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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.

Ronit Harel 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 sustainability performance.

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.


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