As of 2020, all DJSI-eligible companies are assessed by S&P Global, either based on their own provided input or through assessment based on public information alone. In addition, overall ESG scores are freely accessible online and question-level scores and publicly available data points will become available to subscribers of S&P Global Market Intelligence platform in the first half of 2021. This increased level of transparency, a development that’s also visible at Sustainalytics and MSCI, is beneficial for ESG-leaders and challenges ESG-laggards to step up their game.
While Sustainalytics and MSCI ratings are composed based on public information, DJSI-eligible companies can make sure that S&P Global has the most complete possible view on company performance by actively participating in the CSA. Demonstrated by record participation in 2020, more and more companies are seeing the benefits of this. While it does require time and effort, the results of DJSI-participation are visible in clear question-level score feedback, a rich source for learning and internal engagement, and increased exposure towards investors when companies achieve inclusion in the DJSI Indices.
In 2019, professors from HEC Paris investigated the effect of inclusion in the DJSI World Index on investor behavior, comparing firms in the DJSI to other firms that had a strong CSR performance but were not listed on the Dow Jones Sustainability Index. Their findings demonstrated that addition to, or continuation in the DJSI attracts more attention from financial analysts, with more reports being written about these firms. This eventually led to an increase in the percentage of shares held by long-term investors indicative of a trend that professional investors are increasingly paying more attention to CSR-visible firms.
If you’re planning to actively participate in the 2021 assessment, here are five things you can do to start the annual DJSI cycle on the right foot:
Check out the invited universe to find out for which indices your company is eligible – the list for 2021 is expected to be published in the coming weeks. Additionally, make sure to check your industry classification, as this impacts your company’s questionnaire structure, peer group, and level of competition. The assigned industry is based on the GICS classification and can change if your company has had major developments in its business model or key activities. Spin-offs, mergers, IPOs or other forms of restructuring can also lead to changes in eligibility or industry classification.
Gather all internal stakeholders for an internal kick-off session in which previous results are shared once again and plans for the upcoming weeks are drafted. Useful tools to develop your company’s project plan are:
Furthermore, on 8 February 2021, S&P Global has published the newest edition of the Sustainability Yearbook, which gives more detailed industry insights since also the absolute scores of all assessed companies are publicly available, including those of companies who were assessed based on public information
On March 2nd, Finch & Beak hosts an ESG Acceleration Webinar in collaboration with S&P Global. The session will shed light on the human resources-related criteria in the assessment, trends, methodology changes, and how to partner with the HR-department to improve your ESG performance. Sign up now to participate live or, if you can’t make it, receive a link to the recording afterwards.
Every year, S&P Global raises the bar in order to identify best-in-class companies that outperform their peers by demonstrating sustainability best practices – reflected in an updated questionnaire to stay sufficiently challenging. The methodology changes for 2021 are expected to be communicated by S&P Global around in March. However, preliminary methodology updates have already been shared for company consultation: check the Inbox of your company’s administrator account in the assessment portal to find the proposed developments for your sector.
With over 15 years of experience in ESG Benchmarking support including DJSI, Finch & Beak is one of Europe’s leading experts in improving our clients’ sustainability programs and ESG performance.
The Finch & Beak company vision is to accelerate sustainability. Our ESG and sustainability strategy work is characterized by a continuous improvement method that leverages existing assets in the short term while identifying opportunities for strategic development in the future.
In 2020 we supported customers across nine countries with their DJSI approach, and we welcomed more than 100 participants to the DJSI Expert Trainings we hosted in collaboration with SAM over the last four years. Our method proves its success by the fact that Finch & Beak’s average tenure of DJSI-clients is more than three years and that our DJSI-clients rate their satisfaction with an 8.9 on average.
If your organization is looking to accelerate its sustainability performance, please download our service description or contact Josée van der Hoek, Director and DJSI expert at email@example.com or call +34 6 82 04 83 01.