Thursday, September 8, 2011

Results of the DJSI Review 2011

Changes are being made to the Dow Jones Sustainability Indexes (DJSI) as a result of the 2011 annual SAM Corporate Sustainability Assessment.

SAM performs an integrated assessment of economic, environmental and social criteria with a strong focus on long-term shareholder value. A key criteria change for 2011 is water related risks; this new criteria was introduced for the first time in the 2010 assessment. Based on SAM's analysis of water consumption, 13 sectors have been identified as potentially exposed to water-related risks. The questions in the criteria seek to assess whether companies are able to measure their exposure to water-related risks and whether they have appropriate risk management systems in place to mitigate risks around quantity/quality of water, regulatory changes or stakeholder conflicts. Based on data collected on water-related risks during last year’s assessment, they have further developed the water risk methodology, mainly through the reinforcement of a balanced consideration of the company’s exposure to risks and its management of those risks. Other key changes include social and environmental reporting and Media and Stakeholder Analysis (MSA) methodology.

In the DJSI World, the top 3 additions, by free float market capitalization as of July 15th 2011, are Medtronic, Schneider Electric and Societe Generale. Kinross was also added, coming in at number 9. The top 3 deletions were Coke, HP and Encana.

The DJSI North America saw more Canadian companies dropped. The top 3 deletions are Microsoft, Coke and Goldcorp, with Enbridge and National Bank also in the top 10. The top 3 additions are Goldman Sachs, EMC and CMX.

Pepsi is definitely making strides in the Sustainability Face Off, having been named the supersector leader in Food and Beverage.

All changes will become effective with the opening of the stock markets on September 19th, 2011.

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