The DJSI – Pioneers in ESG/Sustainable Investing Indexes, Celebrates 20 Years of Industry Leadership and Partnership of RobecoSAM and S&P Global Dow Jones

G&A's Sustainability Highlights (9.27.2019)
Oct 1, 2019 11:00 AM ET

ESG equity indexes are certainly all the buzz these days as many more institutional and retail investors are embracing sustainable investing and directing their investment dollars toward existing and new index families that qualify (or purport to qualify) as a suitable ESG/sustainable investment.

Of note, Morgan Stanley Institute reports that its surveys reveal that are there very strong signals in asset management circles for growth and opportunity as sustainable investing has definitely gone mainstream.  Three-quarters of asset managers report they are adopting sustainable investing (up from a modest 10 percent in 2016).  Those surveyed by MSI said they believe they can maximize financial returns while investing sustainably (62% said so); and 89% of respondents say their firm is devoting additional resources to the approach over the next year or two.

It was not always this way; the pioneers (asset owners and their managers) focused on the early forms of sustainable investing back 40, 30, 20 years did not have a wide range of indexes/indices to choose from as they embraced a new approach in equity analysis and portfolio management.  They believed that sustainable investing methods could help them do well by doing good, as the early adopters proclaimed.

In 1999, early days in sustainable investing as we know it today, S&P Dow Jones and SAM (one of the first asset managers focused on sustainability) developed the pioneering approaches to sustainable indexing with a family of funds that have over the two decades worked to shape global sustainable investing practices. Today, SAM is known as RobecoSAM, based in Switzerland.

Over time, inclusion in “the DJSI” became a distinct badge of honor and pride for a public company board and management. (Here at G&A Institute we hear that from a wide range of company managers in various sectors and industry categories. “The CEO wants to be in…”  Part of our service offerings is helping corporate managers understand and respond effectively to the annual CSA.)

Today with literally tens of thousands of sustainable indexes and benchmarks available to investors and more coming every day (it seems to us in our monitoring) the DJSI choices remain king-of-the-hill for sustainable investment professionals. RobecoSAM and S&P Dow Jones Indexes continue to set the pace for this ever-more important class of benchmarks.

That first year, public companies were invited to provide ESG information to the partners – 280 did and 228 were included in the first versions of the DJSI. Today, 1,200 companies actively participate in the annual “CSA” (the Corporate Sustainability Assessment) exercise, providing critical ESG data and information to RobecoSAM analysts.

The invitations go out to companies in the spring and the new formulations for the family of DJSI indexes are announced in the fall.  The period between the September announcement and the preparation for the next spring’s CSA response is critical for examining the results of (say, the 2019 response and results) and the 2020 CSA response by the company.  It takes a full six months of preparation to increase scores by providing updated data and information – which the competing peers are doing as well!

The more you know about the DSJI and related process, the better as you prepare for the 2020 CSA response when/if your company is invited by RobecoSAM.

There’s a complete history of the DJSI and a wealth of useful current information in this week’s Top Story for you.

This is just the introduction of G&A's Sustainability Highlights newsletter this week. Click here to view the full issue.