September 10, 2011
Dow Jones Sustainability Indexes Completes Annual Update
by Robert Kropp
Medtronic and Goldman Sachs are added, while Coca-Cola, Hewlett-Packard, and Microsoft are dropped.
Even with the proliferation in recent years of sustainable stock market indexes, the Dow Jones Sustainability Indexes
(DJSI), launched in 1999, remain an undisputed leader in the field. Currently, approximately 60
asset managers in 16 countries hold licenses to manage the financial products based on the indexes.
So when the annual update to the components of the Indexes is announced every
September, it is big news, for investors and companies both. Following the completion by SAM Group, the Swiss-based investment group,
of its Corporate Sustainability
Assessment, this year's update of the Indexes was announced on Thursday.
This year, 41 companies were added and 23 deleted,
bringing the number of components in the Indexes to 342. The largest US-based companies added were
Medtronic, a Minnesota-based medical technology company, and Air Products & Chemicals. Companies
added to the DJSI North America Index include Goldman Sachs and Sprint Nextel.
deletions from the Indexes have gained the most attention this year. Among those deleted from the
DJSI World Index were the US-based Coca-Cola, Hewlett-Packard, and PG&E. When Coca-Cola first made
the DJSI in 2009, the company stated that its inclusion was "a testament to the Company's ongoing
sustainability efforts." While SAM declines to disclose publicly details about its Sustainability
Assessment of companies, Coke must have found its deletion especially galling this year; its top
competitor, PepsiCo, was named the supersector leader for Food & Beverage.
the only US-based company included among DJSI's 19 supersector leaders.
In addition to HP,
Microsoft was deleted from the DJSI North America Index. Describing the deletions as a dramatic change in the ethical investment profile of the
tech sector, writer James Farrar noted, "HP's sustainability report recorded a ratcheting down
of social investment & supply chain due diligence and a less than muscular approach to conflict
Microsoft, Farrar reports, has been criticized for inconsistent sustainability
reporting and for failing to adopt absolute emissions reduction targets.