A Pre-Screening Tool for Investment Selection
Of the 1,393 companies, 318 were included in the Dow Jones Sustainability Index, which further enhanced their reputations because of meeting if not exceeding the benchmark for sustainable performance in the following areas:
Economic, as this covers the aspect of corporate governance, risks and crisis management, as well as codes of conduct and compliance management without resorting to corruption or bribery to achieve profitable operations.
Environment, specifically, how the company fared with environmental reporting based on industry-specific criteria.
Social, pertaining to the company’s reputation as a corporate citizen involved in acts of philanthropy, sound labor practices, positive development of human resources, plus the ability to attract and retain key talents.
All these present a more vivid picture of each of the leading companies and are useful for the investors’ screening purposes. Perceive that indices represent competencies and capabilities beyond market capitalization (the price per share times the number of the company’s outstanding shares).
The DJSI enables investors to confidently identify the companies that can meet shareholder demands for long-term economic benefits because of the considerable transparency by which they present their financial conditions. There are considerable proofs that gains are being derived as a result of:
Effective and efficient corporate governance,
- Favorable customer relationships including the latter’s satisfaction over the services and goods delivered,
- Competent risk management, and
- Efficient methodologies for aligning and developing human resources.
The Dow Jones Sustainability Index can simply be summarized as the current business approach in quantifying and identifying the leading companies to be selected for investment purposes. As added info, the latest DJS World Index lists four U.S. companies in the lead, namely: IBM (2nd place), GE (3rd place), Johnson and Johnson (4th place) and Coca-Cola (8th place).