Dow Jones STOXX Sustainability Index

AAA

DEFINITION of 'Dow Jones STOXX Sustainability Index'

A stock index that measures the financial performance of leading European companies as measured by their sustainability practices. The stock universe is the Dow Jones STOXX 600 Index, which captures more than 90% of the aggregate market cap of European-based companies.

The STOXX Sustainability Index contains the top 20% of these companies in terms of their aggregate sustainability score as obtained by SAM Group, a Zurich-based research firm.

The free float market capitalization-weighted index is reviewed both annually and quarterly; the quarterly reviews focus on share counts and weightings while the annual review incorporates the most recent sustainability scores and industry evaluations.

INVESTOPEDIA EXPLAINS 'Dow Jones STOXX Sustainability Index'

The sustainability indexes aim to capture companies on the leading edge of sustainability practice/reform; the sustainability score that each company receives is based on an intricate weighting system that examines company actions regarding things such as corporate governance, environmental performance, energy efficiency and climate change strategies.

The focus of the research (and related company score) is more on long-term sustainability than on short-term company benefits, so the financial performance of the index may underperform other benchmarks such as the Dow Jones STOXX 600 and MSCI Europe Indexes.

The index was first published in 2001, and in addition to the base index there are specialized sub-indexes that exclude industries such as alcohol, tobacco, firearms and gambling.

RELATED TERMS
  1. Free-Float Methodology

    A method by which the market capitalization of an index's underlying ...
  2. Green Economics

    A methodology of economics that supports the harmonious interaction ...
  3. Dow Jones Sustainability World ...

    A global index consisting of the top 10% of the largest stocks ...
  4. Dow Jones EURO STOXX Sustainability ...

    A stock index that measures the financial performance of leading ...
  5. Dow Jones Sustainability North ...

    A stock index that captures the top 20% of the largest 600 companies ...
  6. Corporate Governance

    The system of rules, practices and processes by which a company ...
Related Articles
  1. Go International With Foreign Index ...
    Mutual Funds & ETFs

    Go International With Foreign Index ...

  2. Go Green With Socially Responsible Investing
    Personal Finance

    Go Green With Socially Responsible Investing

  3. Socially Responsible Mutual Funds
    Mutual Funds & ETFs

    Socially Responsible Mutual Funds

  4. Spotting A Market Bottom
    Bonds & Fixed Income

    Spotting A Market Bottom

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center