change and governments will legislate change. So far that does not seem to be happening, but I refuse to give up trying.

deborah said...

Yes I have heard about the triple line corporations but until we can diversify the economic system we lose in the choice of possibilities. Airplay (radio industry doc) was on PBS the other night. As companies grew the playlist was brought in and djs lost voice, artists and audiences lost variety, same as Agribiz with crop selection. Slow food in Italy is all about diversity in produce, as they realize the failures of industrial farming.