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.
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Administered & Calculated by Solactive
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:
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.
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.
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).
(as of 31 August 2018)
Regional Weight in Percentages
Sector Weight in Percentages
Top 10 Constituents
Eligibility and Selection
The Index is calculated in USD and represents returns net of dividend tax.
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
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.
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.
The free-float market cap must be larger than $500mn and the average daily trading over the past three months above $10mn.
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.
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