Dow Jones Sustainability World Index

AAA

DEFINITION of 'Dow Jones Sustainability World Index'

A global index consisting of the top 10% of the largest stocks in the Dow Jones Global Indexes (which cover more than 2,500 companies) in terms of their sustainability and environmental practices. The index was started in 1999, and is maintained by Dow Jones in conjunction with SAM Group, a Zurich-based research firm that conducts detailed sustainability analyses of thousands of global market-cap leaders each year.

INVESTOPEDIA EXPLAINS 'Dow Jones Sustainability World Index'

The index is weighted based on free-float market capitalization, and changes are made once each year in September based on the newest sustainability scores. Each company represented in the index has its corporate sustainability assessed through an intricate weighting system that looks at economic, environmental and social metrics, as well as industry-specific criteria. Companies are also evaluated each year; those that fail to show consistent progress may be removed from the index.

The Dow Jones Sustainability World Index covers dozens of industry groups and has members in more than 20 nations. Because of increased investor appetite for socially-conscious investments and corporate environmental responsibility, the index has been licensed by many private wealth managers to use as a benchmark, and has billions of assets under management pegged to it.

Many companies that become members of the index see it as an opportunity to enhance shareholder awareness of environmental efforts and will issue press releases to announce their index membership and tout their environmental sustainability leadership.

RELATED TERMS
  1. Social Responsibility

    The idea that companies should embrace its social responsibilities ...
  2. Free-Float Methodology

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

    A methodology of economics that supports the harmonious interaction ...
  4. Badwill

    The negative effect felt by a company when shareholders and the ...
  5. Kyoto Protocol

    An international agreement that aims to reduce carbon dioxide ...
  6. Dow Jones STOXX Sustainability ...

    A stock index that measures the financial performance of leading ...
Related Articles
  1. Investing

    Clean Or Green Technology Investing

  2. Personal Finance

    Go Green With Socially Responsible Investing

  3. Investing

    What is the carbon trade?

  4. Economics

    How A Limited Government Affects A Country's ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center