New Sustainable Utility Index Launched
Posted on February 14, 2012 at 10:00 AM EST
Sempra Energy (CA) tops Target Rock High Sustainability Index
HAUPPAUGE, N.Y., Feb. 14, 2012 /PRNewswire/ -- Target Rock Advisors, LLC today released the results of its first proprietary U.S. utility sustainability rankings and related stock indexes. The company has identified 15 "high performance" domestic energy utilities that excel in sustainable operations. The top 5 utilities among the 15 are:
The 15 US companies comprise the Target Rock High Sustainability Index. They were selected based on performance scores and rankings assigned by Target Rock's sustainability scoring system, which relies primarily on actual operating results. It systematically addresses the three classic pillars of sustainability: environment, economy and society, also referred to as the "triple bottom line".
As a group, the stocks of 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 ten year period ending December 31, 2011. The results can be viewed at www.targetrockadvisors.com.
"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," stated Richard Rudden, chief executive of Target Rock.
"Investing in the sustainable utility sector appears to make a lot of sense," he said, "Many pension funds and aging investor populations seek less volatile, longer term returns comprised largely of current income through dividends, but with moderate upside stock price potential as well."
Assets under management by socially responsible investment funds could reach $9 trillion in the U.S. alone by 2015. According to Rudden, 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.
Until now, there have been no sector-specific sustainability indexes focused exclusively on publicly-traded utilities in the U.S. "This is surprising when you consider how complex and different the utility segment is from the other industry segments that are normally included in multi-segment indexes," according to Kyle Rudden, co-founder and partner at Target Rock and the chief architect of both the scoring system and indexes. "There is a tremendous need for a utility index based on a sophisticated knowledge of the sector. Institutional investors and asset managers have lacked a system that offers highly useful sustainability performance information."
In addition to its indexes, Target Rock provides the utility industry executives, with critical services to assist companies, both large and small, in meeting their sustainability objectives. Through Target Rock's benchmarks and indexes, the company can assist utility clients in identifying areas for performance improvement and best practices that may lead to improved brand image, attract coverage by industry analysts and pique investor interest.
The company has published a family of ten sustainability-related indexes. Four "flagship" indexes relate to overall sustainability scores (High, Medium, Low and all 49); three are based on only the Environmental, Social and Governance ("ESG") dimensions of the triple bottom line; and one index each ranks the top 15 Economic performers, top 15 Environmental performers and top 15 Social performers. A list of all utilities and indexes, as well as information on their historical stock performance and underlying sustainability scores and rankings, are available at www.targetrockadvisors.com.
Target Rock will be releasing additional rankings and indexes in the coming months. "This is the first generation of our products and we expect there will be some adjustments to our approach in the future," said Richard Rudden. "We are confident that the quality and value of our indexes are the best currently available to the U.S. utility sector and are generations beyond the nearest competitor."
About Target Rock Advisors, LLC
Target Rock is dedicated to the rigorous study and implementation of sustainability policies and practices within the utility and financial industries. The Company's mission is to provide data, information, analytical systems and deep sector-specific technical expertise that identifies areas for improved performance and helps utility companies achieve their sustainability objectives with favorable social and economic outcomes. Through its partners and associates, Target Rock has over 250 years of combined experience in sustainability and executive leadership, equities and fixed income analysis, financial management, statistics and econometrics, regulatory policy analysis and management consulting. More information on Target Rock can be found at www.targetrockadvisors.com.
SOURCE Target Rock Advisors, LLC
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