Dow Jones Sustainability Index and Newsweek Green Rankings
You’ve probably heard of Newsweek Green Rankings, or NWGR, and the Dow Jones Sustainability Index, or DJSI. They are two wildly popular systems for providing information on the sustainability efforts of large companies, bringing sustainability into the public eye and encouraging competition. Aside from that, the two systems differ quite a bit.
Newsweek Green Rankings
Newsweek Green Rankings started in 2009 as a way to bring attention to large companies’ sustainability efforts. Their methodology changes frequently, so it is important to consider the changes when reading rankings from one year to the next. At this time, Newsweek compiles research from Corporate Knights Capital and HIP (Human Impact + Profit) Investor Inc.to rank 500 companies. They focus on, to use their words, “the world’s largest publicly traded companies,” ranking them by eight criteria determining the success of each company’s sustainability efforts.
Newsweek Green Rankings Criteria:
- Energy productivity
- Greenhouse gas (GHG) management productivity
- Water productivity
- Waste productivity
- Percent of revenue made from green initiatives
- A link between green initiatives and executive pay
- Presence of a sustainability board committee
- Third-party audited environmental metrics
Newsweek calculates productivity based on the ratio of revenue to issue addressed, i.e. revenue/energy consumption. The first five criteria determine 60% of a company’s rank.
Dow Jones Sustainability Indices
The Dow Jones Sustainability Indices were created in 1999, making them the first global sustainability benchmark. S&P Dow Jones Indices and RobecoSAM work together to gather only the best sustainability leaders to highlight. They compare companies within their industries and regions on long-term economic, environmental, and social factors. By breaking their indices down and selecting only the top 20% of companies, they have inspired powerful competition.
Dow Jones Sustainability Indices criteria and metrics vary by industry, but generally include such factors as:
- Climate change strategies
- Energy consumption
- Knowledge management
- Human resources development
- Relationships with stakeholders
- Corporate governance
- Codes of conduct
- Risk and crisis management strategies
- Evidence of anti-corruption policies
- Social reporting policies
They gather information from RobecoSAM’s Corporate Sustainability Assessment, each company’s documentation, media coverage, stakeholder commentaries, and personal contact with the companies to determine who to include.
Both of these sustainability rankings give attractive information on your company to potential customers and stakeholders. Newsweek Green Rankings is a highly visible list that provides a company with massive positive publicity, though it is not considered as reliable of an honor or useful benchmark as DJSI. Obviously, since more companies are included in the Newsweek Green Rankings, you could get your foot in the sustainability rankings door.