RobecoSAM Yearbook 2016: Emerging Risks and Opportunities

Raising the bar in respond to changing demands in ESG-investing
RobecoSAM Yearbook 2016: Emerging Risks and Opportunities
Publ. date 20 Jan 2016
Increasingly, companies consider sustainability not only as a means of mitigating or avoiding risks, but also for seizing new opportunities that can give them a competitive edge. In line with these developments, changing investor demands and business environments have been driving change in the DJSI-assessment.

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For example, when the tax strategy criterion was introduced in 2014, it was initially received with mixed responses. The following year, reflecting the fact that tax transparency had made it onto companies’ corporate agenda, almost twice as many companies answered the tax strategy questions. Acting on investors’ growing interest in seeing companies balance short-term financial performance with long-term value creation,  in 2015 Corporate Governance and Risk Management were subject to extensive changes. The new focus moved towards the integration of long term perspectives into companies’ risk management strategies and executive compensation frameworks.

About the Dow Jones Sustainability Indices 

Last year, the Dow Jones Sustainability Indices (DJSI) celebrated their 15th anniversary, making them the patriarch of global sustainability indices in the world. Over time the DJSI has been recognized as one of the world’s most credible sustainability ratings. Last year, 864 of the world’s largest organizations participated, demonstrating that sustainability has been broadly recognized as a key driver for business performance. The feedback that companies receive at the end of each assessment  and in addition the powerful benchmarking capabilities across 59 industries continue to serve as a tool for global players to strengthen their sustainability program and drive progress.

 

Successful companies in the 2015 DJSI

In line with the Finch & Beak study of “Avoiding the Reporting Trap”, the results of the 2015 assessment demonstrate that average performers typically earn relatively high scores in compliance-driven criteria such as codes of conduct and corporate governance, but lag behind when it comes to value creation on topics such as operational-eco efficiency and human capital development. In the new yearbook, RobecoSAM noted the biggest year-on-year improvements on the social and environmental reporting criteria, illustrating a sign of the maturing level of materiality-driven reporting among listed companies.

Leaders create value beyond compliance

Telenet, industry leader of the media industry, continues to show leadership in developing effective solutions to the environmental, demographic, and legislative challenges currently facing the media industry. Its sustainability program ensures that its sustainability and business strategy are linked by focusing on delivering a superior customer experience and maintaining operational excellence. Liberty Global, Telenet's majority shareholder, further strengthens its position as part of the silver class. 

In the professional services industry Randstad Holding made a leap back into the index ending up in the gold class as a result of a strong focus on social issues such as Human Capital Development earning them the title of industry mover.

The chemicals industry seems characterized by a high level of competition on sustainability with no less than ten companies classified as gold, silver and bronze class players. AkzoNobel is the industry leader closely followed by gold class contender DSM in a sector where innovation management and product stewardship are key criteria.

In the food industry, group leader Unilever leverages the advantages of a solid reputation as a sustainable brand while at the same time addressing changing consumer needs and reducing its environmental footprint and costs.

Upcoming changes in the 2016 DJSI-assessment

Changes in the upcoming questionnaire have not yet been fully communicated. What is known is that, to further enhance quality, the questionnaire has been completely reviewed on the relevance of industry materialities. The outcome of this exercise is an overall reduction in used criteria of 6.7% affecting impact of 4-22% of criteria within individual questionnaires.  An overview of changes will be shared by RobecoSAM, together with all companies invited to the 2016 Corporate Sustainability Assessment in early February and will be published together with all official dates.

Finch & Beak, the gold class DJSI expert

With more than 10 years of experience in Dow Jones Sustainability Index support and a long-term collaboration with RobecoSAM, Finch & Beak is one of Europe’s leading experts in assisting companies with their submission to ESG benchmarks.  Our work for (ex-) industry group leaders is characterized by a pragmatic approach that leverages existing assets in the short term, while identifying opportunities for strategic development in the future. This method proves its success by the fact that all our DJSI customers in 2015 were listed in the Dow Jones Sustainability World Index, and more than half of them ranked in the top 1% of their industry.

Striving for inclusion or industry leadership in the DJSI ?

If your company interested in participating in the 2016 assessment, or want to improve its current DJSI performance please contact Josée van der Hoek today via Josee@finchandbeak.com.

Image source: Phil Roeder, Flickr 

About Josée van der Hoek

Experienced strategic issues management specialist with expertise in strategy development, food waste and DJSI. | josee@finchandbeak.com

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