The Dow Jones Sustainability Group Index. A successful investment concept

Transcription

1 The Dow Jones Index Signaustrasse 1 CH-8008 Zürich Tel Fax A successful investment concept New Century Enterprises World Resources Institute, Washington October 20, 1999

2 Portrait Founded in 1995 Independent asset management company Focus on sustainability in asset management One of Europe`s most experienced sustainability research team Institutional and private investment advisory and asset management 1

3 Organization Council Asset Management Private Equity Research Sustainable Performance (SPG) Investment Funds Individual Accounts Investor Relations Food & Agriculture Mobility Energy Technology Scenarios Rating Index 2

4 Co-Operation Partners Co-Founder SPG -Research (Risk Analysis) Co-Founder SPG Private Equity Sub Advisory-Mandate for Sustainable Investment Sub Advisory-Mandate for Credit Suisse Equity Fund Eco- Efficiency Sub Advisory-Mandate for Robeco Sustainable Investment Fund Dow Jones Index 3

5 Development of Investments Scope Increasing shareholder value by integrating economic, environmental and social growth opportunities into the business strategy. Economy Ecology Society Procurement Production Input Output Services Disposal Investment in Eco-Efficiency Competitive Advantage Social Responsible Investments Investments in Environmental Technology

6 Dow Jones Index Tracks the performance of the leading sustainabilitydriven companies worldwide Investable Index - Benchmark for Investments Standard for measuring - Financial Quantification of Fully integrated with the Dow Jones Global Index Family A partnership of 5

7 Methodology Dow Jones Global Index 2,000 Companies Biggest in Market Capitalization Company Selection Top 10% leading sustainability companies in 68 industries Advantages Representative DJSGI DJSGI 229 Components Liquid Objective Credible Worldwide coverage All industry coverage Large worldwide sustainability database 6

8 Dow Jones Index Key attributes Basis: Dow Jones Global Index (2000 companies of 73 industries, globally diversified) Top 10 % leading sustainability companies of all industries (225) Selection Process: based on Rating Calculation: Dow Jones Indexes Weighting: Capitalization Publication: Real time for the Price-Index ( W1SGI Bloomberg ) Total market capitalization: 4.3 Trio. USD Innovative investment-instrument for the next millennium 7

9 Selection Process Investable Universe Dow Jones Global Index Annual Review Allocation to Industry s Corporate Assessment Ranking within Industry s Index Component Selection Index Calculation Ongoing Review 8

10 Assessment General Criteria Industry Specific Criteria Corporate Evaluation System Corporate Assessment Questionnaire Corporate Policies & Reports Stakeholder Relations 9

11 Corporate Criteria Opportunities Business Strategy Organization of Policies Stakeholder Relations Corporate Governance Risks Strategic Risks Corporate risk management system Social minimum standards worldwide Codes of conduct Management of Opportunities Incentives for employees Intellectual capital management Virtual company Strategic & financial planning communication Management of Risks Environmental management system Environmental and social audits Contingency plans Corporate health and wellness Environmental liabilities Industry specific Opportunities Industry specific Risks 10

12 Corporate Evaluation System Opportunities 36 Policy and Strategy 12 Management of -related Opportunities 12 Industry specific -related Opportunities 12 Risks 36 Strategic Risks 12 Management of Risks 12 Industry specific -related Risks 12 Quality of Information 2 Maximum Score

13 Leading Companies (in Industry s) Basic Material StoraEnso Oy, Finland Dofasco Inc., Canada Independent Norsk Hydro ASA, Norway Marubeni Corp., Japan Consumer, cyclical BMW AG, Germany Fuji Photo Film Co. Ltd., Japan Industrial Tomra Systems ASA, Norway Honeywell Inc., USA Consumer, non-cyclical Bristol-Myers Squibb Co., USA Unilever Plc., Netherlands Technology ST Microelectronics N.V., France Fujitsu Ltd., Japan Energy Suncor Energy Inc., Canada Enbridge Inc. Canada Utilities TransAlta Corp., Canada Deutsche Telekom AG, Germany Financial Credit Suisse, CH Skandia Försäkrings AB, SW 12

14 Corporate Performance Bristol-Myers Squibb Co., Industry leader Pharmaceuticals Minimum Maximum Opportunities Risks Business Strategy Management of Sust bility Opportunities Management of Industry specific Opportunities Strategic Risks Management of Risks Management of Industry specific Risks Bristol-Myers Squibb 13 Industry Average

15 s sources of information Industry specific questionnaire Corporate reports (financial, environmental, health, safety, social, intellectual capital reports, etc) Corporate policies, standards and programs Audit reports concerning EHS management, social management, IT security, Year 2000, anti-bribery, emergency training, etc Management interviews Stakeholder information (e.g. critical shareholders, NGO s) Media Analysis (through Reuters Business Information System & Dow Jones Interactive) Network 14

16 World (December 31, June 30, 1999) 300 DJ / DJGI: Correlation: DJ Volatility:10.83% DJGI Volatility: 9.77% Tracking Error: 2.67% Index -- World DJGI -- World High correlation, low tracking error 15

17 5 Year Performance (January 1, 1994 June 30, 1999; US Dollar, Price Index) 320% 280% 274.3% 290.4% 240% 200% 177.5% 194.3% Performance 160% 120% 137.0% 95.9% 116.4% 108.7% 80% 40% 0% 10.7% -8.6% WORLD AMERICAS USA EUROPE PACIFIC -40% 16 DJSGI DJGI

18 Year Performance (January 1, 1994 June 30, 1999) Basic Materials 71.60% 26.6% 0% 10% 20% 30% 40% 50% 60% 70% 80% Cyclicals 80.6% 123.4% 0% 20% 40% 60% 80% 100% 120% 140% Energy % 89.6% 0% 20% 40% 60% 80% 100% 120% 140% 160% Financials 74.40% 68.5% 65% 66% 67% 68% 69% 70% 71% 72% 73% 74% 75% Independent -6.2% 73.5% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% Technology % 294.6% 0% 100% 200% 300% 400% 500% 600% Non-cyclical % 140.2% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% Industrials 69.20% 32.8% 0% 10% 20% 30% 40% 50% 60% 70% 80% Utilities 68.70% 88.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%