Corporate Citizenship Sustainability, Simplified.
DJSI: Understanding your score October 1, 2014
Asking questions:
Agenda
How does DJSI measure sustainability?
How are the questions scored?
You got your score – but what does it mean?
Weightings: which questions are most important?
Percentiles: where did you rank?
Gap to best: how close are you to the top?
Targeting future improvement
Corporate Citizenship Webinar
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Presenters Megan DeYoung – Director Megan manages Corporate Citizenship’s North American practice and works with clients to develop and implement citizenship strategies that are closely tied with the business and to communicate clients’ initiatives to internal and external stakeholders. She has worked with many global companies including AbbVie, McGraw Hill Financial, and Xylem.
Peter Truesdale – Associate Director Peter is an Associate Director of Corporate Citizenship, he specializes in a number of aspects: reporting, report assurance, and external standards. He has worked with a range of global companies and professional firms including ARM Holdings, ANZ, Cisco and Mars.
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About Us: Corporate Citizenship
1997
Depth and Breadth
Society and Environment
Business Impact
FTSE 100 and Fortune 500 Long experience working with companies on DJSI Sustainability, simplified
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How does DJSI measure sustainability? The DJSI is a financial index. It allows investors to track the financial performance of, and make investments in, leading sustainability-driven companies. Companies are assessed by RobecoSAM, an international investment company. Every year, more than 3,000 of the world’s largest companies are invited to fill out a questionnaire. By tracking sustainability criteria, RobecoSAM aims to identify companies bestplaced to achieve long-term growth in a competitive and changing world. There are three criteria: - Economic criteria: codes of conduct, compliance, corruption & bribery - Environmental criteria: eco-efficiency, environmental reporting - Social criteria: corporate citizenship, human capital development, labour practice indicators, talent attraction & retention
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How are the questions scored? Transparency/Disclosure questions require you to demonstrate that there are policies and procedures in place for the management of sustainability issues, and that certain metrics are tracked and reported. Extra marks are given where certain complete policy documents are publicly available online. Performance questions assess companies on a specific KPIs. Performance is scored versus either the trend in performance over time, performance in the rest of the industry, an external benchmark, or a combination of these. In general, new questions tend to be focused first on Disclosure and then transition to Performance as data collection and reporting matures (see the changes to the Human Capital Development criterion in 2014). In 2014, DJSI introduced a new methodology for scoring performance in comparison to other companies in the industry. It is likely that this will be used more frequently and receive a higher weighting in future years. Sustainability, simplified
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You got your scorecard – but what does it mean? It’s not all about the headline figure!
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Weightings: which questions are most important? Each industry has a different mix of criteria. Each criterion accounts for a certain percentage of the marks, based on its weighting. Examining the weightings gives you valuable information about the areas which RobecoSAM believes to be most important to sustainability in your industry. By targeting highly weighted criteria for improvement, you have a greater chance of improving your overall score.
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Percentiles: where did you rank? Percentile ranking
The percentile ranking gives the percentage of assessed companies in your industry who received a lower score than you.
100
100 97 95 95
This therefore tells you where you ranked (overall and for each criterion) versus the rest of your industry.
95 95 90 90
The lower the percentile, the more companies scored higher than you.
90 90 87 87 87
Low percentiles therefore indicate that there is a considerable opportunity to “catch up” with your competitors.
87 87 85 85 82 79
67 54
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Gap to best: how close are you to the top?
Weighted gap to best 1.20 1.02
The industry best score tells you the highest score, for each criterion, achieved by any company in your industry (not necessarily the industry leader).
0.80 0.74
0.70 0.70 0.60 0.60
Combining with the weighting tells you the amount you could have added to your headline score if you had achieved the industry best.
0.60 0.42 0.40 0.36
Targeting criteria with larger gaps is a good way of increasing your headline score.
0.35 0.32 0.30 0.24 0.18 0.00 0.00 0.00 0.00 0.00
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Targeting future improvement  The DJSI scorecard helps you identify areas in which there is potential to increase your score.
 Working out the best ways to do this means analysing each individual question: CHALLENGE
SOLUTION
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Thank you – any questions?
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Contact us Megan DeYoung Director
Peter Truesdale Associate Director
Corporate Citizenship 241 Centre Street 4th Floor New York, NY 10013 United States
Corporate Citizenship 5th Floor, Holborn Gate 26 Southampton Buildings, London, WC2A 1PQ United Kingdom
E: megan.deyoung@corporate-citizenship.com T: 1 212 226 9610 W: www.corporate-citizenship.com
E: peter.truesdale@corporate-citizenship.com T: 44 (0)20 7861 1631 W: www.corporate-citizenship.com
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