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Starbucks, Alcoa Join Nasdaq Sustainability Index; Citi, JPMorgan Dropped

Alcoa, Caterpillar, Diageo, Fluor, Ingersoll-Rand, Reed Elsevier and Starbucks have been added to the Nasdaq OMX CRD Global Sustainability Index, while Advanced Micro Devices, Citigroup, JPMorgan Chase, Eli Lilly, Petrobras, Raytheon and Shire plc have been dropped.

The equity index, which seeks to provide a benchmark of companies taking a leadership role in sustainability performance reporting, is re-evaluated every May and November.

According to Nasdaq, companies in the index are leaders in disclosing their carbon footprint, energy usage, water consumption, hazardous and non-hazardous waste, employee safety, workforce diversity, management composition and community investing. These companies are voluntarily disclosing their current environmental, social and governance risks as well as revenue opportunities, and how these risks and opportunities will affect future performance, Nasdaq says.

The securities must also meet other eligibility criteria which include minimum requirements for market value, average daily share volume, and price.

But in July Nasdaq itself appeared on a “black list” from Corporate Responsibility magazine, which said the exchange was one of 58 Russell 1000 companies demonstrating the poorest levels of transparency and corporate citizenship.

In February a group of institutional investors managing more than $1.6 trillion in assets said companies on the Nasdaq have some of the lowest levels of disclosure of environmental, social and governance risks. The investors urged the world’s 30 biggest stock exchanges, including Nasdaq, to force corporate sustainability reporting.

Last September the Dow Jones Sustainability World Index added 41 companies, including Société Générale and Schneider Electric. It also dropped 23 firms, including Coca-Cola, Hewlett-Packard and natural gas producer Encana.

The Nasdaq Global Sustainability Index’s re-evaluation came on the day that Congress’s supercommittee failed to meet its deadline to cut $1.2 trillion from the deficit, causing stocks to plunge. The Nasdaq fell 1.92 percent to 2,523.14, the AP reported.

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One thought on “Starbucks, Alcoa Join Nasdaq Sustainability Index; Citi, JPMorgan Dropped

  1. Below are the eligibility criteria for the index. I will have to take a closer look to see what criteria these companies no longer meet. To learn more about the index methodology visit, https://indexes.nasdaqomx.com/docs/methodology_QCRD.pdf

    Eligibility Criteria (*)
    To be eligible for inclusion in the Index, according to SmartviewTM, CRD Analytics’ propriety investment platform that screens and ranks companies based on over 150 quantitative financial, environmental and social performance indicators, an issuer of a security must meet the following:
    • produce a publicly available corporate sustainability/responsibility report;
    • disclose compatible sustainability data according to (GRI) G2/G3 guidelines;
    • report at least 20% of total core environmental performance indicators;
    • report at least 20% of the total core social performance indicators; and
    • report at least 70% of the total financial performance indicators.

    In addition, a security must meet the following:
    • must be listed on The NASDAQ Stock Market, the New York Stock Exchange or NYSE Amex;
    • an average minimum market capitalization of $10 billion over the previous six-months;
    • a minimum three-month average daily dollar trading volume of $1 million;
    • only one class of security per issuer is allowed;
    • the issuer of the security may not have entered into a definitive agreement or other
    arrangement which would likely result in the security no longer being Index eligible;
    • the security may not be issued by an issuer currently in bankruptcy proceedings; and
    • the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn.

    * For the purposes of Index eligibility criteria, if the security is a depositary receipt representing a security of a non-U.S. issuer, then references to the “issuer” are references to the issuer of the underlying security.

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