2015 DJSI Results
The Korea Productivity Center (KPC) announced the 2015 results of the annual Dow Jones Sustainability Indices (DJSI) On Sept. 10.
Jointly managed by global financial information provider Dow Jones Indices and Swiss-based sustainability evaluation agency SAM, DJSI assesses the quality of sustainability management based on economic, environmental, and social performances. The DJSI’s comprehensive questionnaire integrates economic, governance, social, and environmental issues with economic and financial ones. The assessment is also industry-specific and identifies the industry's best-in-class company, or industry leader, from 59 different industries on a global basis.
The high value of a membership on the DJSI and the competitive atmosphere of sustainability ratings and rankings signify that the index is in fact value generating. These days, stakeholders and consumers are demanding that firms demonstrate their commitment to sustainability and corporate ethics.
“The index suggests to businesses what they need and what should be done for sustainable growth and development. It is also the standard of corporate social responsibility for local companies wishing to compete at the same level as global players,” said Hong Soon-jik, chairman and CEO of the Korea Productivity Center. Consumers who want products and services from sustainable businesses and investors wishing to invest in such firms can refer to the index.
Although in the 80s and 90s South Korea emerged as a leading global economic center, firms in the country have seldom stood out as sustainability leaders. The rapid growth in the economy has brought about allegations of poor labor standards, un-checked pollution of the environment, human rights violations, and aggressive breaches of copyright. As seen in this year’s DJSI review, several South Korea-headquartered companies came out as the highest scoring firm in respective industries worldwide.
In fact, when asked about the demand to deliver sustainable products and services, the majority of Korean companies said that they felt pressure from investors and customers to deliver sustainable products and demonstrate that their companies fulfill corporate and social responsibilities. As such, a good reputation accompanied by membership on the DJSI helps a company in a substantial way.
The DJSI family is comprised of DJSI World, DJSI Asia Pacific, and DJSI Korea. In DJSI World, the top 2,500 global companies are evaluated in terms of sustainability. Among them, only 317 companies, or 12 percent, are included in the 2015 DJSI World. Out of the 317 companies, 21 were Korean. Samsung SDI successfully re-entered the index, while Daelim was dropped this year. DJSI Asia Pacific evaluates the top 600 companies in Asia, and DJSI Korea tests 200 companies.
For DJSI Asia Pacific, out of 608 companies, 145, or 23.8 percent, were listed this year. Among 145 companies, 41 are Korean. BNK Finance Holdings, CJ Cheil Jedang, and Hyundai Glovis have succeeded in newly re-entering the index, whereas Daelim, Kia, and Hanwha Chemical Corp have been dropped.
DJSI Korea is the world's first country-specific index. Out of 202 tested Korean companies, 52 companies (25.7 percent) are listed. DJSI Korea has been managed by the Korea Productivity Center (KPC) since 2009, along with S&P Dow Jones Indices and RobecoSam.
Samsung SDI, CJ Cheil Jedang, LG Hausys, GS E&C Corp., Korea Electronic Power Corporation, and Hyundai Glovis have all made successful entries into DJSI Korea, whereas Nongshim, DaumKaKao, LG Corp, KCC, Korea Gas Corporation, Hyundai Marine, and Hyundai Steel have been dropped from the list.
Companies that respond to the DJSI questionnaire receive a company benchmarking scorecard that shows their sustainability performance compared to the industry average and the industry's best-in-class company on a global basis. The evaluation is detailed, with around 200 factors examined in around 30 categories. The categories include governance structure, risk management, innovation, gas emissions, climate change, human resources, and social contributions. The evaluation period is from April to Aug. every year.