Global Sustainability Leaders Index

The Index is composed of the top 100 representative group of companies, selected on the basis of their ESG performance.

Introduction

The Global Sustainability Leaders Index (GSLI) stems from the belief that companies that manage Environmental, Social and Governance (ESG) issues well can also yield superior risk-adjusted returns. The index is composed of 100 Global Compact signatories selected on the basis of Sustainalytics’ proprietary ESG Rating, which identifies the top sustainability performers within their respective sectors and regions. To be eligible for the index, companies must have a consistent base-line profitability and meet a set of stringent minimum sustainability criteria. For example, companies cannot be involved in tobacco or controversies that will significantly impact society or the environment and they have to comply with the Global Compact’s 10 Principles relating to human rights, labor, the environment and anti-corruption.

Exclusive product partner: UBS
Administered & Calculated by Solactive

Performance

How do we Select the Sustainability Leaders?

The Sustainability Leaders are selected based on Sustainalytics’ ESG Rating. After the below average performers are removed, the top 100 companies with the highest ESG Rating are selected so the sector weights for each region in the index matches the global benchmark. Below is a high level overview of the ESG factors we consider:

Environment

Environmental issues can include a company’s policies and programs to manage natural resources and prevent or minimize pollution and emissions. Managing these issues well can improve a company’s (energy) efficiency as well as minimizing or avoiding environmental liabilities and reducing regulatory and reputational risks.

Social

Our social indicators looks at the way the company treats people across its value chain – from its suppliers to its employees, customers and the communities where it operates. Managing these relationships well is crucial for the company’s reputation, brand and licence to operate.

Governance

When we assess a company’s corporate governance structures we look at the checks and balances put in place to safeguard shareholder and stakeholder rights. Some of the issues we look at include executive compensation, board accountability and business ethics (bribery and corruption).

* A controversy that will have a significant impact on society and the environment or which poses a material risk to the company
† See Eligibility & Selection

Composition

(as of 31 August 2018)

Regional Weight in Percentages

Sector Weight in Percentages

Top 10 Constituents

Company Sector
Intel ICT
Citigroup Financials
General Electric Industrials
Cisco ICT
Novo Nordisk Healthcare
Inditex Consumer
Bristol-Myers Squibb Healthcare
Deutsche Telekom Telecom.
Westpac Banking Financials
Starbucks Consumer

Eligibility and Selection

Index Calculation

The Index is calculated in USD and represents returns net of dividend tax.

Eligibility Criteria

To be eligible, companies must be:

  • In Sustainalytics’s research universe (>8,400 listed companies)
  • A Global Compact signatory
  • Compliant with the Global Compact’s 10 Principles on human rights, labor the environment and anti-corruption
  • Not involved in the manufacturing or distribution of tobacco
  • Not involved in a severe controversy, which will have a significant impact on the environment/society or which poses a material risk for the company

Financial Criteria

New additions require a positive EBIT for the past three years. Current constituents are removed if they’ve had a negative EBIT for two consecutive years.

Selection Criteria

Below average stocks that are in the bottom 50th percentile of their respective sector and region are removed. From the remaining stock, the top 100 companies with the highest ESG rating are selected so the sector weights for each region in the index matches the global benchmark.

Liquidity Criteria

The free-float market cap must be larger than $500mn and the average daily trading over the past three months above $10mn.

Rebalancing

The Index allocation is reviewed annually and re-weighted quarterly on the last business day of December, March and June to re-normalize the weight to its original value (as calculated in September). This ensure that the stock moves do not end up having large weights on any one stock.

Disclaimer

Copyright ©2018 Sustainalytics. All rights reserved

Sustainalytics controls the rights to and is the owner of The Global Sustainability Leaders Index (the “Index”) and retains all proprietary rights therein. Sustainalytics and all of their respective affiliates and suppliers have not participated in the creation or development of this investment product and the United Nations, the Foundation for the Global Compact or any of their respective affiliates do not endorse this or any other investment product.

Sustainalytics does not sponsor, endorse or otherwise promote any security, other financial product or transaction (each a “Product”) referencing the Global Sustainability Leaders Index. Sustainalytics makes no representation or warranty, express or implied, to the owners of any Product or any member of the public regarding the advisability of investing in securities or financial products generally or in the Product particularly or the ability of the Index to track the investment opportunities in the commodity futures market or otherwise achieve their objective. Sustainalytics has no obligation to take the needs of the owners of any Product or any other person into consideration in determining, composing or calculating the Index. Sustainalytics is not responsible for, has not participated and will not participate in the determination of the timing of, prices of, or quantities of any Product to be issued or in the determination or calculation of the equation by which the Product is to be converted into cash. Sustainalytics has no obligation or liability in connection with the administration, marketing or trading of any Product.

THE INDEX IS DERIVED FROM SOURCES THAT ARE CONSIDERED RELIABLE, BUT SUSTAINALYTICS, ALL OF THEIR RESPECTIVE AFFILIATES AND SUPPLIERS DO NOT GUARANTEE THE VERACITY, CURRENCY, COMPLETENESS OR ACCURACY OF THE INDEX OR OTHER INFORMATION FURNISHED IN CONNECTION WITH THE INDEX. NO REPRESENTATION, WARRANTY OR CONDITION, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, AS TO CONDITION, SATISFACTORY QUALITY, PERFORMANCE, OR FITNESS FOR PURPOSE ARE GIVEN OR DUTY OR LIABILITY ASSUMED BY SUSTAINALYTICS, ALL OF THEIR RESPECTIVE AFFILIATES AND SUPPLIERS, IN RESPECT OF THE INDEX OR ANY DATA INCLUDED THEREIN, OMISSIONS THEREFROM OR THE USE OF THE INDEX IN CONNECTION WITH ANY PRODUCT, AND ALL THOSE REPRESENTATIONS, WARRANTIES AND CONDITIONS ARE EXCLUDED SAVE TO THE EXTENT THAT SUCH EXCLUSION IS PROHIBITED BY LAW.

To the fullest extent permitted by law, Sustainalytics shall have no liability or responsibility to any person or entity for any loss, damages, costs, charges, expenses or other liabilities, including without limitation liability for any special, punitive, indirect or consequential damages (including, without limitation, lost profits, lost time and goodwill), even if notified of the possibility of such damages, whether arising in tort, contract, strict liability or otherwise, in connection with the use of the Index or in connection with any Product.

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