The 2014 Dow Jones Sustainability Index: Abbott to Woolworths

The 2014 Dow Jones Sustainability Index: Abbott to Woolworths


After an annual review, 46 companies were deleted from the 15-year-old Dow Jones Sustainability World index — the three biggest (by free-float market capitalization) to be booted were Bank of America, General Electric and Schlumberger.

The good news is that 32 were added, including Amgen, Commonwealth Bank of Australia and GlaxoSmithKline.

Even better news, 16 companies have been recognized every single year: Baxter, Bayer, BMW, BT, Credit Suisse, Deutsche Bank, Diageo, Intel, J Sainsbury, Novo Nordisk, RWE, SAP, Siemens, Storebrand, Unilever and UnitedHealth.

Every year, S&P Dow Jones Indices teams with RobecoSAM to update its portfolio of sustainability index services, which consider both sustainable business practices and financial performance. The assessment criteria this year covered tax strategy (to address the growing risks associated with tax optimization schemes); social and environmental reporting factors, including materiality; human capital development policies; and performance scoring related to occupational health and safety, and talent recruitment and retention.The top leaders in 24 industries

This year, close to 3,400 companies were invited to submit information (1,813 were ultimately analyzed).

"In 15 years, the total number of companies we assess has more than quadrupled," said Guido Giese, head of indices for RoboecoSAM. "We have also developed new sustainability benchmarks for investors such as country and regional indices."

Those products include an index dedicated to emerging markets, along with ones for Australia, North American, Korea, Europe, Australia and Asia Pacific.

Companies eligible to make the cut needed scores that were at least 40 percent of the highest score for their index. The world version includes the 10 percent of companies that were best-in-class for their industry. (The cutoffs were 20 percent for regional indexes, 30 percent for specific countries and 10 percent for emerging markets.)

There were 319 "components" on the World index. (There are only 270 if you nix companies in the business of tobacco, alcohol, gambling, adult entertainment, and armament and firearms).DJSI World members for 15 years

Aside from the companies already mentioned, the 10 biggest additions included AbbVie, Caterpillar, Bank of New York Mellon, Deutsche Post, Reckitt Benckiser Group and Toronto-Dominion Bank. Other big businesses to come off were BHP Billiton, Colgate-Palmolive, McDonald's, Nike, Starbucks and Telefonica.

Individual sector leaders include: BMW (Autos), Westpac (Banks), Siemens (Capital Goods), SGS (Professional Services), LG Electronics (Consumer Durables & Apparel), Sodexo (Consumer Services), ING (Diversified Financials), Thai Oil (Energy), Woolworths (Food & Staples Retailing), Unilever (Food), Abbott Labs (Health Care), Kao (Household  Products), Swiss Re (Insurance), Akzo Nobel (Materials), Telenet (Media), Roche (Pharma), GPT (Real Estate), Lotte Shopping (Retailing), Taiwan Semiconductor (Semiconductors), Wipro (Software & Services), Alcatel-Lucent (High-tech Equipment), Air France-KLM (Transportation), EDP (Utilities) and Telecom Italia (Telecommunications).