October 15, 2001
New European Sustainability Indexes Launched
by Mark Thomsen
Four Dow Jones STOXX Sustainability Indexes are introduced to satisfy the growing demand for
sustainability benchmarks in Europe.
Dow Jones Indexes, SAM Group, and STOXX Limited today announced the introduction of four
sustainability indexes for the European market. These new Dow Jones STOXX Sustainability Indexes,
derived from the Dow Jones STOXX indexes, have been created to offer investors broader benchmarks
for their European portfolios.
"As sustainability is moving into mainstream
investing, the need to mirror the market in terms of sectors is of paramount importance," said
Alexander Barkawi, Managing Director of SAM Indexes. "Supporting investors to build up
sustainability portfolios without taking bets on sectors is an important goal for every provider in
Dow Jones Indexes and SAM Group partnered in 1999 to launch the first global
sustainability index, the Dow Jones Sustainability Index World (DJSI World). SAM Group is an
independent, Switzerland-based financial services firm that focuses exclusively on sustainability.
Dow Jones Indexes, which develops, maintains and licenses more than 3,000 indexes, is part of Dow
Jones & Company.
DJSI World tracks the financial performance of firms assessed as being
in the top 10 percent, in terms of sustainability, of the largest 2500 companies in the Dow Jones
Global Index. A company's level of sustainability is determined by examining how it manages the
risks and opportunities related to economic, environmental, and social criteria and issues.
STOXX Limited, whose Dow Jones STOXX indexes offer the basis for the sustainability indexes
introduced today, is a joint venture between Dow Jones & Company and three European stock
exchanges: Deutsche Boerse AG, Euronext Paris SA and SWX Swiss Exchange. The Dow Jones STOXX
indexes cover the European equity markets by region, by size and by style.
The first of
the new indexes is the Dow Jones STOXX Sustainability Index (DJSI STOXX), which is derived from the
Dow Jones STOXX 600 index. The STOXX 600 covers companies in 39 industries, spread over 17
countries. The new DJSI STOXX comprises the top 20 percent of those 600 companies that are leaders
in terms of sustainability. The index has 151 component companies in 39 industries, representing
The second of the new indexes is the Dow Jones EURO STOXX Sustainability
Index (DJSI EURO STOXX), which derives from the Dow Jones EURO STOXX index. EURO STOXX only
includes companies listed in the STOXX 600 that are based in Eurozone countries. Eurozone
countries are European countries that have adopted the Euro as a currency.
The other two
indexes are the DJSI STOXX and the DJSI EURO STOXX with the application of "sin" stock screens.
That is, the indexes are the same except they have been screened for companies that generate
revenue from alcohol, gambling, tobacco, and armaments or firearms.
European interest in
sustainability has been spurred in part by new regulations in some countries that require trustees
of pension funds to disclose how they account for corporate responsibility issues in their
investment strategies. Such regulations have been passed in the U.K. and Germany and are being
discussed in Belgium and France.
SAM Group has also noted that the number of companies
producing sustainability reports that examine economic, environmental and social criteria is
increasing. These developments, along with the introduction of the DJSI STOXX indexes, seem to
indicate sustainability's continuing move into the mainstream in Europe.
"This is a
milestone for sustainability investing," said Mike Petronella, Managing Director of Dow Jones
Indexes, about the new indexes. "During the last twelve months we have seen an increasing interest
for a regionally focused sustainability index. With the success of the DJSI World we have a strong
platform to meet this demand an to open a new chapter for sustainability investments."