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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 this field."

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 14 countries.

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."


 

 
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