What is the Dow Jones Sustainability United States Index
The Dow Jones Sustainability United States Index is a free-float market capitalization weighted index that captures the U.S.-based companies in the Dow Jones Sustainability North America Index, which contains the top 20 percent of the largest U.S., Canadian and Mexican companies from the Dow Jones Global Index. Economic and social sustainability are at the core of what the index looks to track.
BREAKING DOWN Dow Jones Sustainability United States Index
The Down Jones Sustainability United States Index is reviewed quarterly for possible weighting changes, based on free-float share counts, and reconstituted each year based on the updated results of comprehensive sustainability surveys, as compiled by research firm SAM Group. The surveys measure company efforts in energy conservation, corporate governance, shareholder relations and knowledge management, among many others.
The index consists of companies evaluated against general market benchmarks as well as their own industry peers. As with other members of the Dow Jones Sustainability Index family, the U.S. index is also presented without businesses engaged in the production or distribution of alcohol, tobacco, firearms and gambling.
Shareholders in the U.S. and abroad increasingly look for their investments to have sustainability plans or programs firmly in place. As such, companies that are chosen for inclusion in the sustainability indexes may use them as a platform to attract socially conscious investors and green investors.
Dow Jones Sustainability Indices History
The Dow Jones Sustainability Indices (DJSI), which launched in 1999, are a series of indices that assess sustainability efforts of publicly traded companies. The indices are a benchmark for investors and companies alike. In 2012, S&P Indices and Dow Jones Indexes decided to merge to form the S&P Dow Jones Indices. Today, S&P Dow Jones Indices and RobecoSAM split management duties of the indices.
The DJSI is based on an analysis of certain factors related to corporate economic, environmental and social performance. It evaluates issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and fair labor practices. A growing trend, particularly amid increasingly stringent investors screens, is to reject companies that do not operate in a sustainable or ethical manner in their business practice.
The DJSI family contains one main global index, the DJSI World, and several other indexes based on geographic regions. Among them are Europe, Nordic, North America and Asia Pacific. The DJSI also contains industry-specific indexes called blue chip indexes. In addition, the DJSI methodology facilitates the design, development and delivery of customized sustainability indexes.