February 15, 2005
First Australian and Israeli Socially Responsible Investing Indexes Launched
by William Baue
The Maala SRI Index goes live on the Tel Aviv Stock Exchange, and both the Australian SAM
Sustainability Index and the RepuTex SRI Index will launch imminently down under.
This month sees the introduction of several new socially responsible investing (SRI) indexes
worldwide, extending the reach and availability of SRI in Australia and Israel. Last week,
Melbourne-based social responsibility rating agency RepuTex announced the imminent launch of the "first
Australian SRI index." Later this week, however, the Australian SAM Sustainability Index (AuSSI)
will go live, "the first dedicated country-specific index based on the SAM methodology," according
to Alex Barkawi, managing director of Zurich-based Sustainable Asset Management (SAM) Group. The semantic issue of which index
can claim the title of "first Australian SRI index" may be less significant than the fact that
Australian social investors will go from having no choices for domestic SRI index investing to
having two within a short period of time.
Meanwhile, in Israel earlier this week,
the Tel-Aviv Stock Exchange (TASE) launched the Maala Socially Responsible
Investing Index, the first SRI index in the Israeli market. Maala, a partner organization of US-based
Business for Social Responsibility (BSR), is a
nonprofit member organization that promotes corporate social responsibility (CSR). It also rates
the CSR performance of the Tel Aviv 100
Index and companies with turnover larger than $100 million based on their philanthropic
contributions as well as their conduct toward employees, customers, suppliers, and the community
and environment at large.
The Maala SRI Index will comprise the top 20 companies on the
Maala social responsibility rating, topped by Teva, Bank Hapoalim, and Bank Leumi (based on market
capitalization), and will be updated annually on June 1 starting this year.
Ben-Ze'ev, senior vice president and director of the economic department at TASE, stated that the
new index will increase the exposure of social and environmental responsibility issues, and will
contribute to developing social responsibility as a norm among TASE-listed companies.
Australian social investors will soon have two options for exposure to top CSR performers in
their domestic market. The AuSSI will comprise the best sustainability performers from the top 200
listed companies in the Australian financial market as selected by SAM, which opened an office in
Melbourne in 2000. SAM will utilize the same best-in-class approach to selecting sustainability
leaders in each industry as it employs for the Dow Jones Sustainability Indexes (DJSI), the series of global SRI indexes it manages.
The history of the AuSSI dates back to a proposal from a May 2003 report published by the
Australian Department of Environment and Heritage (DEH) suggesting the potential for companies it identified as
sustainability leaders to create additional shareowner value. As with the Maala SRI Index, SAM
expects that the AuSSI, whose index values will be published daily in The Australian
starting this Friday, will encourage companies to independently and proactively improve their
Unsurprisingly, the RepuTex SRI Index shares this objective as
well. RepuTex's 12 SRI research analysts have rated 120 Australian and New Zealand businesses to date, and they will
continue rating more companies listed on the Australian Stock Exchange (ASX) for inclusion in the SRI Index.
"Many of the companies already rated by RepuTex at an 'A' or above level will be automatically
included in the Index," said Graeme Lee, chair of RepuTex and former managing director of Standard
& Poor's. "Based on current ratings, there are about 32 companies that may qualify automatically."
RepuTex has not publicized a launch date as yet for its SRI index.