ESG research firms are looking at your company…are you ready?

By Mike Wallace, Managing Director, and Sarah Corrigan, Associate Consultant

Early autumn brings the unveiling of the Dow Jones Sustainability Indices as companies all over the world learn whether they have what it takes to be recognized on one of the preeminent sustainability indices.

When any award is announced, the first question is typically “Who won?” The second is “Who decided?” In the case of DJSI, the answer to the first question includes a list of 16 companies that have made the list each of the last 15 years. The answer to the second question is RobecoSAM, an investment firm based in Zurich, Switzerland, that specializes in sustainability investing.

Research firms specializing in environmental, social and governance analysis are experiencing a growth in the demand for their services as investors and other influential users become more attuned to the utility and availability of such information. Such firms provide investors (both asset owners and asset managers) with the tools and data to compare and contrast ESG performance of companies across sectors and regions. Quantitative metrics and consolidated scoring allows these comparisons to be made in real time, a feature favored by investment analysts who don’t have time to read your latest sustainability report cover to cover. Considering the growing number of PRI Signatories and CDP Signatories, the experts analyzing such ESG performance information quickly are multiplying.

To read the full post please visit GreenBiz.com.

What Does Perfection Look Like? Carbon Disclosure Project’s 2012 Results

On Wednesday, September 12, the Carbon Disclosure Project (CDP) released the results from its 2012 survey. Based on the results, not only have overall scores improved from its Global and S&P 500 survey respondents, but the average disclosure score required to gain entry on the Carbon Disclosure Leadership Index (CDLI) increased by 4 points (11%) to 92. For the first time since the CDP survey began, two companies, Bayer and Nestle, scored full marks – a perfect score of 100! The criteria to gain entry and remain in these Indices are more stringent than ever.

Nestle demonstrates its commitment to reducing emissions from energy efficiency, switching to cleaner fuels and investing in and consuming renewable energy sources. Bayer has staked part of its business strategy on product innovation and investing in healthcare solutions with long-term societal benefits. Both companies also strive to maintain transparency and reporting practices considered best in-class across all industries.

CDP states that leaders have in common an explicit long-term approach to managing the opportunities and risks presented by climate change. Maturity in climate change management and clarity in decision-making with regard to the associated opportunities and risks help differentiate the companies recognized as leaders. The leaders realize consistent operational performance gains including lower energy costs, low-carbon energy use, increased productivity and the successful commercialization of highly resource efficient and low-carbon energy products and services. 

Another key take away from the 2012 CDP results is that investors expect higher levels of transparency and environmental, social and governance (ESG) information. The body of data continues to show a strong correlation between greater transparency and robust non-financial reporting and market outperformance compared to companies with poor records of transparency or weak ESG disclosures.   From the public’s and the investors’ perspective, full CDP and ESG disclosures lead to better long-term value creation.

 And what could be better than a perfect 100?

 –Christopher Thomas

About Friday Carbon Facts – a new series of brief articles and blogs about greenhouse gas emissions and carbon management. One article each month will focus on carbon management trends or GHG mitigation efforts based in a developing economy.

Water Leaks into CDP, DJSI, GRI and Others

Imagine a world where there is a global war fought over a natural resource that makes up, in some cases, 70% of our human bodies.  We have to melt snow for water supply, landscaping is illegal and our water consumption is controlled by the government.  This may sound extreme, but the global water crisis is gaining speed.

Dow and SAM Release 2010 DJSI Changes

First published in 1999, the Dow Jones Sustainability Index (DJSI) is one of the most established and mainstream environmental, social and governance (ESG) indices and sustainability benchmarks in the world.  DJSI is backed by Dow Jones and conducted by SAM, a back-end ESG researcher focused exclusively on Sustainability Investing.  Receiving a spot on the DJSI is one of the most prestigious honors for sustainably-focused companies.

The DJSI/SAM data collection relies upon a comprehensive questionnaire, self-reporting, industry specific factors and media and stakeholder input.  On September 9, 2010 the 2010 DJSI results were announced.  On October 8, 2010 SAM identified a problem with its software, admitted that the issue might affect the 2010 DJSI outcomes and stepped into action to review and mitigate the result discrepancies.  Today, November 4, 2010, SAM announced the newest DJSI additions, deletions and adjustments to global supersector leaders.  Changes to the 2010 DJSI include:

• DJSI World: 8 additions, 3 deletions
• DJSI North America: 2 additions, 1 deletion
• DJSI Europe: 8 additions, 2 deletions
• DJSI Asia Pacific: 2 additions
• DJSI Korea: No changes

BF and USBCSD to host free DJSI webinar

BrownFlynn and USBCSD are partnering to host a free webinar entitled: “Dow Jones Sustainability Index—Basics. Benefits. Best Practices. A BrownFlynn and USBCSD webinar.” on October 27, 2010 from 1-2pm EST. Guest panelists include Alcoa, Owens Corning and ConocoPhillips. For more information and to register, please click here.