DESIGN.
1hrs
Finding out More
Only minimal research was done on sustainability indexes which wasn't enough to show on here.
From the research I found that:
"Sustainability indexes are instruments to measure the responsibility of a certain company in social and environmental areas. The more they take these aspects into account as they develop their business, the higher the score they will obtain."
Why are sustainability indexes needed?
“Sustainability indexes are designed and built with the goal of providing information to institutional and retail investors that value the importance of the companies’ environmental and social responsibility and corporate governance in their everyday management, in addition to economic results, in their decisions to purchase shares, ”notes Beatriz Fernández, environmentalist and professor at the Instituto Superior de Medioambiente (Higher Institute of the Environment).
Victor Viñuales, the Director of Ecodes and CSR Professor at the IE Business School, stresses the difference between socially responsible investments and other investments: “Instead of asking the three classic questions: the interest it gives, the security, and availability, it adds the questions ‘where does this go’ and ‘what am I supporting with my money’”.
How are sustainability indexes built?
Independent companies exist that are specialized in designing the methodology for the assessment, and they also select the companies that will be part of the analysis process. “These assessment processes, which are repeated at different times, determine which are the best companies based on their results in economic, environmental and social areas,” notes Fernández Viñuales, who adds that “one of the problems that could appear is finding companies with internal communication problems, whose underlying problems are unknown to the rest of the company.”
Which sustainability indexes currently exist?
"There are basically three sustainability indexes that have the largest impact and representativeness on an international level. In the U.S., it’s Domini 400 social index; in Europe the two most popular are the Dow Jones Sustainability Indexes and FTSE4Good.
Dow Jones Sustainability Indices evaluates three spheres of action (economic, environmental and social) based on approximately 24 parameters. Their scrutiny amounts to the three scores indicated above and an overall score."
(This info was found from the website below)
Main Learning Objectives