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October 2006
The results of the 2006 annual review for the Dow Jones Sustainability Indexes have been announced. Forty-nine of the 108 companies named to the North America Index are members of The Center for Corporate Citizenship at Boston College.
Launched in 1999, the Dow Jones Sustainability Indexes are the first global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. The Dow Jones Sustainability World Index covers the leading 10 percent of the world’s top 2500 companies in terms of economic, environmental and social criteria.
To be included, companies must meet rigorous criteria for marketing practices, corporate governance, environmental policy and management, environmental and social reporting, philanthropy and stakeholder engagement.
This year, the worldwide Index added 46 companies and deleted 36.
Being named to the Dow Jones Sustainability World Index is a coveted designation. “We are extremely proud of this external validation, which reinforces that Dow's focus on sustainability is on track. We see this as an important step towards setting the standard for sustainability in the chemical industry,” said David Graham, Dow's vice president, Environment, Health & Safety (EH&S). “This recognition is the direct result of the personal commitment of thousands of people at Dow to using our expertise in science and technology to address critical challenges facing our world.”
Dave Stangis, director of Corporate Responsibility for Intel shared similar sentiment. "We are proud of this very tangible recognition of the efforts of the more than 90,000 Intel employees around the world. It is through their efforts we can maintain our sustainability leadership."
Abbott was singled out as having the highest performance across the medical products group for environmental and social reporting; stakeholder engagement; brand management; labor practices; and supplier standards.
"We are proud to be recognized as a world leader in sustainable business practices," said Miles D. White, chairman and chief executive officer, Abbott. "This recognition is a testament to the outstanding work of the 65,000 Abbott employees who understand that social responsibility is fundamental to our culture and the way we do business."
Index reports on sustainability developments
The assessment results also provide detailed information about recent sustainability developments in the corporate world:
- The trend toward industry-specific sustainability management continues. Companies are getting increasingly educated about the specific sustainability risks and opportunities in their sector and continuously move beyond general aspects. Examples for this include waste-to-energy production of utility companies, digital inclusion in the communication technology industry, and closed-cycle bleaching in the paper industry.
- Competition increases for sustainability leadership. As sustainability gains recognition, an increasing number of companies are competing for sector sustainability leadership and differences between leading companies in most sectors are getting smaller.
- Huge discrepancies exist between companies concerning their operational risk management. Only few companies report that they have established systems to quantify and visualize operational risks with tools such as risk maps, stress testing, sensitivity analysis, etc.
- Leaders quantify the value of their brands. Companies care about their brands and invest heavily in brand management, but few report that they are actually able to quantify the values of their brands and the returns on their brand investments.
- Climate change continues to attract increased attention. More companies recognize that climate change will have a major impact on their future operations and product offering. Leading energy firms include a climate change impact assessment in their M&A due diligence. The top financial institutions leverage their climate change know-how gained for internal assessments to market new products and services that go beyond mere carbon emission trading (e.g. risk management systems, environmental impact assessments of potential investments, etc.)
- More global firms tailor their product offerings to the specific needs of developing countries. Mobile communication technology providers offer low budget mobile phones or install phone booths in under-developed regions. Consumer goods manufacturers adjust their global offering in terms of product packaging, product sizing, pricing and contents (e.g. adding iodine to salt).
- Overall, sustainability performance continues to advance across all sectors. At the same time, substantial room for progress in sustainability remains on the corporate agenda.
For more information on the Dow Jones Sustainability World Index visit http://www.sustainability-index.com and for information about benchmarking of sustainability performance see http://www.sam-group.com.
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