What is the purpose of sustainability indices?

The purpose of sustainability indices is primarily to track company performance against established sustainability criteria. These indices provide a framework for measuring and benchmarking how well companies are doing in terms of their social, environmental, and economic impacts. By using specific metrics and data, sustainability indices allow stakeholders, including investors, consumers, and regulatory bodies, to assess a company's sustainability performance over time.

This tracking helps in identifying areas for improvement, encourages transparency, and supports informed decision-making. It creates a standardized way to evaluate and compare the sustainability efforts of different organizations within an industry, thus promoting best practices and accountability in sustainability reporting.

While raising awareness, setting goals, or increasing profits can be related outcomes or benefits associated with sustainability practices, the core purpose of sustainability indices lies in this performance tracking function.