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.
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.
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.
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.