“RobecoSAM collaborates with Bloomberg”, was the headline to a seemingly innocuous email. It arrived last Monday in the inboxes of any company invited to participate in the RobecoSAM Corporate Sustainability Assessment (CSA). It revealed that, from September, Dow Jones Sustainability Index (DJSI) data will arrive on hundreds of thousands Bloomberg screens. It could just herald a “big bang” for corporate sustainability.
The term “Big Bang” was used to describe Margaret Thatcher’s dramatic deregulation of financial markets in the City of London. The reform saw activity on the London Stock Exchange take off in the 1980s. This September, a few weeks after DJSI results are released, Bloomberg’s 327,000 subscribers will see their terminals light up with an avalanche of new data points on Environmental, Social and Governance (ESG) issues. Could this start a similar take-off of interest amongst investors?
Transparency Alert!
Companies are used to getting their own benchmarked score for the RobecoSAM CSA. The top performers in each category are clear, but anonymous. Only the names and aggregate scores of the leading companies in each industry have ever been disclosed.
But now, anyone with access to a Bloomberg terminal will be able to view the percentile ranking for 20-odd criteria – ranging from corporate governance and supply chain management to eco-efficiency and human capital development – of over 2,000 individual companies. If YOU have access to a terminal, you can look up all your competitors, following the annual rebalancing of the DJSI in September.
And don’t forget – even if you don’t respond to the survey, you are still going be benchmarked on the basis of public information. You just probably won’t do very well.
Big Questions at Corporate HQ
One of the consequences of this all this is going to be a lot more questions – from investors and within companies. Why is our Code of Conduct score lagging our peers? Is your governance really that risky?
RobecoSAM have said that their own surveys show clear support from companies for getting the data in front of more investors. Promoting awareness of ESG issues can only be a good thing.
RobecoSAM also state that one of the benefits will be that “Investor Relations teams can now answer questions about the company’s ‘DJSI Score’ when speaking to analysts and investors”. For some IR teams, it may come as quite a shock if mainstream investors start asking about DJSI scores.
If it was once a narrow range of socially-responsible investors (SRI) that were interested in DJSI, your performance is now going to be accessible to many more people. If you work in the corporate sustainability/responsibility function, that could mean a lot more interest in the issues – and pressure to perform in the assessment. On the flipside, it could make the job of getting internal buy-in and support from colleagues easier.
If you are one of the companies that hasn’t yet responded to the CSA request this year – there is still time. Given the ‘big bang’ that could be on the horizon, it might just be the right time to step up a gear.
Richard Hardyment is a Director at Corporate Citizenship.