British American Tobacco added to Dow Jones Sustainability Index as familiar brands lead the way

The S&P Dow Jones Sustainability Indices (DJSI) are considered the gold standard for corporative environmental, social and governance (ESG). The 2017 iteration of the report sees four UK-based companies named as industry leaders.

Royal Mail heads up the transportation category, InterContinental Hotels Group (IHG) leads the consumer services category, while CNH Industrial and Pearson PLC were also praised in their respective categories.

Notable additions to this year’s rankings include electronics firm Samsung, Colgate-Palmolive, General Motors and British American Tobacco (BAT). However, mining company Rio Tinto, consumer goods firm Reckitt Benckiser and energy company Enbridge, which is heavily involved in the North Dakota Pipeline, have all been deleted from the indices. BAT is the only tobacco company included in the DJSI.

DJSI commentary notes that companies and investors alike are still attempting to understand how business models can influence, or detract from, the aims of the Sustainable Development Goals (SDGs).

Analysis found that while 70% of the data set companies are aware of the need to understand how environmental and social profits and losses could be measured, less than 10% have viable valuation approaches in place today.

S&P Dow Jones Indices’ managing director and chairman of the index committee David Blitzer commented: “Many of the events witnessed so far in 2017 make it even more important for corporations around the globe to recognize sustainability, establish policies and manage their businesses in ways that support and increase sustainability of the global environment and the world’s leading businesses. The DJSI family provide a tool for investors to create asset allocations that can further sustainability.”

Leader response

Launched in 1999, the DJSI was the first global index to track leading sustainability-driven companies. This year, Peugeot, LG, UBS, Allianz and Coca-Cola all claimed industry leader rankings. In total, 3,400 companies were evaluated for inclusion this year, with just 149 making the European list.

Unilever once again ranked first in the Personal Products sector, the 18th time it has topped that particular category. The company scored 89 out of 100 overall, achieving industry-leading scores in 11 out of 25 categories.

Commenting on the results, Unilever’s senior vice president of sustainable business & communications Sue Garrard said: “DJSI is a key reference point for investors and other stakeholders who want to assess and benchmark our progress on sustainability – so we are delighted that our efforts have been recognised.

“This result demonstrates our unwavering commitment to the Unilever Sustainable Living Plan. It also reflects the dedication of people across Unilever, driven by our purpose to make sustainable living commonplace.”

Coca-Cola European Partners, the world’s largest independent Coca-Cola bottler by net sales, was listed on the DJSI for the second year running. It achieved the highest score on the Health and Nutrition, Packaging, Water Related Risks, Human Capital Development and Labour Practices sections of the assessment.

“This is a fantastic achievement for our new company as we work towards sustainable growth,” Coca-Cola European Partners’ chief executive Damian Gammell said.

“I firmly believe we can grow our business in a way that will make everyone proud – from our employees to our customers to our local communities. Our listing on the DJSI confirms that we are heading in the right direction. There is much more to do, and that’s why we’re working with The Coca-Cola Company to develop a sustainability strategy for Western Europe that will meaningfully address some of the biggest issues facing society.”

Elsewhere, AkzoNobel returned to the top of the DJSI for the fifth time in six years. The company, which recently committed to carbon neutrality by 2050, was placed first in the Chemicals industry group.

“It’s a great achievement to be leading our industry again,” AkzoNobel’s chief executive Thierry Vanlancker said. “We made a huge effort to improve in areas that needed to be addressed and being ranked first again proves the impact we can have by putting sustainability at the heart of our business strategy.”

“We’re well aware that just because we are leading the ranking again, we can’t afford to become complacent. As a leader in sustainability, we are playing a major role in transforming the industries in which we operate. We therefore need to keep improving in order to make the giant leaps required for us to create a more sustainable future.”

Matt Mace