Only the Top 15% of Companies per Sector are Included in the Yearbook
The assessments measure sustainability performance both on an industry specific basis and more broadly across industries. The process identifies companies that manage the risks and seize opportunities deriving from economic, environmental and social challenges and as a result, represent potentially attractive investments. Only the top 15% of the companies per industry sector in the initial universe of 2,500 companies are included in the Sustainability Yearbook. In each sector, the SAM Sector Leader is the company with the best score of all companies assessed in this sector. For full information about the Sustainability Yearbook and the SAM Sector Leaders please visit:
http://www.sam-group.com/htmle/yearbook.
Best-in-Class Research Approach
SAM’s unique research team uses a best-in-class approach, looking at sustainability leaders from each industry. The Corporate Sustainability Assessment consists of more than 100 questions that cover economic, environmental and social dimensions, as well as additional business issues that are critical to a company’s long-term success and financial performance. Broad issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labor practices are assessed; and more intangible factors such as human capital development and knowledge management, which in SAM’s view are under-researched in traditional financial analysis, are also considered key to the findings.
Industry Specific Criteria Key to Understanding Fair Value
General questions cite corporate governance policies, labor practices, talent attraction and retention, and the quality of reporting on environmental and social issues. Industry specific criteria focuses on companies’ awareness of material risk related to sustainability issues relevant to their industry and their actions to mitigate it. The weight of the industry specific criteria has risen from 30% eleven years ago to just below 60% of the total score in 2009.
Sander van Eijkern, CEO at SAM: “This increased emphasis on sector criteria reflects our conviction that sector-relevant sustainability opportunities and risks play a key role in determining the long-term success of companies and resulting shareholder value.”
Research Makes the Case for Alpha from Sustainability
SAM has researched the connection between corporate sustainability leadership and stock performance and found that the top 20% of the most sustainable companies in each industry sector perform better in comparison to the whole universe. Conversely, the share price of the bottom 20% of companies with the poorest sustainability ratings in each sector underperformed the comparison group. The study “Alpha from Sustainability” illustrates the details of this research.
To obtain a copy of the “Sustainability Yearbook 2010”, e-mail: yearbook@sam-group.com
To obtain a copy of the study “Alpha from Sustainability”, e-mail: com@sam-group.com