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September 09, 2010

Dow Jones Sustainability Indexes Updated
    by Robert Kropp

For the 11th year, SAM Indexes provides analysis of corporate sustainability leadership for index that now contains 318 components.

SocialFunds.com -- The annual update of the Dow Jones Sustainability Indexes (DJSI), the oldest benchmarks for sustainable investment, has been completed. As has been the case for the 11 years of the indexes' existence, SAM Indexes was responsible for both corporate sustainability assessment and index composition.

According to a
press release, "The annual review of the DJSI family is based on a thorough 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."

The components of the Dow Jones Sustainability World Index (DJSI World) include the top ten percent of the largest companies in the Dow Jones Global Indexes. This year, DJSI World includes 318 components. Forty-eight companies have been added, and 46 were deleted.

The largest companies added, as determined by market capitalization, were Standard Chartered, Morgan Stanley, and ArcelorMittal. The largest companies deleted were Toyota, Royal Dutch Shell and UniCredit. Toyota, of course, has received considerable media attention this year because of multiple product quality defects in its automobiles, while Shell�currently listed as the world's second-largest corporation in
Fortune Magazine's Global 500--is responsible, along with ExxonMobil, for much of the estimated 546 million barrels of oil that have spilled in the Niger Delta over the last 50 years.

The question of why companies with such poor environmental records would be included in a sustainability index in the first place was highlighted earlier this year, when BP was removed from the DJSI World following the Gulf of Mexico oil spill. Index rules allow for elimination of companies from the DJSI following extraordinary events.

In addition to Morgan Stanley, eight other US-based companies were added to the DJSI World this year. Companies added to the Index were Alcoa, Campbell Soup, Duke Energy, Heinz, Halliburton, Hormel Foods, McGraw-Hill, and Owens Corning.

The five US-based companies removed from the Index were El Paso Corp., Genzyme, ITT, Kimberly-Clark, and Plum Creek Timber Co.

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