by Hank Boerner – Chair & Chief Strategist, G&A Institute
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 for Morgan Stanley 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 he pioneers (asset owners and their internal and external 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.
To meet investor demand, in 1999, the 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” (family of indexes/benchmarks) 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 Corporate Sustainability Assessment – the CSA.
Today with literally thousands of sustainable indexes and benchmarks and ESG investable products 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” exercise, providing critical ESG data and information to RobecoSAM comprehensive analysts.
The invitations go out from RobecoSAM to companies in the spring of the year and the new formulations for the family of DJSI indexes are announced in the fall (companies included and excluded).
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 preparation of the 2020 CSA response by the company. In our experience, it can take 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.
SPECIAL BY INVITATION WORKSHOP FOR UNDERSTANDING THE DJSI AND RESPONDING TO THE CSA…
SPECIAL EVENT FEATURING ROBECOSAM
G&A Institute and Donnelley Financial Solutions (DFIN) have partnered to host an invitation only event featuring RobecoSAM to help corporate managers whose companies are responding – or plan to respond – to the annual Corporate Sustainability Assessment (CSA). Our next program is scheduled for October 15, 2019 at Baruch College’s Vertical Campus in New York City.
This by-invitation program is specifically designed for qualified corporate managers (such as corporate IROs, corporate governance managers, and sustainability managers and others in the corporation charged with responsibility to respond to the CSA) to help workshop participants understand the process.
And, to hear first-hand from experts involved in the CSA process, including ESG investment professionals utilizing the data for scores and index creation (DJSI, S&P ESG Indexes for example).
To request an invitation to participate submit your info here:
The one-day event will feature speakers from RobecoSAM, S&P Dow Jones Indices, State Street, Abbott and Owens Corning, and valuable peer-to-peer conversations for corporate sustainability and IR managers.
The event is sponsored by G&A Institute and Donnelley Financial Solutions, Inc., (DFIN) the leader in risk and compliance solutions, providing insightful technology, industry expertise and data insights to corporate clients around the world.
Dow Jones Sustainability Indices Review Results 2019
Source: Yahoo Finance – The three largest (by free-float market capitalization) additions to and deletions from the DJSI World this year are:
And also of interest…
State Street to Battle BlackRock, DWS With New Sustainable Funds
Source: Yahoo Finance – State Street Corp. is almost doubling its line-up of socially-responsible exchange-traded funds as it looks to compete with the likes of BlackRock Inc. and Deutsche Bank AG’s DWS Group in the burgeoning market for values-oriented…
3 Myths About Sustainable Funds
Source: MorningStar – In a 2017 Nuveen survey of investors, four out of five said they want their investments to make a positive impact on society and on environmental sustainability. And in an Allianz Life survey released in April, two thirds of…
Fidelity International launches ‘Sustainable Family of Funds’ ESG range
Source: International Investments – Fidelity International today announced the launch of its Sustainable Family of Funds (the Sustainable Family), a new cross-asset class fund range with a focused environmental, social and governance (ESG) framework.