Index provider S&P Dow Jones Indices and sustainability investment specialist RobecoSAM have announced the results of the annual Dow Jones Sustainability Indices (DJSI) review.
The S&P Dow Jones Sustainability Indices harness ESG-themed analysis provided by sustainability investing expert RobecoSAM.
The DJSI Family consists of indices targeting environmental, social and governance (ESG)-compliant exposures globally and regionally.
Launched in 1999, the parent DJSI World was the first global index to track the leading sustainability-driven companies based on RobecoSAM’s analysis of financially relevant ESG factors and S&P DJI’s robust index methodology.
The indices are designed for use as performance benchmarks for ESG-conscious investors and as underlying references for index-linked investment products such as exchange-traded funds.
The indices already underlie several ETFs from provider iShares, including the iShares Dow Jones Global Sustainability Screened UCITS ETF (LSE: IGSG), the iShares Dow Jones Eurozone Sustainability Screened UCITS ETF (Deutsche: EXXV), and the iShares Dow Jones Europe Sustainability Screened UCITS ETF (LSE: IESE), which collectively have about €350m in assets under management.
In terms of changes, the three largest additions to the DJSI World index (by free-float market capitalization) include Cisco Systems, Royal Dutch Shell and Adobe Systems. The three largest deletions are Intel, Samsung Electronics, and British American Tobacco.
The additions of Cisco Systems and Adobe are set to increase the technology sector weightings of S&P’s global and North American indices, however, this will be partly offset by the removal of Intel, while the addition of Royal Dutch Shell will increase the exposure to the energy sector for the global and European indices.
The removal of Samsung Electronics will lower the technology exposure of the global and South Korean indices while the removal of British American Tobacco will decrease the global and European indices’ exposure to consumer staples.
All changes are effective on Monday, September 19, 2016.
To screen and filter companies, RobecoSAM invited the world’s largest 3,400 listed firms from developed and emerging markets to take part in its annual Corporate Sustainability Assessment (CSA). The aim of the CSA methodology is to address upcoming sustainability trends that are connected to financial performance and thus raise the bar each year.
Manjit Jus, Head of Sustainability Application & Operations, RobecoSAM, said: “The iconic DJSI offer a great opportunity for companies to drive their sustainability performance. Moreover, the CSA addresses the right sustainability issues that support companies to remain at the cutting edge of their industry and forms the basis of new, innovative index solutions that we develop together with our partner S&P Dow Jones Indices.”
David Blitzer, Managing Director and Chairman of the Index Committee, S&P Dow Jones Indices, added: “With 2016 likely to be the hottest year on record, investors are again reminded that companies’ environmental and sustainability efforts are crucial to their financial outcomes. The Dow Jones Sustainability Indices are comprehensive benchmarks of companies that meet RobecoSAM’s sustainability standards and give investors tools to develop global allocations that reflect sustainability factors.”