BMW still topping automotive Dow Jones sustainability index for continued ethical operations



Sustainability has become a significant factor in company operations over the last decade. Virtually all major corporations have implemented a corporate social responsibility program aimed at reducing the eco footprint of products, services and operations. Many companies heavily promote their eco initiatives, but it isn’t always clear whether they have an actual impact.

The Dow Jones Sustainability Indices (DJSI) annual report was created in 1999 to do exactly that. The DJSI is designed to evaluate 3,000+ companies on the Dow Jones Global Total Stock Market Index. Sustainability investment specialists, RobecoSAM, developed the Corporate Sustainability Assessment (CSA) methodology that is used to evaluate each company’s financially relevant sustainability factors. The highly respected methodology has been acknowledged for its accuracy and influence on improving the sustainability performance of corporations throughout the world.

The 2015 Dow Jones Sustainability Index’s New Top Corporations

In total there are 24 industries represented on the 2015 Dow Jones Sustainability Index. Each of the companies that participate will be scored using a standard set of criteria and will receive a RobecoSAM Company Benchmarking Scorecard. This scorecard will indicate how the company compares to the average sustainability performance in their industry. This helps companies better understand how effective their eco initiatives are and where improvements can be made.

Many of the top ranking industry leaders for 2014 were once again recognized in the 2015 report. However, there were new front-runners in eight categories, of which we’ve covered six below; including Automobiles – perhaps the most stunning – where a very unexpected change of events took place when the leader chosen initially had its title revoked, by default granting that title to the 2nd place company – BMW – who just happened to be last year’s leader of automobiles and auto parts.

Automobiles & Components

2014 – 2015 DJSI Leader – Bayerische Motoren Werke AG (BMW) (Germany)

Volkswagen AG originally took the top spot in 2015, but was removed from the Index after the company’s emissions scandal was revealed earlier this year. Now, BMW is at the top of the list again. While it is quite unexpected that Volkswagen was removed from the DJSI – an event that does not occur often – it comes as no surprise that BMW remains atop the Index based on their long history of sustainable preeminence and high ethical standards. BMW has been consistently reducing carbon dioxide emissions for years and is now heavily involved in the hybrid and electric vehicle market. The renowned automotive company’s BMW i3 and i8 offer customers the choice between all-electric or hybrid models. From the BMW Group website, “The BMW i3 provides an excellent example of this: from raw material extraction through vehicle manufacturing to recycling, this car meets measurable sustainability targets. Based on an electricity mix made up of purely renewable energies, its greenhouse gas potential is more than 50% lower than that of conventional automobiles.” BMW is a company focused on sustainability, as evidenced by their 2020 goal of reducing European fleet emissions to half the levels recorded in 1995. Even genuine BMW parts are becoming more sustainable, as evidenced by auto parts catalogs from many online stores like Body parts and interior parts alike for BMW vehicles are being produced using recycled and completely natural bio-polymers and fibers, such as the leather interior on the door panels and seat cushions, and the vinyl dashboards. BMW is also focusing on manufacturing engine parts with carbon fiber rather than traditional metals, as well as implementing lithium-ion car batteries in their electric vehicles to create more sustainable cars overall. Whether looking for performance parts or OEM genuine parts, current BMW owners as well as future owners can rest assured that they are getting high quality BMW parts that increase efficiency, durability, and sustainability.

Capital Goods

2015 DJSI Leader – CNH Industrial NV (United Kingdom)

Longtime DSJI member Siemens was unseated by CNH Industrial NV this year thanks to new production strategies that were put into place. In 2014 CNH Industrial NV cut water withdrawal by 12% and CO2 emissions in production by 15%. They also lowered business travel emissions by an impressive 22%.

Diversified Financials

2015 DJSI Leader – UBS Group AG (Switzerland)

As a financial services firm UBS Group AG understands the impact that sustainability can have on a company’s bottom line. They outperformed last year’s leader ING Group NV by including a societal element. They carefully choose the clients that they support and their own business conduct. The company invested 21% of its assets into improving sustainable investment principles that help their clients develop sustainably-focused investment portfolios.

Food Staples & Retailing

2015 DJSI Leader – METRO AG (Germany)

METRO AG put the lion’s share of its focus on improving the efficiency of its supply chain over the last year. They actually weren’t the top corporation in the social dimension category, however METRO AG did outperform everyone else in the economic dimension and environmental dimension categories. Success in the economic dimension can actually be credited to two things. First, what the industry is calling the “health and wellness movement.” According to DJSI, “The health and wellness movement has developed from a niche trend to a highly-developed profit driver as retailers increase their offering of healthy formulations, organic and specialized food products.” The second factor is perhaps surprisingly attributed to the company’s stakeholders, who are actually holding the company to higher standards when it comes to the efficiency and transparency of supply chains. METRO AG is focused on, “implementing measures primarily focusing on its supply chain, ranging from compliance with human rights, to production, processing, on to transport, warehousing and stores.” METRO AG has certainly earned its place on the DJSI and should stand as an example of sustainability should be synonymous with positive impact.

Real Estate

2015 DJSI Leader – Stockland (Australia)

Stockland is small compared to many other corporations on the DJSI list, but it made its way to the top of the expansive Real Estate industry because of its new Group Strategy for Sustainability initiative. The initiative addresses eco issues across the board including waste reduction at residential developments and assessing their subcontractors, which are both deep-seeded issues in Australia where there has always been a focus on preserving the massively diverse natural environment. Industry drivers such as climate change and energy efficiency are the most important factors in the real estate industry mostly due to the fact that buildings are responsible for about one third of global greenhouse gas emissions.

Telecommunication Services

2015 DJSI Leader – KT Corp (Republic of Korea)

KT Corp was the leader in every assessment category this year for the telecommunications services industry. Their unique Total Operation Center offers commercial clients remote centralized services that increase efficiency. The sustainable success of KT Corp relies largely on the Korean Micro Energy Grid, which according to the Index, “offer commercial sites complete energy management and efficient resource use through remote centralized services such as energy market connection and electricity/heat/gas grid systems.” Such a unique centralized energy grid system has enabled KT Corp to absolutely crush other telecommunications companies worldwide, almost doubling the DJSI industry average in 2015.
From the shear amount of industry leaders focused on eco-efficiency, it is clear that DJSI takes environmental impact seriously. While many industry leaders also vastly improved on factors like social integration and regeneration, supply chain management, and stakeholder engagement, the common denominator across the board seems to be criteria of climate strategy, resource conservation and resource efficiency, and operational eco-efficiency (which indeed drive other criteria categories to improve as well). In sustainability efforts there are no shortcuts, and in order to succeed there a company must strive to demonstrate and enforce high ethical standards. In other words, there’s a positive correlation between sustainability and ethical standards. The VW emissions scandal is a perfect example of how corporate sustainability requires not taking shortcuts. Determination and follow-through have been the keys for BMW’s second year of success in sustainability, as evidenced by the company’s continued efforts in manufacturing more eco-conscious original BMW parts and vehicles.