7 key learnings from the 2018 Dow Jones Sustainability Indices Review
Key learnings from the 2018 results of the annual Dow Jones Sustainability Indices (DJSI) review.
On September 13, 2018 RobecoSam published the results of the annual Dow Jones Sustainability Indices (DJSI) review. The index is based on a comprehensive analysis of the economic, environmental and social performance of listed companies and has been a benchmark for corporate sustainability since 1999. The annual reviews and continuous development of the index give valuable insights into current trends in the field. The following key learnings can be inferred from this year’s results:
1. The number of companies engaging in sustainability is on the rise
A record number of 993 companies participated in RobecoSam’s corporate sustainability assessment in 2018, a 5.4 % increase over the previous year. The rising number of companies demonstrates not only an increasing commitment but also the high value that companies can derive from good sustainability performance and being benchmarked against their peers.
2. The biggest additions to the index
The three biggest additions to the worldwide listing are two US companies salesforce.com (Software & Services) and Schumberger Ltd. (Energy) as well as the UK-based beverage-company Diageo PLC.
3. The biggest deletions from the index
Three major companies are no longer included: Bayer AG, Samsung Electronics Co. and the Commonwealth Bank Australia.The latter two remain in regional DJSIs.
4. Strong relative growth of companies from emerging economies
While the US and Northern Europe remain dominant in terms of absolute numbers, making up around half of the participating companies and also contributing most to new additions, countries like China and Russia were amongst the top countries in terms of relative growth. These numbers may indicate the increase in adoption of sustainable practices and policies in emerging economies like the BRICS.
5. Changes in industry performance
A comparison of the different industries indicates changing dynamics, with the telecommunications and consumer staples industry scoring higher on average in 2018, whereas the industrials as well as the material and consumer discretionary industry reveal lower scores compared to last year’s results.
6. Climate issues even more relevant
Major changes in the assessment criteria show that climate related issues continue to be key to corporate sustainability performance. Modifications that apply to the climate strategy criterion include climate-target setting, the use of science-based targets and the inclusion of scope three emissions. Moreover, further alignment with frameworks like the CDP and TCDF is stressed.
7. Media & Stakeholder Analysis gains significance
A significant methodology change has occurred within the Media & Stakeholder Analysis (MSA). The MSA is an important part of the CSA, which is used to monitor and investigate controversies that participating companies are involved in and how they handle these situations. RobecoSam removed the former MSA’s positive score contribution to companies with no controversies and assigned a multiplier to relevant criteria. The revision is supposed to better reflect severe controversies in the overall score and thus make it easier for investors to differentiate company performance. Moreover, the changes highlight the growing importance of publicly discussed corporate conduct.
BSD supports companies who participate in sustainability rankings and ratings, such as DJSI and CDP. We offer trainings, gap analyses, short- and mid-term recommendations (roadmap), briefing workshops for involved departments and a quality check for your response.
• Several years of experience in improving DJSI/CSA and CDP responses in various industries
• Extensive expertise in designing and facilitating tailored workshops
• Large relevant network, e.g. with CDP and RobecoSAM (common expert roundtables)