Stockholm (NordSIP) – RobecoSAM, the investment specialist focused exclusively on Sustainability Investing, has together with S&P Dow Jones Indices announced the results of its annual Dow Jones Sustainability Indices (DJSI) Review (as of September 18, 2017).
RobecoSAM assesses the world’s largest companies via its Corporate Sustainability Assessment (CSA), which uses a consistent, rules-based methodology to convert an average of 600 data points per company into an overall score, which determines inclusion in the DJSI, the global index tracking leading sustainability-driven companies. Rankings are based on a comprehensive questionnaire with detailed criteria on 20 different categories relating to ESG.
Notably, SEB is the only Nordic bank included in the DJSI for the second consecutive year, with ratings conforming to the bank’s results last year. There are 18 other Nordic companies in the global ranking.
“The importance of the financial industry for sustainable development is becoming increasingly clear. For us at SEB, sustainability is a natural part of our business,” said SEB Head of Sustainability Marie Baumgarts. “It is a prerequisite for our long-term contribution to support our customers and for positive sustainable development.”
Denmark’s pharmaceutical giant Novo Nordisk A/S was removed from the DJSI Europe (though remains on the DJSI World list). Among the largest additions to this year’s list by free-float market capitalization were Samsung Electronics Co., Ltd., British American Tobacco plc. and ASML Holding N.V. Enbridge Inc, Reckitt Benckiser Group plc and Rio Tinto were removed from the list. Enbridge remains listed on the North American DJSI, however, while Rio Tinto remains a member of DJSI Europe.
“Being a pioneer and thought leader in Sustainability Investing for over 20 years, we understand the right questions to ask in our CSA in terms of financially material sustainability aspects within the corporate world,” said RobecoSAM Head of Sustainability Application & Operations Manjit Jus in a press release. “This is what firms appreciate about the CSA. It brings them a big step ahead in terms of Corporate Sustainability and with this – a big step ahead of their competitors – getting a coveted spot in the DJSI makes sure they continue to play in the premier league of companies.”
RobecoSAM’s CSA assessed Policy Influence for the first time this year to learn more about companies’ lobbying activities, expanding the Impact Measurement & Valuation criteria to nearly all industries. Preliminary analysis revealed that Policy Influence has become a “material issue for investors that deserves more attention from ESG and investment analysts,” with companies in the DJSI universe spending an average of 0.02% of total sales annually on policy influence activities (median spending resting at 0.01%), though companies are hesitant to report on policy influence spending beyond legal obligation.
Nevertheless, companies still face difficulties in assessing the positive and negative externalities in their business models in accordance with the UNDP SDG’s, with CSA data showing that while 70% of companies are aware of the need to understand environmental and social profits and losses, less than 10% of companies have a viable valuation approach in place that provides detailed insights into the potential financial impacts.
“Many of the events witnessed so far in 2017 make it even more important for corporations around the globe to recognize sustainability, establish policies and manage their businesses in ways that support and increase sustainability of the global environment and the world’s leading businesses,” added S&P Dow Jones Indices Managing Director and Chairman of the Index Committee David Blitzer. “The DJSI family provide a tool for investors to create asset allocations that can further sustainability.”
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