The SRI Index comprises listed companies which meet criteria related to their environmental, social and governance (ESG) policies, management practices and reporting. The first of its kind in an emerging market, and a leader worldwide, the indexs intention is two-fold: to encourage companies to operate responsibly and transparently and to prompt institutions to consider ESG factors when evaluating potential investments.
Since its inception in 2004, the SRI Index has become a significant benchmark for broad-based environmental, social and governance practice amongst local listed companies.
The key objectives of the Index are to:
Identify those companies listed on the JSE that integrate the principles of the triple bottom line and good governance into their business activities;
Provide a tool for a broad holistic assessment of company policies and practices against globally aligned and locally relevant corporate responsibility standards;
Serve as a facilitation vehicle for responsible investment for investors looking for non-financial risk variables to include in investment decisions as such risks do carry the potential to have significant financial impacts;
Contribute to the development of responsible business in South Africa and beyond.
To qualify for inclusion, a company must meet the required number of indicators as set out in each individual area of measurement. The indicators are structured along four areas of measurement: Environment, Society, Governance and related sustainability concerns, and Climate Change.
In some instances, the indicators are split between core and desirable. Core indicators cover elements that companies should have as a minimum, while desirable indicators are aspirational or advanced, and are intended to guide companies to identify all relevant issues they need to address.
This year 109 companies were assessed and of these, 74 qualified for the SRI Index.
Altechs qualification into the Index demonstrates the groups commitment to successfully integrating environmental, economic and social sustainability practices across the triple bottom line.
Of added value to Altechs qualification is that corporate governance is an essential foundation for each of the measurement areas. A key challenge to any company is the ability to achieve a balance between performance and compliance, while taking account of stakeholder expectations.