Esi PPT Group9 DivB

Sustainability Indices
Archit Aggarwal
Abhiram PVK B047
Deepika Raghuwanshi B051
Mayank Kishore
Rahul Chawla
Ritika Mandora
Rishabh Prasad B050
Contents
Introduction
Evolution of Indices
Types of Sustainability Index
Dow Jones Sustainability Index
Environment Sustainability Index
Energy Emergy Sustainability Index
Company examples and future
Advantages
Conclusion
Sustainability Index
A sustainability index is an aggregate sustainability indicator that

combines multiple sources of data.
A system that measures the financial results of companies that try

to protect the environment rather than just make a quick profit.
A list of product information provided for consumers who want

to understand the process involved in making the products they
buy and how that process affects the environment.
Sustainability Dashboard
The International Institute for Sustainable Development has

produced a "Dashboard of Sustainability.
It is a free non-commercial software package that illustrates the

complex relationships among economic, social and environmental
issues".
This is based on Sustainable Development Indicators Prepared for

the United Nations Division for Sustainable Development (UNDSD)DECEMBER 2005.
Types
Evolution
International Institute for Sustainable Development sample policy

framework
In 1996 the International Institute for Sustainable Development developed

a Sample Policy Framework, which proposed that a sustainability index
"...would give decision-makers tools to rate policies and programs against
each other"
Dow Jones
DJSI, launched in 1999, are set of global sustainability benchmarks
Maintained collaboratively by S&P Dow Jones Indices and RobecoSAM

Geographical Breakdown Index
Index
DJSI World
Dow Jones Sustainability World

Dow Jones Sustainability World Enlarged
Dow Jones Sustainability Emerging Markets
DJSI Regions
Dow Jones Sustainability Asia/Pacific

Dow Jones Sustainability Europe
Dow Jones Sustainability North America
DJSI Countries
Dow Jones Sustainability Australia

Dow Jones Sustainability Canada Select 25
Dow Jones Sustainability Korea
Assessment Criteria
%
33%
100%
57%
33%
47%
33%
Economic
Dimension
Social
Dimension
Environmental
Dimension
Total
Industry Criteria
The graph above is illustrative of the approximate weightings
General Criteria
Criteria & Weightings

Economic
Weighting (in%)
Corporate Governance
6.0
Risk & Crisis Management
6.0
Codes of Conduct/Compliance/Anti-Corruption & Bribery
6.0
Industry Specific Criteria
Depends on Industry
Environmental
Weighting (in%)
Environmental Reporting*
3.0
Depends on Industry
Social
Weighting (in%)
Human Capital Development
5.5
Talent Attraction & Retention
5.5
Labor Practice Indicators
5.0
Corporate Citizenship / Philanthropy
3.0
Social Reporting*
3.0
Depends on Industry
*Criteria assessed based on publicly available information only
Criticism
Self-reported
data
Only large
companies
included
Biased
Information
Company
questionnai
re
Company
documentation
Company
contact
Media &
stakeholder
analysis
Skewed
towards
economic
criteria
Energy, Emergy and Sustainability Index
Finding means for the best ends
Energy dimensions are analysed for the best sustainability

solution
Performance dimensions are to be kept in mind for a

perfect solution
Data is of prime importance
Indias Current Position

Ranks 119 in the ratings given by WEC
Increase in investments needed
More proactive approach

Guidance from more developed countries
MSCI Global Environmental Indexes
Environmental Indexes are methods by which investors can identify opportunities to

evaluate low carbon investment assets.
Benchmark ESG(Environmental, social and governance). Making climate friendly

investments and make money.
Stranded assets such as coal or fossil fuel reserves owned by utilities will be written off
if these Indices are not developed as solutions
MSCI ESG Environmental Indexes provide Low Carbon, Fossil Fuels Exclusion
and Thematic alternatives for investors.
The MSCI Low Carbon Indexes
The MSCI Global Fossil Fuels Exclusion Indexes
The MSCI Thematic Indexes are intended to identify companies with positive
environmental impact for investors looking for thematic investment opportunities.
The MSCI Global Environment Index
is comprised of the following sub-indexes: MSCI Global Alternative Energy

Index, MSCI Global Clean Technology Index, MSCI Global Green Building
Index, MSCI Global Sustainable Water Index and MSCI Global Pollution
Prevention Index.
The MSCI Global Climate Index
is an equal weighted basket of 100 leading companies for climate change.

Index constituents are selected for their involvement in three environmental
themes: Renewable Energy, Clean Technology & Efficiency, and Future Fuels.
Green Bond Market :
Liquid financial instruments to raise funds dedicated to climate mitigation, adaption

and environment projects
Since 2008, the World Bank has issued more than $7 billion in green bonds in 17
currencies, and the International Finance Corporation has issued $3.7 billion in
green bonds
The World Bank and IFC have helped pioneer the green bond market and raise
awareness about the opportunities in climate-friendly investment
Proceeds from World Bank and IFC green bonds are used to support renewable
energy, energy efficiency, sustainable transportation and other low-carbon projects,
as well as financing for forest and watershed management, and infrastructure to
prevent climate-related flood damage and build climate resilience
Barclays and MSCI launch green bond index family
Environment Performance Index
Method of quantifying and assessing the environmental performance of

a state's policies.
Preceded by the Environmental Sustainability Index (ESI)
Both indices were developed by Yale University (Yale Center for

Environmental Law and Policy) and Columbia University in association
with the World Economic Forum and the Joint Research Centre of the
European Commission.
Ranks how well countries perform on high-priority environment issues

in two broad areas:
Protection of human health from environmental harm
Protection of ecosystems.
Assessment
Transforming raw data into comparable performance indicators
Standardizing the data according to population, land area, GDP, or other

factors, which make data comparable across the countries
Target, a high performance benchmark, is defined primarily by

international or national policy goals or established scientific thresholds
Scores are converted to a scale of 0 to 100 by some arithmetic

calculations, with 0 being the farthest and 100 being closest to the target.
Criticism
Does not meet its challenges completely, in particular due to the lack
of data for certain environmental policy areas
EPI does not meet its challenges completely, in particular due to the
lack of data for certain environmental policy areas:
Freshwater quality
Toxic chemical exposures
Municipal solid waste management
Nuclear safety
Wetlands loss
Agricultural soil quality and degradation
Recycling rates
Adaptation, vulnerability, and resiliency to climate change
Desertification
Company Examples
Henkel again among global leading companies in

sustainability.
TUI AG is the only tourism group listed in the Dow

Jones Sustainability Index.
Roche is the most sustainable healthcare company.
Campbell recognized for Integration of Sustainability and

Citizenship Efforts.
Benefits
Build Network
Meet people otherwise wouldnt
Share workload for DJSI response
Gain Buy-In
Illustrate link between corporate responsibility and business value
Make case for more robust corporate responsibility strategy
Improve Reporting
Uncover activities suitable for inclusion in reporting
Increase content with greater transparency
Elevate Reputation
Greater operational efficiencies; e. Gain recognition in investor community
Achieve equivalent of corporate responsibility Oscar
g., eliminate wasteful practices
Opportunities for new and growing markets >incremental revenue
Conservation of the environment
Conclusion
Strengths of ESI
Measures Environmental Sustainability
Permits cross-country comparisons
Method is transparent, reproducible
Enhances capacity to benchmark performance, guide policy, deepen understanding
Weaknesses
Assumes particular set of weights
Suffers from gaps in available data
Lacks time series data which limits ability to identify policy drivers
References
http://www.sustainability-indices.com/
http://www.djindexes.com/mdsidx/downloads/meth_info/Dow_Jones_Su
stainability_Indices_Methodology.pdf
http://www.djindexes.com/sustainability/
2014 Environmental Performance Index Report
http://epi.yale.edu/epi
http://www.ecologic.eu
http://www.currentscience.ac.in/Volumes/104/04/0435.pdf
http://www.huffingtonpost.com/angel-hsu/the-2014-environmentalpe_b_4797786.html
http://www.worldenergy.org/

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Sustainability Indices

Types of Sustainability Index

Dow Jones Sustainability Index

Environment Sustainability Index

Energy Emergy Sustainability Index

Company examples and future

A sustainability index is an aggregate sustainability indicator that

A system that measures the financial results of companies that try

A list of product information provided for consumers who want

The International Institute for Sustainable Development has

It is a free non-commercial software package that illustrates the

This is based on Sustainable Development Indicators Prepared for

International Institute for Sustainable Development sample policy

In 1996 the International Institute for Sustainable Development developed

DJSI, launched in 1999, are set of global sustainability benchmarks

Maintained collaboratively by S&P Dow Jones Indices and RobecoSAM

Dow Jones Sustainability World

Dow Jones Sustainability Asia/Pacific

Dow Jones Sustainability Australia

The graph above is illustrative of the approximate weightings

Criteria & Weightings

Risk & Crisis Management

Codes of Conduct/Compliance/Anti-Corruption & Bribery

Industry Specific Criteria

Industry Specific Criteria

Human Capital Development

Talent Attraction & Retention

Labor Practice Indicators

Corporate Citizenship / Philanthropy

Industry Specific Criteria

*Criteria assessed based on publicly available information only

Energy, Emergy and Sustainability Index

Finding means for the best ends

Energy dimensions are analysed for the best sustainability

Performance dimensions are to be kept in mind for a

Data is of prime importance

Indias Current Position

More proactive approach

MSCI Global Environmental Indexes

Environmental Indexes are methods by which investors can identify opportunities to

Benchmark ESG(Environmental, social and governance). Making climate friendly

MSCI Global Environmental Indexes

The MSCI Low Carbon Indexes

The MSCI Global Fossil Fuels Exclusion Indexes

The MSCI Global Environment Index

is comprised of the following sub-indexes: MSCI Global Alternative Energy

The MSCI Global Climate Index

is an equal weighted basket of 100 leading companies for climate change.

MSCI Global Environmental Indexes

Green Bond Market :

Liquid financial instruments to raise funds dedicated to climate mitigation, adaption

Barclays and MSCI launch green bond index family

Environment Performance Index

Method of quantifying and assessing the environmental performance of

Preceded by the Environmental Sustainability Index (ESI)

Both indices were developed by Yale University (Yale Center for

Ranks how well countries perform on high-priority environment issues

Protection of human health from environmental harm