S&P Dow Jones Indices has recently announced significant changes in its flagship sustainability indices.
The firm, recognized globally, plays a pivotal role in measuring company performances using key environmental, social, and governance (ESG) criteria.
According to ESG Today, this year’s rebalancing and reconstitution of the Dow Jones Sustainability Indices (DJSI) reflect S&P DJI’s commitment to evolving its criteria and benchmarks to align with current global ESG standards. This change aims to better represent companies excelling in sustainable practices.
S&P DJI, established in 1999, has been a frontrunner in creating indices that integrate sustainability considerations. These indices, such as the DJSI, are designed to track the performance of leading companies worldwide in terms of ESG criteria. Collaborating with Sustainable Asset Management Group (SAM), now a part of S&P Global, the firm has been pivotal in promoting sustainable investment practices.
The rebalanced DJSI include notable high-profile changes, especially in the DJSI World Index. This index, comprising the top 10% of the largest 2,500 companies in the S&P Global BMI, now includes Tencent Holdings, Philip Morris International, and ServiceNow. These additions highlight the index’s focus on companies demonstrating robust ESG practices.
Apart from the world index, regional indices like the Dow Jones Sustainability North America Index and DJSI Europe saw significant additions. These include The Coca-Cola Company, General Electric, and major automotive and aerospace companies, underscoring the global reach and diversity of the DJSI.
Key to the DJSI selection process is each company’s S&P Global ESG Score, derived from the annual Corporate Sustainability Assessment (CSA). This rebalancing also led to the removal of major healthcare companies like Novartis, AstraZeneca, and Amgen, based on their market capitalization.
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