Dow jones sustainability index Chile relationship and income, results and profitability on equity of companies

Abstract

In developing countries companies are presenting their sustainability reports, what has led to an interest in implementing an index that can measure the sustainable development of companies as an additional and complementary index to those existing in the market.

The purpose of this study is to relate the Dow Jones Sustainability Index Chile (DJSIC) with the income, results and ROE generated by the companies that comprise it, considering that sustainability is being considered as a fundamental part in the development of companies, the objective is associate to the DJSIC with the income and companies results of that compose it, so that the income or results are an indicative parameter of the index.

Methodologically, the 26 Chilean companies are composed of Dow Jones Sustainability Index Chile were considered, the degree of correlation of the variables, the normality and correlation test was carried out, in addition the IGPA was added, which is a general index and to see the relationship that exists with the companies based on the key variables that were initially proposed (income, results and ROE), the study included the analysis for three years considering the final results of the companies and that the index began operating in Chile in 2015.

The results indicate that there is a correlation between the income and the DJSI Chile (70% of the companies), relation to the results there is a correlation of 62% of the companies under study, and a 46% of correlation with ROE of companies, in posterior studies are possible to correlation with a longitude of greater time as that index have an important correlation with the income, business results and/or ROE.