A sustainability index is a share index that highlights companies that are managed in a way which respects the environment and the society and not simply grasping for immediate profits. Examples of sustainability indexes are: FTSE4Good, Ethibel Sustainability Index (ESI) and Dow Jones Sustainability Indexes (DJSI). Being registered on a sustainability index will reward companies with increased respect and legitimacy and more practically by granting them access to the increasing number of socially and environmentally conscious investors.
The FTSE4Good Index series was launched in July 2001. It measures the performance of UK companies that meet globally recognized corporate responsibility standards.
It is similar to the FTSE All Share index, which lists shares according to market capitalization, but excludes tobacco, nuclear power and arms industries.
The FTSE4Good Index Series has been designed to measure the performance of companies that meet globally recognized corporate responsibility standards and to facilitate investment in those companies. FTSE is an independent company jointly owned by The Financial Times and the London Stock Exchange.
Dow Jones Sustainability Index
The Dow Jones Sustainability (DJSI) Indexes were launched in 1999 as the first global indexes tracking the financial performance of the leading sustainability-driven companies worldwide. They provide asset managers with reliable and objective benchmarks to manage sustainability portfolios.
Ethibel Sustainability Index
The Ethibel Sustainability Index (ESI) provides a comprehensive perspective on the financial performance of the world's leading companies in terms of sustainability for institutional investors, asset managers, banks and retail investors.
ESI is maintained and calculated by Standard & Poor's, widely recognized as a leading provider of equity indexes.
Find more information on the FTSE website, Financial Times Lexicon, the Ethibel website and Dow Jones Sustainability website
Source: FTSE, Financial Times, Ethibel, Sustainability Index