The S&P/ASX 200 ESG Index represents S&P DJI’s first core ESG offering for the Australian market. 

S&P/ASX 200 ESG is Bringing Transparency to Sustainability

The S&P/ASX 200 ESG Index represents S&P DJI’s first broad-market sustainability offering for the Australian market. Using a three-step approach, the index seeks to maintain overall industry group weights that are similar to the S&P ASX/200 while incorporating sustainability values.

  • Step 1: Exclude companies involved in thermal coal, tobacco and controversial weapons, as well as companies with low UNGC Scores, in addition to the bottom 25% of companies within global GICS industry groups, as ranked by S&P DJI ESG Scores.

  • Step 2: Rank companies by S&P DJI ESG Score. Select top-ranked constituents, targeting 75% of the market cap in each S&P/ASX 200 GICS industry group, with the goal of achieving broadly sector-neutral exposure relative to the S&P/ASX 200.

  • Step 3: Weight companies by float-adjusted market capitalization.

S&P DJI ESG Scores are unique in that they focus on the most financially material and relevant ESG signals within specific industries. The scores leverage industry-acclaimed assessment data from S&P Global.

  • Environmental

    Environmental

    9%

    higher exposure to companies that have publicly reported quantitative environmental indicators covering the most recent fiscal year and have received external assurance in relation to their environmental reporting.

    7%

    higher exposure to companies that integrate climate-related issues into overall risk management; identify climate change-related risks and opportunities; report on emission reduction activities; provide lowcarbon products and/or enable a third party to avoid greenhouse gas (GHG) emissions (avoided emissions); have targets and initiatives in place to reduce the emissions; and provide incentives for achieving targets in relation to management of climate change issues.

    7%

    higher exposure to companies that have publicly available data related to Scope 1 and 2 direct and indirect GHG emissions, water consumption and disposal, and energy usage and consumption.

  • Social

    Social

    10%

    higher exposure to companies that publicly report on quantitative social indicators covering the most recent fiscal year.

    8%

    higher exposure to companies that monitor and disclose female representation across their organization, as well as a breakdown of workforce based on other minority group(s), e.g. age, nationality, disability, etc., as well as results of gender pay gap or equal pay assessment.

    7%

    higher exposure to companies that have a group-wide strategy that provides guidance to corporate citizenship/philanthropic activities and have disclosed their corporate citizenship/philanthropic contributions.

  • Governance and Economics

    Governance and Economics

    7%

    higher exposure to companies that have a publicly available independence statement for their board, including its structure, board effectiveness, diversity policy, gender diversity, industry experience and CEO-to-employee pay ratio data, as well as management ownership requirement data.

    7%

    higher exposure to companies that have conducted a materiality analysis to identify the most important material issues (environmental, social or governance) for their performance, including business strategies, initiatives or products that address these issues and long-term targets or metrics to measure their progress on these issues in a systematic way.

    7%

    higher exposure to companies that promote and enhance an effective risk culture throughout their organizations, have identified long-term emerging risks that have a significant impact on the business in the future, have taken mitigating actions in light of these risks and that perform sensitivity analyses and stress testing at the group level, including risks related to climate change and water availability and/or quality.

Source: S&P Global and S&P Dow Jones Indices LLC. Data as of Oct. 31, 2022. Increased index exposure to each ESG theme in the metrics above are calculated using the question-level data in S&P Global’s Corporate Sustainability Assessments (2021 methodology year), as the percentage difference between the performance of the S&P/ASX 200 ESG Index and the S&P/ASX 200 constituents across these metrics, on a weighted average basis. Chart is provided for illustrative purposes.

Additional Resources

  • Defining the Sustainable Core in Australia

    Learn more
  • Bringing ESG Considerations to Australian Strategies

    Read on
  • ESG Goes Mainstream in Australia

    Learn more
  • Sustainability Index Dashboard

    Read on

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