DEFINITION of 'EURO STOXX Sustainability Index'

The EURO STOXX Sustainability Index measures the financial performance of leading Eurozone companies as measured by their sustainability and environmental practices. The stock universe is the Dow Jones STOXX Sustainability Index, from which only companies operating in 11 Eurozone nations (countries that have transitioned to the Euro) are chosen.

Companies are given a sustainability score based on a comprehensive review by research firm SAM Group; annual surveys are conducted on all potential companies so that company progress and new initiatives can be constantly measured and compared against industry peers.
The index is weighted based on free-float market capitalization and changes to the index are made annually after updated company sustainability scores have been obtained.

Quarterly weighting adjustments are also made as the market caps of member companies fluctuate.

BREAKING DOWN 'EURO STOXX Sustainability Index'

The sustainability score for each company is calculated using a comprehensive weighting system that looks at company efforts in areas such as climate change, energy efficiency, knowledge management, shareholder relations and corporate governance. In addition, companies are evaluated compared to their own industry, as each industry has its own parameters and inherent environmental issues.

Sustainability is a long-term company strategy, and includes both economic and social costs that typically cannot be measured within a quarterly or annual time frame.

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