Dow Jones Sustainability North America Index

What Is the Dow Jones Sustainability North America Index?

The Dow Jones Sustainability North America Index, or DJSI North America, is a stock index that captures the top 20% of the largest 600 North American stocks in the S&P Global Broad Market Index (BMI) based on long-term economic, environmental, and social criteria.

It is not to be confused with the Dow Jones Sustainability North America 40 Index or the Dow Jones Sustainability United States 40 Index. Those subsets deal with the top 40 sustainability-driven companies in North America and in the U.S., respectively. They were launched in 2008, three years after the DJSI North America. 

Key Takeaways

  • The Dow Jones Sustainability North America Index comprises the top 20% of the largest 600 North American companies in the S&P Global BMI based on long-term economic, environmental, and social criteria.
  • The Dow Jones Sustainability North America Index is part of a larger family of Dow Jones Sustainability Indexes, representing different regions and countries.
  • The Dow Jones Sustainability North America 40 Index is a subset of the DJSI North America that looks at the top 40 sustainability-driven companies. 
  • The data used by the DJSI North America is self-reported by companies. That information, therefore, may be biased. 
  • Companies on the DJSI North America are chosen through a complicated weighting system to identify the most sustainable companies in each industry.

Understanding the Dow Jones Sustainability North America Index

The Dow Jones Sustainability Index (DJSI) is a collection of indexes launched in 1999 as the first global sustainability benchmarks. The focus of these Dow Jones Indexes is to evaluate the sustainability of various publicly traded companies. The indices are a partnership between S&P Dow Jones Indices and RobecoSAM.

Among those indices is the Dow Jones Sustainability North America Index, which was created in 2005 in conjunction with its subdivision, the Dow Jones Sustainability United States Index, following the creation of the Dow Jones Sustainability World Index in 1999.

Many companies that become members of this index see it as an opportunity to enhance shareholder awareness of their environmental efforts. They often issue press releases to announce their index membership and use the status to advertise their environmental, social, and governance (ESG) leadership.

Since the DJSI North America relies upon data that companies self-report to RobecoSAM, it is important to understand that the information they provide may be biased.

Stocks and Sectors

As of March 12, 2022, the number of constituents in the Dow Jones Sustainability North America Index totaled 150. The information technology sector was the most represented, accounting for just over 35% of the index.

The DJSI North America regularly posts higher annualized returns than the S&P Global BMI.

The DJSI North America reported a carbon footprint nearly 50% better than the more inclusive S&P Global BMI. Fossil fuel reserve emissions averaged less than half of those reported for the S&P Global BMI, and the DJSI North America performed better in carbon efficiency as well.

Requirements for DJSI North America Companies

The DJSI North America is weighted based on free-float market capitalization, and changes are made annually in September based on updated sustainability scores. The corporate sustainability of each company is assessed through an intricate weighting system that Dow Jones uses to evaluate economic, environmental, and social metrics, including:

  • Risk and crisis management in the event of environmental disasters
  • Supply chain standards
  • Climate change mitigation
  • Operational eco-efficiency
  • Labor practices and human rights
  • Human capital development

Candidate firms are further assessed based on media and stakeholder commentary and industry-specific criteria. Companies are reevaluated each year; those that fail to show consistent progress may be removed from the index. The top three holdings of the DJSI North America as of March 12, 2022, were Microsoft Corp., Alphabet, Inc., and Nvidia Corp.

What Does the Dow Jones Sustainability Index Measure?

The Dow Jones Sustainability Index measures a weighted average of the stock prices of major companies that meet certain sustainability criteria. In addition to the DJSI World Index, there are also several DJSI sub-indexes that measure only the companies in a specific country or region. The DJSI family also includes sub-indexes that exclude alcohol, tobacco, firearms, or adult entertainment.

How Do You Invest in the Dow Jones Sustainability Index?

You can invest in the Dow Jones Sustainability Index North America by buying shares of an index fund that targets the DJSI North America. These funds invest in the shares of companies represented on the index, effectively mirroring the performance of the index. For example, the iShares Dow Jones Global Sustainability Screened UCITS ETF contains a basket of companies represented on the DJSI, excluding those involved in alcohol, tobacco, firearms, and gambling.

What Are the Criteria for Companies on the Dow Jones Sustainability Index?

The Dow Jones Sustainability Index is comprised of companies included in the S&P Global BMI that have been assessed for sustainability factors, according to the S&P Global Corporate Sustainability Assessment. Only the companies with the highest sustainability scores from each industry are represented in the DJSI indexes. The composition of each index is reviewed every September, based on each company's ESG scores.

Article Sources
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  1. S&P Global. "Dow Jones Sustainability North America Composite Index: Overview."

  2. S&P Global. "CSA History Timeline."

  3. S&P Global. "Dow Jones Sustainability North America Composite Index: Quick Facts."

  4. S&P Global. "Dow Jones Sustainability Indices Methodology."

  5. BlackRock. "iShares Dow Jones Global Sustainability Screened UCITS ETF."

  6. S&P Global. "DJSI Index Family."

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