What is the '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. The countries are: Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain.

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 EURO STOXX Sustainability Index components must pass a bevy of tests and measures in order to be considered for the index. The 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 by how sustainable their practices are compared to their own industry, reflecting the fact that each industry has its own parameters and inherent environmental issues.

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

Which components and sectors are included in the index?

As of May 2018, the 10 biggest sector weightings in the index are as follows: 12.5% industrial goods and services, 10.1% health care, 10.1% personal and household goods, 9.6% technology, 8.2% insurance, 6.0% food and beverage, 5.9% utilities, 5.1% chemicals, 4.8% construction and materials and 4.8% banks.

The top 10 components in the index are: technology company SAP, with a 3.11% weighting; industrial company Siemens, with a 2.97% weighting; insurance giant Allianz, with a 2.73% weighting; health care companies Bayer and Sanofi, with weightings of 3.56% and 2.53%, respectively; personal and household goods provider Unilever, with a 2.42% weighting; technology firm ASM Holding, with a 2.33% weighting; personal and household goods maker LVMH Moet Hennessey, with a 2.28% weighting; food and beverage behemoth Anheuser-Busch InBev, with a 2.24% weighting; and insurance company AXA, with a 1.52% weighting. 

  1. Portfolio Weight

    Portfolio weight is the percentage composition of a particular ...
  2. Weighted Average Market Capitalization

    Weighted average market capitalization refers to a type of stock ...
  3. Weighted Average

    Weighted average is an average in which each observation in the ...
  4. STOXX

    STOXX is a family of market indexes that are representative of ...
  5. Dow Jones STOXX 50

    The Dow Jones STOXX 50 is a stock index representing 50 of the ...
  6. Fundamentally Weighted Index

    A fundamentally weighted index is a type of equity index in which ...
Related Articles
  1. Investing

    S&P 500 ETFs: Market Weight Vs. Equal Weight (RSP, SPY)

    Both S&P 500 and S&P 500 EWI indexes include the same set of stocks, but different weighting strategies give them separate individual properties.
  2. Managing Wealth

    Weighted Average Cost Of Capital (WACC)

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality
  3. Investing

    Smart Beta vs. Active Management: Which is Better? (BLK, SCHB)

    Learn how smart beta funds combine the advantages of both active and passive management by tracking customized indexes without capitalization weighting.
  4. Investing

    A Look at the Largest Sustainable Investing ETF

    Investors looking for a virtuous approach should consider one of the oldest socially responsible ETFs.
  5. Investing

    VTI: Vanguard Total Stock Market ETF

    Learn how the Vanguard Total Stock Market ETF provides an extremely diversified exposure to the entire universe of US securities with low expenses.
  6. Investing

    Spread Out Risk With Sector-Based ETFs

    These ETFs take the sector rotation strategy from institutional investors and puts it in your hands.
  7. Investing

    Introduction To Fundamentally Weighted Index Investing

    If you believe the market smiles on those who focus on value, growth or income, this vehicle may be for you.
  8. Investing

    VXF: Vanguard Extended Market ETF

    Learn how the Vanguard Extended Market ETF provides investors with exposure to the larger stock universe, except for companies in the S&P 500.
  9. Investing

    Analyzing Mutual Fund Risk

    Find out whether a fund's performance is a result of the manager's abilities or just a fluke.
  10. Investing

    VHT: Vanguard Health Care ETF

    Learn about the Vanguard Health Care ETF, its holdings and how it may be appropriate for a growth-oriented investor who wants to invest in the sector.
  1. What does the S&P 500 index measure and how is it calculated?

    Learn about what exactly the S&P measures and why it's used by market participants as a tool to understand the broader stock ... Read Answer >>
  2. How is the value of the S&P 500 calculated?

    The S&P 500 is a U.S. market index that gives investors an idea of the overall movement in the U.S. equity market. The value ... Read Answer >>
  3. How do I use Excel to calculate a weighted average?

    Learn about the calculation and interpretation of weighted averages, including how to compute a weighted average using Microsoft ... Read Answer >>
Trading Center