Great Reasons for Planning Ahead for DJSI Season

Key benefits of early DJSI preparation
Great Reasons for Planning Ahead for DJSI Season
Publ. date 17 Nov 2022
To be well prepared for the upcoming Dow Jones Sustainability Index (DJSI) season, it is recommendable to take a forward-looking approach and start the preparation phase early. This article summarizes the benefits of preparing early for S&P Global's Corporate Sustainability Assessment (CSA) participation, suggests where to start, and what can be learned from a company that successfully increased its score due to early preparation in 2022.

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As investors and other stakeholders demonstrate an increasing interest in companies’ ESG-related risks and opportunities, it is essential for companies to identify and respond to sustainability challenges and keep the public informed about the company’s sustainability performance. Responding to ESG ratings and benchmarks is one way to increase transparency and gain stakeholders’ trust.

As one of the most recognized ESG benchmarks, participation in S&P Global’s Corporate Sustainability Assessment and inclusion (for eligible companies) in the related Dow Jones Sustainability Indices can result in significant benefits for organizations: the ability to track year-on-year progress, to compare against peers, and to give insights into your company’s ESG performance to S&P Global clients representing over US $26 trillion in assets under management.

Why prepare already for next year’s Dow Jones Sustainability Index season?

Starting early on the preparation for the CSA questionnaire allows companies to plan ahead, which enables early involvement of the responsible departments as well as (senior) management. Improvement actions may require lead time, such as collecting data from different business units or geographic locations, obtaining third-party verification, or updating policies that require Board approval. Starting with preparing for the questionnaire in Q4 or Q1 would allow for that lead time, while also leaving space for quality checks and finetuning questionnaire answers and supporting documentation.

Practical example: early preparation is rewarded with an increase of 12 points

The positive outcome of an early preparation was clearly demonstrated by one of Finch & Beak’s clients from the Machinery & Electrical Equipment industry, which resulted in an increase of 12 points in the 2022 assessment compared to the company’s ESG score in 2021. A strong characteristic of this company’s approach toward the CSA was the solid and very early involvement of senior-level stakeholders.

As the company was already on a journey of sustainability acceleration, its clear commitment to ESG-related topics as part of the company’s 2026 corporate strategy helped to set the right priorities. This enabled a fast implementation of short-term actions to prepare the company’s answers and documentation, as well as an agreement on strategic interventions for longer-term improvement.

Getting strong support from senior management is also a motivating factor for the involved employees and the sustainability team. Due to starting CSA preparation early enough, the project team at this company managed to engage with the internal topic owners responsible for areas within their field of expertise, such as human resources, risk management and procurement.

This allowed them to work closely together on the implementation of the recommended actions. Clear process lines have also contributed to this, for example by having content deep-dive calls, clear deadlines for delivery of input, review periods, and feedback discussion meetings in place.

DJSI support for efficient and effective preparation

Finch & Beak supports companies to improve the effectiveness of their ESG benchmarking efforts while increasing positive impact on society and the environment. In addition, the support will make it easier for your company to align with other benchmarks and ratings, such as CDP.

To help companies successfully complete the Corporate Sustainability Assessment, a DJSI support project is designed to leverage an early start to the process, beginning with the first project phase. As a first step, Finch & Beak will typically conduct an ESG transparency check on questions that require publicly available information. When performed in time, this allows companies to still incorporate additional information and data points in the annual reporting cycle, including management sign-off and external assurance.

A gap analysis is then performed, taking into account S&P Global’s requirements as well as the current status of the organization to identify potential gaps. In order to close these gaps, practical recommendations will be expressed in an action plan, including improvements on data availability, policies, processes and disclosures.

These recommendations can then be validated and agreed upon during deep-dive sessions, where topic owners can discuss the feasibility of the actions and agree to taking specific steps in the short and longer term. As soon as the questionnaire then opens up in Q2, the project members are already well-prepared to fill it out and to take next steps for long time improvement.

Ready to improve your company's ESG benchmark performance?

With more than 15 years of experience in Dow Jones Sustainability Index, Finch & Beak is a European leader in improving ESG performance. Interested in our support? Please download the service description in the download section at the top of the page or reach out to Gijs-Jan Groeneveld at gijs-jan@finchandbeak.com or +31 6 28 02 18 80.

Photo by Mary Taylor on Pexels

About Nathalie Martin

Passionate young sustainability professional, keen to give impulses and ideas towards a more sustainable economy.  nathalie@finchandbeak.com

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