SUSTAINABILITY INVESTMENT

Increasingly, investors are diversifying their portfolios by investing in companies that set industry-wide best practices with regard to sustainability.

Two factors drive this development.
First, the concept of corporate sustainability is attractive to investors because it aims to increase long-term shareholder value. Since corporate sustainability performance can now be financially quantified, they now have an investable corporate sustainability concept. Second, sustainability leaders are increasingly expected to show superior performance and favourable risk/return profiles. A growing number of investors is convinced that sustainability is a catalyst for enlightened and disciplined management, and, thus, a crucial success factor.

What private and institutional investors needed was a global, rational, consistent, flexible and, most importantly, investable index to benchmark the performance of their sustainability investments. They also needed an independent reliable index as a basis for derivatives and funds focused on sustainability companies.

In response, Dow Jones Indexes, STOXX Limited and SAM Group launched the Dow Jones Sustainability Indexes (DJSI). The indexes reflect the combined expertise and resources of the vast experience of the three partners: the publisher of the world's best known stock indicator, Dow Jones Indexes, the leading European index provider, STOXX Limited, and the internationally renowned pioneer in sustainability investing, SAM Group.

The DJSI components are selected by a systematic corporate sustainability assessment and include only the leading sustainability companies' worldwide. The DJSI therefore provide a bridge between companies implementing sustainability principles and investors wishing to profit from their superior performance and favourable risk/return profiles.

For investors, the integrity of the corporate sustainability assessment and the index calculation ensures that the DJSI are independent, reliable and investable sustainability indexes.

For companies, the DJSI provides a financial quantification of their sustainability strategy and their management of sustainability opportunities, risks and costs. Because "What gets measured, gets done", they will be motivated to increase long-term shareholder value by integrating economic, environmental and social factors in their business strategies.

The DJSI will provide investors and companies with insight into the trends and events driving global supply and demand of sustainable products and services. This will bring a greater appreciation of the benefits of integrating sustainability principles in both corporate and investment strategies.