Sustainability: a world index

Sustainability is an increasingly important aspect for companies and their stakeholders. Combining business with reducing environmental impact and protecting the ecosystem has become a priority. The Swiss agency RobecoSAM is well aware of this. Using the Dow Jones Sustainability Index, it annually assesses the sustainability performance of the companies with the largest market capitalisations, and the results were announced on Friday 13 September.

This year, Terna has once again ranked first in the world in the Electric Utilities sector for sustainability performance, confirming its 2018 position. In fact, the company has surpassed all 77 companies evaluated in the same production sector, achieving an overall score of 90 points out of 100, or twice the industry average, which settles at 45/100. This is enormously satisfying for the Italian electricity grid operator. In fact, Terna has been in the DJSI World since 2009. However, in the last five years, no company in the sector has ever been in first place for two consecutive years.

The DJSI is the first index to evaluate the financial performance of global companies that follow sustainable principles. Established in 1999 by the collaboration between the Dow Jones Index and SAM, each year it takes into consideration the performance of the 2,500 companies listed in the Dow Jones Global Total Stock Market Index which, due to their extensive commitment, have become points of reference over the years in terms of economic, environmental and social criteria. Its results are important benchmarks for investors who incorporate sustainability considerations into their portfolios and provide an effective starting point for those who wish to encourage companies to improve their corporate sustainability practices.

To be included in the index, companies must face a series of analyses on their economic, environmental and social performance, in which they are evaluated based on criteria such as corporate governance, risk management, branding, mitigation of climate change, supply chain standards and labour practices. The tendency is to exclude companies that do not operate in a sustainable and ethical manner. However, selection criteria change from year to year, as does the index. The only way to stay in the running is to continue to improve long-term sustainability plans. Furthermore, every company listed in the DJSI is monitored daily in order to identify any critical issues that could lead to exclusion, such as human rights violations, disputes between employees and environmental disasters caused. The list of the best companies is then divided by sector and geographic area, but only the most deserving are part of the global index. In 2019, of the 2,500 companies assessed, only 318 managed to get in index, less than 13% of the companies nominated.