Dow Jones Sustainability Index has become the benchmark of benchmarks

The Dow Jones Sustainability Index (or DJSI) has become for the right reasons a fairly exclusive club of only 318 companies globally, you may recall it was significant news when BP were removed from the index in June of this year due to what were considered ‘extraordinary events’ which were not in keeping with members of the index. There is equity in finding a place on the index as all companies are reviewed and selected or promoted/relegated on annual basis based on a sustainability assessment. The index was founded upon the principle of being entirely rule-based and the resultant scores and scores alone would dictate the inclusion or exclusion of corporations when annual reviews are compiled.

In addition the components that form the index are marked on a daily basis to make the organization aware of new issues that could cause critical changes within the results of a corporation. The index measures the company’s overall involvement by way of a system of metrics that evaluate economic, environmental and social commitments, principles and company policies.

The index is truly global in scope as corporations from every continent are represented and appraised, during the most recent evaluation process invitations were forwarded to over 2,500 of the world’s largest companies to be evaluated. The index is now just over a decade old and the participation level has grown by almost 300% in that time as more and more companies want to ensure that they are considered for the index which assists them not only on the stock exchange but in the public eye for both consumers and suppliers. To ensure that the balance of the index is formed by a representative cross-section of industries, only the very best of each different market sector are represented in the final list, a list that is becoming more and more competitive each year. More than 100 questions make up the evaluation process which covers each main component of a corporate responsibility program included in the questions are valuations about corporate governance, risk & crisis management, human capital development and significantly overall environmental and social reporting.

More than half of the companies invited to be placed under what is truly the most level playing field when evaluating sustainability elected to participate. The index has resulted in a highly competitive battle for prestige especially within different sectors of industry, the most recent updated list exhibited a total of 48 new additions to the Dow Jones sustainability world Index (DJSI World) while 46 companies were deleted. Another benefit of the index is that the selection criteria keeps being refined to achieve higher standards of measurement and inclusion including the ways I mentioned above plus climate change mitigation, supply-chain standards and labour practices. In some senses it’s become a corporate hall of fame for companies exhibiting the best sustainable practices by better than a traditional hall of fame, membership is not guaranteed and the company is only as good as its most recent performance.

You can learn far more about the Dow Jones Sustainability Index at their website, although some reporting will require membership you can still acquire some very pertinent information.