Corporate Sustainability Assessment
Each year, the 2'500 largest companies within the S&P Global Broad Market IndexSM are invited to participate in RobecoSAM’s Corporate Sustainability Assessment.
A list of the companies invited which form the starting universe of the Dow Jones Sustainability Index family as well as a timeline for the Annual Corporate Assessment here.
The RobecoSAM Corporate Sustainability Assessment is based on the annual RobecoSAM Questionnaire, which consists of an in-depth analysis featuring approximately 80-120 questions on financially relevant economic, environmental and social factors (referred to as Dimensions) with a focus on companies' long-term value creation. The questionnaires are specific to each of the 59 DJSI industries following the GICS classification. Based on major global sustainability challenges identified by RobecoSAM's analysts, general criteria relating to standard management practices and performance measures such as Corporate Governance, Human Capital Development and Risk & Crisis Management are defined and applied to each of the 59 industries. The general criteria account for approximately 40 - 50% of the assessment, depending on the industry.
At least 50% of the questionnaire covers industry-specific risks and opportunities that focus on economic, environmental and social challenges and trends that are particularly relevant to companies within that industry. This focus on industry-specific criteria reflects RobecoSAM's conviction that industry-specific sustainability opportunities and risks play a key role in a company's long-term success and allows RobecoSAM to compare companies against their own peers in order to identify sustainability leaders.
A defined set of criteria (see chart below) is used to assess the opportunities and risks deriving from economic, environmental and social developments for the eligible universe of companies.
The information collected in the RobecoSAM Corporate Sustainability Assessment concerns factors that have a decisive impact on companies' future business success, but are often still overlooked by traditional financial analyses.
Illustrative chart: dimensional weights can substantially differentiate from 33% based on aggregated criteria weight
Media and Stakeholder Analysis
An integral component of the Corporate Sustainability Assessment is the ongoing monitoring of media and stakeholder commentaries and other publicly available information from consumer organizations, NGOs, governments or international organizations to identify companies' involvement and response to environmental, economic and social crisis situations that may have a damaging effect on their reputation and core business.
Throughout the year, RobecoSAM monitors news coverage of companies in the universe on a daily basis using media stories compiled and pre-screened by RepRisk, a leading provider of media monitoring tools. News stories covered by the Media and Stakeholder Analysis (MSA) include a range of issues such as economic crime or corruption, fraud, illegal commercial practices, human rights issues, labor disputes, workplace safety, catastrophic accidents or environmental disasters.
An MSA "case" is created if a company has been the subject of a specific allegation that can harm its reputation, resulting in financial consequences ranging from lost business, lost customers and declining sales, to liabilities, litigation or fines. Such a case therefore requires a reaction from the company in order to address the issue and minimize the negative impact of the crisis. In order to evaluate the quality of the company's response to the situation, RobecoSAM continues to monitor news flow related to the incident until it has been resolved.
The MSA is built into the Corporate Sustainability Assessment. The results of the MSA can reduce a company's Total Sustainability Score and thus affect its inclusion in any of the DJSI Indices.
Information provided in the questionnaire is verified for accuracy by crosschecking companies' answers with the supporting documentation they have provided, checking publicly available information, and by verifying a company's track record on crisis management with media and stakeholder reports.
In addition, to ensure quality and objectivity of the CSA, independent third party Deloitte conducts an external audit of the assessment process each year. You can download the Assurance Statement from Deloitte here.
Companies in the starting universe are ranked by the sustainability scores determined through the RobecoSAM Corporate Sustainability Assessment. These rankings take place within each DJSI industry. The top-ranked companies within each industry are selected for the Dow Jones Sustainability Indices. A detailed description of this selection process is available in the Dow Jones Sustainability Indices Guidebook.
DJSI Design Committee
The DJSI Design Committee consists of two RobecoSAM representatives and two S&P Dow Jones Indices representatives and meets on a monthly basis. Severe incidents and breaches that cast strong doubts on a company's procedures and ability to handle the situation can be escalated to the DJSI Index Design Committee.
The responsibilities of the DJSI Design Committee include the following:
- Auditing the index composition at the annual and quarterly reviews
- Deciding on the composition and accuracy of the Dow Jones Sustainability Indices
- Approving all changes to the index methodology
- Ongoing review of all extraordinary corporate actions for possible changes to the index composition
- Verifying the integrity of input price, currency rate and other related market data
The DJSI Design Committee is formed by the following individuals:
- David Blitzer, Managing Director, S&P Dow Jones Indices
- Guido Giese, Head of Indices, RobecoSAM AG
- Christopher Greenwald, Co-Head of Sustainability Investing Research, RobecoSAM AG
- Kirsty Knight, Director, Index Operations (Europe), S&P Dow Jones Indices
The Dow Jones Sustainability Indices comprise global and regional benchmarks including European, Eurozone, Nordic, North American, US, Asia Pacific, Australian and Korean indices. Subsets of these indices allow investors to exclude certain industries from performance measurement. Dow Jones Indices and RobecoSAM together can create customized versions of the indices to meet investors’ specific requirements for their unique investment objectives.
For further information on the Dow Jones Sustainability Indices, see the index fact sheets.