Dow Jones Indexes and Sam, the sustainability investing boutique, have created the Dow Jones Sustainability World Enlarged Index on the back of investor demand for a broader sustainability index.
Due to be launched at the end of November, the new index tracks the performance of the most sustainable 20% of companies out of the largest 2,500 companies in the Dow Jones Global Total Stock Market Index.
The 513 components of the new index were selected according to SAM’s systematic corporate sustainability assessment, which analyses company performance in terms of economic, environmental and social criteria.
The make-up of the index will be reviewed on an annual basis, and is weighted according to free float market capitalization. There will be a subset index of 459 components that excludes companies from the following sectors: tobacco, alcohol, gambling, armament and firearms, and adult entertainment.
Rodrigo Amandi, managing director, Sam Indexes, said: “Sam Indexes has repeatedly received inquiries for a more extensive investment universe from institutional investors managing sustainability portfolios. It is inspiring to see the increasing importance investors attribute to sustainability criteria and we are looking forward to providing this benchmarking tool, while continually expanding our unique sustainability investing platform.”
Michael Petronella, president, Dow Jones Indexes, said: “This index launch reflects both our awareness of market demand and our readiness to respond to changing investor inclusion in the index continues to be an important barometer for companies that strive for long-term sustainability improvements.”
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