What is a sustainability index?

A sustainability index is an instrument used to measure the sustainability of a business across environmental and social factors. It provides non-financial data that can tell investors and stakeholders how a company is managed in a day-to-day setting and the importance that they place on environmental stewardship and social responsibility. There are dozens of different indexes that businesses can disclose to, each providing their own parameters and levels of credibility amongst the public. The Dow Jones Sustainability Index and FTSE4Good are the most popular in Europe, whilst the MSCI KLD 400 Social Index has a large representation in the US. Sustainability indexes are becoming increasingly important, not only as a measure of risk for investors, but also as a measure of environmental impact. In the face of aggravating climate change, it is paramount that businesses place sustainability at the forefront of their management. Being able to benchmark your company against others as well as being subject to pressures from the public is also a valuable driver of sustainability in business.

What is a sustainability index used for?

Sustainability indexes are primarily used by investors who are interested in introducing sustainable investments to their portfolios. The rise in this interest is in part due to the fact that a business’ sustainability performance is a strong indicator of future performance. A study by HEC Paris titled “Do Investors Actually Value Sustainability Indices?” analysed the impact on companies that are listed on the Dow Jones Sustainability Index. Their findings showed that the listed businesses had a higher percentage of shares held by long-term investors, as well as higher visibility amongst financial analysts.

How do sustainability indexes work?

Each sustainability index works slightly differently, all having a unique assessment criteria and methodology. The general procedure, however, involves a yearly disclosure cycle. This begins with an invitation for companies to participate in the disclosure process, which is often completed through a questionnaire. Participating businesses will have several weeks to several months to complete the questionnaire – depending on the sustainability index – and their answers will be analysed and scored according to each index’s methodology. Once all companies have been given a score, the results are made public and the cycle will begin again for the following year.

What are the benefits of having a sustainability index?

The benefits of having a sustainable index range from financial to non-financial, and benefit businesses, investors, and the public alike. Businesses: Sustainability indexes are useful tools in benchmarking your businesses’ non-financial performance. Measuring your impact is the first step in improving it, and disclosing to a sustainability index allows your business to track progress and make credible plans for improvement. Investors: Sustainability indexes provide non-financial information on companies that give indications of future financial performance. This data is incredibly useful to investors who are looking for long-term, sustainable portfolios. Public: Sustainability indexes make business sustainability data publicly available. With sustainability being of increasing importance to consumers, this helps members of the public to easily decide where they should spend their money, ultimately driving the market in a more sustainable direction.

All Articles

Find out the winners of this year’s Top of the Props

PropTech, IoT, ESG

May 10, 2023

Emily Vernon

When working on our recently published magazine – The Measure – we decided to launch our first ever awards.

Aptly called Top of the Props, we wanted to find the very best companies, projects and individuals who are leading the way in the PropTech industry.

Our judges had a difficult time choosing between lots of really great applications, but they finally came to a unanimous verdict for each of our eight categories.

A big well done to all of the very deserving winners – find out more about the great work they’re doing below!

1. The no bullshit smart building project – sponsored by AirThings

Winner: Cadworks, Glasgow

It’s hard to cut through the noise these days, but Cadworks in Glasgow has gone above and beyond. With a mission to make working easier and more enjoyable, Cadworks features modern essentials like a cycle-in ramp, activity-based spaces and a focus on community.

2. The smartest of the smart buildings projects – sponsored by Equiem

Winner: WaSTeLeSS Project, Switzerland

When it comes to water conservation, The WaSTeLeSS project in Switzerland is smarter than smart. By monitoring and predicting hot water demand with cutting-edge technology, the new water management platform will increase transparency and reduce CO2 emissions.

Commendation: Sharry, Czech Republic

3. Collaboration of the year

Winner: Equiem and Canary Wharf Group

Canary Wharf Group has teamed up with Equiem to bring everything London's central business district has to offer into a single online platform. By improving the experience of residents, office occupiers, retailers, restaurateurs, and visitors alike, this collaboration is certainly making Canary Wharf a destination in its own right.

4. Best retrofit – sponsored by VergeSense

Winner: GMS Global Media Services GmbH (Allianz Real Estate Sky Office)

We’re big fans here of the old adage that the most sustainable building is one that already exists, and this is definitely the case with the upgrade to Allianz Real Estate's Sky Office in Düsseldorf. This prominent office building, housing many renowned businesses, is now a data-driven space that is fit for the future.

5. Unsung hero

Winner: Peter Brooks (Accenture)

This category is all about celebrating the person who’s always trucking away in the background making sure everything gets done, and who better to call out than Peter Brooks. For the past 12 months, he has been the man on the ground, getting his hands dirty every single day to move Accenture’s smart building deployment forward.

Commendation: Jack Lake and Lyndsay Close (amBX) – joint

6. Tech for good pioneers

Winner: amBX

We love seeing tech being used to improve the world around us, and amBX’s lighting platform, SmartCore, does just that. Based on circular economy principles, this innovative system future-proofs existing infrastructure and brings data together from disparate systems to make buildings more sustainable.

Commendation: Ailuna

7. Tech star 2022

Winner: Ganga Bisht (measurable.energy)

measurable.energy is on a mission to eliminate all small power wasted energy, and this involves collecting and processing huge amounts of data. We want to celebrate Ganga Bisht – the company’s data whizz – who has done some incredible work behind the scenes on all of the key algorithms and machine learning that make the product so great.

8. Power product 2022

Winner: Smart Server IoT (EnOcean)

SmartServer IoT represents our favorite kind of tech – flexible, extensible, and easy to use. With a unique combination of an open standards-based approach, along with end-to-end integration support, SmartServer IoT enables efficient development and integration, transparent licensing, and straightforward support for system extensions.

Want to read the full magazine? Of course you do – download your copy here

Find out the winners of this year’s Top of the Props

1. The no bullshit smart building project – sponsored by AirThings

2. The smartest of the smart buildings projects – sponsored by Equiem

3. Collaboration of the year

4. Best retrofit – sponsored by VergeSense

5. Unsung hero

6. Tech for good pioneers

7. Tech star 2022

8. Power product 2022

More Like This

What is COP26 and why does it matter?

Metrikus and VergeSense – making offices smart and safer

Electric vehicles and the future of cities

Book a demo