15 US utilities are on the Target Rock High Sustainability Index, which launched today.
Many pension funds and older investors looking for stable returns through dividends, will be interested in this index, which finds the highest scorers on sustainability outpace their peers in stock market returns.
Target Rock Advisors, LLC released the results of its first U.S. utility sustainability rankings, identifying 15 "high performers."
The top 5 utilities for excellence in sustainability performance are:
- Sempra Energy (NYSE: SRE)
- Xcel Energy Inc. (NYSE: XEL)
- PG&E Corporation (NYSE: PCG)
- Edison International (NYSE: EIX)
- Avista Corporation (NYSE: AVA)
Target’s scoring system, which relies primarily on actual operating results, systematically addresses the three classic pillars of sustainability: environment, economy and society – the "triple bottom line".
As a group, the utilities in the index out-performed both utility-specific sector indexes and broader market indexes, such as the Dow Jones Industrial Average and the S&P 500, for the 10 year period ending December 31, 2011.
"There is a growing focus on sustainability, both globally and within the U.S. However, the metrics for effectively assessing sustainable performance by utilities has been lacking," says Richard Rudden, chief executive of Target Rock.
Assets under management by socially responsible investment funds are expected to reach $9 trillion in the U.S. by 2015. Investor-owned public utilities are an under-appreciated asset class and an opportunity for investors with an appetite for sustainable investments without sacrificing long term return potential, says Target.
Using Target Rock’s benchmarks and indexes, utilities can identify areas for performance improvement and best practices that may lead to improved brand image, attract coverage by industry analysts and pique investor interest.
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