In a press release today SAM and Dow Jones Indexes announce adjustments to 2010 Dow Jones Sustainability Indexes. A review has resulted in changes in both the DJS World Index as well as the DJS Europe Index.

The news is presented in such  “matter of factly”-way that an average reader may not recognize the impact. However, this is truly a “Brent Spar” to SAM. As a consequence of the changes some companies have been removed from the indices, others have been included again and changes in the number one positions have occurred.

 

In a press release AkzoNobel CEO Hans Wijers has expressed his disappointment at today’s revised 2010 Dow Jones Sustainability Indexes listing, which has seen the company relinquish its first place in the Chemicals supersector due to a technical readjustment. DSM is now the new number one.

Wijers also stated: “the evaluation procedure used by SAM needs to undergo its own systematic review. “We are closely monitoring the measures that SAM is taking and have made it clear to them that this cannot happen again. We have to ensure that we use a reliable and consistent external benchmark to measure our sustainability performance.” 

 

I believe that the issue SAM is facing and the reputational damage it causes is a disappointment for investors, companies and many other stakeholders. It is of crucial importance that fundamental changes are enforced by SAM in order to improve its performance and thus credibility. A necessary first step is to make the process transparent. This black box has to be opened up! Then also a bit more humility won’t harm the recovery process.

 

It remains to be seen whether and when these indices will regain the necessary trust levels. Meanwhile I can only repeat our earlier advice not to use this benchmark as an instrument for determining sustainability bonuses. Not perception but reality should define guide performance.