BLOG: Why Participate in the Dow Jones Sustainability Index?

There is always a competitive edge to sustainability ratings and rankings and the Dow Jones Sustainability Index (DJSI) is no different, writes André Veneman, Corporate Director for Sustainability & HSE, AkzoNobel. However in the race to earn the highest scores and become an industry leader it is easy to lose track of the real value and purpose of the index.

While the Dow Jones Sustainability Index (DJSI) provides scores and enables companies to benchmark their performance against industry peers, the actual process of responding can provide enormous business benefits. For AkzoNobel, this globally respected ranking system is a highly effective management tool to manage sustainability and business performance.

Let me explain further. The DJSI covers the issues that matter to companies looking at economic, social and environmental topics that drive long-term financial performance. It covers key environmental issues such as how companies reduce carbon and become more eco-efficient and social concerns such as how they invest in local communities. But crucially it also looks at core business areas for example supply change and customer relationship management.

RobecoSAM, the organization that develops the DJSI questionnaire, focusses on topics that are relevant to a particular industry. In fact over 50 percent of the criteria are focused on industry-specific risks and opportunities that contribute to a company’s long-term success. This gives companies a guide for where to improve their business – all tailored to their particular industry.

For AkzoNobel this means we have a roadmap for where to drive improvements helping us to advance our business in many ways such as in the areas of innovation, resource efficiency, product safety, customer focus and commercial excellence.

The actual process of completing the DJSI submission is also positive. It promotes internal collaboration helping to start conversations across different departments and functions that might not otherwise have happened. This involves leaders and experts coming together from across the business to exchange ideas, helping to spark new ideas for sustainable solutions.

All participating companies to the DJSI receive a Company Benchmarking Scorecard. This scorecard covers all criteria assessed and shows the company's sustainability performance compared to the industry average and the industry's best-in-class company on a global basis.

It is important to take action, because if companies don’t make progress and adopt a continuous improvement mindset, they’ll drop down the list or fall off it altogether. For example, in 2014, talent attraction and retention and operational eco-efficiency were identified as areas where AkzoNobel could do better. So since last September, we’ve been working hard to improve in these areas.

In fact, we attach so much importance to a strong performance on the DJSI that our ranking is tied to remuneration packages for our top 600 executives. That’s a clear indication of how sustainability is driving our business, and how our business is driving sustainability.
Responding to the DJSI is no simple task. The process involves considerable time and effort from many people across a business.

However it is well worth it. At AkzoNobel we have a clear vision for what we want to achieve. We are committed to delivering more value from fewer resources as part of our Planet Possible sustainability strategy and our DJSI performance is a barometer for measuring the level of our success.