Jantzi Social Index

In January 2000, Jantzi Research launched the Jantzi Social Index® with partners Dow Jones Indexes and Montreal-based State Street Global Advisors (SSgA). The JSI, a socially screened, market capitalization-weighted common stock index modeled on the S&P/TSX 60 consists of 60 Canadian companies that pass a set of broadly based environmental, social, and governance rating criteria. The JSI has begun to generate the first definitive data on the effects of social screening on financial performance in Canada.

In creating the JSI, Jantzi Research set out to create a benchmark against which institutional investors could measure the performance of socially screened portfolios. In addition, by tracking the JSI over time, Jantzi Research hoped to answer the question: How does the application of social criteria affect investment performance?

The terms "index" and "benchmark" are often used interchangeably, but they are not the same. An index is a mechanism for showing how a market has changed based on the prices of underlying securities. A benchmark is a tool for evaluating the success of a process. In order for an index to work as an investment benchmark, it must be:

Practical. An index should provide an unbiased model of the market segment it is intended to represent, and thereby provide a basis that managers may strive to outperform through good investment management.
Investable. The securities that make up the index should be available for investment.
Representative. An index should be as representative as possible of the underlying market, both in terms of market capitalization and industry coverage.
Complete. An index of a particular market should include as many securities as possible.
Widely recognized. Sometimes broad recognition of an index is better than perfection in the index, because it facilitates gaining acceptance, comparisons and, above all, the process of gathering of information.
Given that Jantzi Research's goal was to create the JSI as a usable benchmark, the companies therein represent a basket of stocks from which social investors might choose to invest based on a certain set of screening criteria. The JSI is not meant to reflect the 60 best companies in Canada nor does it presume to represent the only 60 companies that meet social and environmental criteria.