S&P Dow Jones Indices (S&P DJI) announced the results of its annual rebalancing and reconstitution assessments of its preeminent Dow Jones Sustainability Indices (DJSI), its series of global, regional and country benchmarks, measuring the performance of companies using ESG criteria.

Image via ESGToday

High profile changes to the DJSI North America index include the addition of Eli Lilly, Walmart and Disney, and the deletion from the index of Texas Instruments, UPS and Starbucks.

The DJSI are a series of indices designed to allow the creation of portfolios that integrate sustainability considerations by tracking the performance of the world’s leading companies in terms of environmental, social and governance criteria. S&P DJI created the index in 1999 in collaboration with Sustainable Asset Management Group (SAM), which is now a part of S&P Global.

The key factor in selecting constituents for a DJSI index is a company’s S&P Global ESG Score, calculated under S&P Global’s annual Corporate Sustainability Assessment (CSA). For the 2022 review, 3,519 companies eligible for inclusion were invited to participate, with a record 1,728 actively participating, up 9% over the prior year.

The 2022 CSA included several significant methodology changes, including a focus on capturing net zero commitments and alignment of climate targets with the Science Based Targets initiative, the introduction of decarbonization strategy as a criteria, capturing actions taken by financial institutions to manage the climate impact of their lending and investing activities, updates to occupational health and safety factors, and access to healthcare, among others.

The CSA also added a new “Circular fashion” criteria for Textiles, Apparel & Luxury Goods industry, aimed at assessing company commitments and programs to accelerate the transition from a linear to a circular business model. According to S&P Global, 31% of the sector’s assessed companies have a public commitment in place to integrate circular fashion principles across their operations.

Top additions and deletions by market cap from the DJSI indices include:

DJSI World:

• Additions: TotalEnergies, Canadian Pacific Raliway, Moody’s, Hess, Dow
• Deletions: Caterpillar, Sanofi, Northrop Grumman, Zurich Insurance, Rio Tinto

DJSI North America:

• Additions:  Eli Lilly, Merck, PepsiCo, Walmart, Disney
• Deletions: Texas Instruments, Comcast, Amgen, UPS, Starbucks

DJSI Europe:

• Additions: TotalEnergies, Schneider Electric, Air Liquide, Capgemini, Publicis Groupe
• Deletions: Nestle, Zurich Insurance, RELX, London Stock Exchange Group, BMW

DJSI Asia Pacific:

• Additions: Dai-ichi Life, Advantest, Hong Kong and China Gas, Mitsui O.S.K. Lines, Keppel
• Deletions: Woolworths, Eisai, POSCO Holdings, Daiwa House, MS&AD Insurance

DJSI Emerging Markets:

• Additions: Hindustan Unilever, NetEase, Adani Enterprises, Mega Financial, Tata Motors
• Deletions: JSW Steel, Delta Electronics, PTT Exploration and Production, AngloGold Ashanti, President Chain Store

DJSI Australia:

• Additions: Macquarie Group, REA Group, ALS Limited, Worley, AMP
• Deletions: Woolworths, South32, Endeavour Group, AGL Energy, Downer EDI

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