Sustainability indices

What are sustainability indices?

Sustainability indices are stock market indices that evaluate the sustainability performance of companies.

Why do we have sustainability indices?

They look to synthesize — often with one piece of data, position or seal — complex concepts related with general company sustainability. The objective is to show the public which companies are acting responsibly when it comes to the environment.

Given that clients and end users are increasingly concerned with companies’ environmental policies, these indices look to summarize — with regards to investors searching for ethical projects — which companies are a Socially Responsible Investment (SRI). Not all indices are the same, nor do they measure the same factors. There are dozens of indices.

They are sometimes presented as an open list, limited to a specific number of companies, as is the case with the Dow Jones Sustainability Index (DJSI). On other indices, the companies are revealed one by one, as is the case with FTSE4Good. What they all share is an objective and rigorous work methodology that looks at a large number of factors in the work environment.

What is a sustainability index used for?

Some factors appear as a synthesis of questionnaires filled out by the committees of the companies being evaluated. Others evaluate levels of CO emissions, recycling performance, water use reduction, internal sustainability training policies, sustainability in R&D, and a long list of items with hundreds of measurable parameters.