Financial

Las Vegas Sands Entering Dow Jones Sustainability Index, Rare Achievement for any Gaming Company

Las Vegas Sands (NYSE:LVS) stock is accomplishing something that’s a rarity in the gaming industry. It’s being included in the Dow Jones Sustainability World Index. That’s a benchmark where components are evaluated on the basis of long-term economic, environmental, and social criteria.

The Venetian Las Vegas, seen here. Sands’ commitment to solar power and other factors led to its inclusion in a sustainable equity index. (Image: Getty Images)

This is the first time the Venetian operator is being included in that equity gauge, and it earned repeat placement in the Dow Jones Sustainability North America Index, becoming the first domestic gaming company featured in both indices.

The company remains in the top percentile of DJSI-eligible companies for year-over-year environmental performance. The company also continued to expand its overall ESG disclosures in 2019,” according to a statement.

Inclusion in the indices is no small feat for LVS. Environmental, social, and governance (ESG) investing is an increasingly popular style among asset allocators. However, many of the equity benchmarks that adhere to ESG principles intentionally exclude specific industries. Those typically include adult entertainment, alcohol, civilian firearms manufacturers, tobacco, and, yes, casino gaming.

Yes, It’s a Big Deal

LVS garnering a place in the Dow Jones Sustainability World Index is relevant for multiple reasons, not the least of which is money managers that benchmark to that gauge has to buy the gaming company’s shares. Additionally, data confirm investors are flocking to ESG funds.

“Sustainable funds in the United States have attracted a record $30.7 billion in net flows so far in 2020,” notes Morningstar. “It only took until July this year for sustainable funds to garner more flows than they did in all of 2019, and last year’s $21.4 billion net flow was itself 4 times higher than in any previous year.”

In many cases, some of the companies that are stars of the ESG universe ace the environmental part of the equation, while lagging in social and governance areas. While LVS currently has one female board member — Micheline Chau — the company checks other vital social and governance boxes.

For example, Chairman and CEO Sheldon Adelson personally donated two million surgical masks to US hospitals at the start of the coronavirus pandemic, and the company committed to pay Las Vegas workers through October. That’s even as COVID-19 led to weak demand, forcing weekday closures of many amenities at its Strip properties. By comparison, some rivals laid off or furloughed staff to manage costs during the pandemic.

The operator also has an impressive environmental track record. Sands Convention Center, Venetian and Palazzo in Las Vegas, and Marina Bay Sands in Singapore are solar-powered venues. Venetian was the first integrated resort on the Strip to embrace on-site renewable energy technologies.

Dow Jones Index

LVS is one of 318 equities in the Dow Jones Sustainability World Index, 59 of which are US-based companies. The consumer discretionary group accounts for 5.1 percent of the benchmark’s weight. This is the sector in which Sands stock resides.

The index is rebalanced annually in September, and S&P Dow Jones Indices did not say if other gaming operators are positioned to join the gauge next year.

Todd Shriber

Gaming Financials, Casino Business----Todd Shriber got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long/short hedge fund, where he specialized in trading sector and international ETFs leading up to and during the financial crisis. Currently, he analyzes, researches, and writes on ETFs for a variety of Web-based publications and financial services firms. Shriber has been quoted in Barron's, CNBC.com, and The Wall Street Journal. His work has been published on sites such as Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He joined the Casino.org news writing team in 2019, and lives in Southern California, where he enjoys golf and taking his black lab to the dog park. When in Las Vegas, he likes to wager on college football, the NBA, three-card poker, and roulette, even though he knows better. Email: todd.shriber@casino.org

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Todd Shriber