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sustainability > Approach to Sustainability > Recognition > Dow Jones Sustainability Index > EDP remains on the Dow Jones Sustainability Indexes on 2009

EDP remains on the Dow Jones Sustainability Indexes on 2009

EDP was selected to form part of the Dow Jones World and STOXX Sustainability Indices for the second year running, making it one of the 13 best electricity companies in the world and one of the 7 best in Europe.

dow jones 2009 2010

EDP was selected to form part of the Dow Jones World and STOXX Sustainability Indices for the second year running, making it one of the 13 best electricity companies in the world and one of the 7 best in Europe. These indices are subject to annual review. The evaluation process, which identifies and classifies best practices in the area of sustainable development, took place from June to August 2009, and the list of companies selected for the various indices was announced on 3 September. 

EDP improved its points score substantially, with an increase of around 9% in relation to 2008, closing the gap on the new world leader in the sector to only 2 percentage points. EDP achieved 100% in 6 of the 21 criteria under evaluation: Risk Management, Price Risk Control, Score Card Systems, Stakeholder Involvement, Human Capital Development and Environmental Reporting. EDP was also considered the best company for Biodiversity (98%) and Electricity Generation (92%). The best practices are evaluated under 21 criteria, divided into the economic, environmental and social domains, and use both information supplied by the applicant and information that is publicly available.

The list of companies included in the indices is selected from a total of around 2,500 (including, this year, 6 Portuguese companies), from 51 countries and 57 sectors of activity. Around 600 companies from 17 countries and 49 sectors of activity applied to be listed on the Dow Jones STOXX Sustainability Index. EDP's continued inclusion as a member of these indices provides fundamental recognition of the improvements to its sustainable development practices and their growing incorporation into the Group's corporate culture.

Dow jones 2009-2010
 

How important is this index for EDP?

A company listed on this Index has many advantages, both tangible and intangible. Not only does it gain public recognition of its leadership in strategic economic, environmental and social areas but there is the important recognition by investors, customers and even lawmakers. As far as EDP is concerned, its efforts to gain admission to the Dow Jones Index have enabled it to delineate clear and precise goals in relation to sustainable activity. The constant assessment of the Company and the updating of the criteria have created an undeniable rigour within the Group, in all its spheres of operation. The Company's practices were assessed for admission to the Index and they are now concrete goals of EDP. They involve the following areas:

> Creation of value (creation of value for shareholders; increased productivity and efficiency; commitment to customer orientation, etc...)

> Efficient use of resources

> Protecting the environment

> Integrity

> Dialogue with stakeholders (open and transparent relations with customers, investors, suppliers, employees; credible reporting of company performance in all areas)

> Management of human capital (implementing systems to ensure the health, safety and well-being of employees, encouraging skills development, rejecting abusive and discriminatory practice

> Promotion of access to electricity

> Support for social development

What is the Dow Jones Sustainability Index?

The Dow Jones Sustainability Index was launched in 1999. It was the first stock exchange indicator of the financial performance of leading sustainability-motivated companies worldwide. The companies listed on this index, which is linked to the New York stock exchange, are classed as the best able to create value for shareholders in the long-term. They do so by managing the risks associated with economic, environmental and social factors. The importance investors bestow on this index is due to the growing concern of companies and economic groups in a sustainable world. Their financial performance is thus intrinsically bound up with meeting sustainability requirements that affect every area of corporate life and involve economic, social and environmental factors. Dow Jones & Company has so far established three sustainability indexes:

> Dow Jones Sustainability World Index ? This index covers the top 10% of the world's leading companies in each economic sector.
Dow Jones STOXX Sustainability Index and Dow Jones EURO STOXX Sustainability Index ? As a benchmark for European sustainable investments, the Dow Jones STOXX Sustainability Index (DJSI STOXX) covers the leading companies in terms of sustainability in the Eurozone. The top 20% of companies are included in this index

> Dow Jones Sustainability North America Index and Dow Jones Sustainability United States Index - The Dow Jones Sustainability North America Index (DJSI North America) covers the top 20% of the 600 largest North American companies in the Dow Jones World Index. The Dow Jones Sustainability United States Index (DJSI United States) is a subset of DJSI North America, and it only considers the United States.

What are the assessment criteria for companies?

The composition of the Dow Jones Sustainability Index is arrived at on the basis of an assessment by SAM (Sustainable Asset Management). This firm ranks companies (which apply voluntarily) according to their compliance with sustainability criteria in three basic areas: economic, social and environmental. The weighting of each area is adjusted annually according to current economic circumstances. Dow Jones & Company then compiles the index based on the SAM ranking of the companies.SAM uses the following sources of information:

> A rigorous questionnaire, which is completed by the companies and is specific to each sector;

> Documents such as sustainability, health and safety, social. and financial reports, and other corporate documents;

> Media and stakeholders? reports and other information in the public domain;

> Personal contact with the companies.
 The assessment criteria are many and require companies to pay strict and careful attention to their fulfilment. For more information about these criteria refer to the SAM site.