Sands China Qualifies for Dow Jones Sustainability Index

Posted on: November 26, 2021, 01:24h. 

Last updated on: November 26, 2021, 03:24h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Sands China (OTC:SCHYY), the Macau arm of Las Vegas Sands (NYSE:LVS), is now a qualifying constituent of the Dow Jones Sustainability Asia Pacific Index.

Sands China
Venetian Macau owner Sands China is entering a prestigious equity index. That could be good news for the shares. (Image: Asia Times)

That’s rarefied air for Sands China, because gaming companies aren’t usually included in sustainability indexes. In fact, the gaming company is the only integrated resort operator included in the Asia-Pacific benchmark, and it’s one of just three consumer services companies in the gauge.

The Dow Jones Sustainability Asia/Pacific Index is designed to measure the performance of Asia-Pacific sustainability leaders as identified by S&P Global through the Corporate Sustainability Assessment (CSA),” according to the index provider. “It represents the top 20 percent of the 600 largest companies in the Asia-Pacific developed region in the SP Global BMI based on long-term economic, environmental and social criteria.”

Sands China, the operator of five integrated resorts in Macau, is one of just 12 China- or Hong Kong-listed names in the Dow Jones index.

Why It Matters

Sands China commanding a spot in the sustainability index is relevant for multiple reasons, not the least of which is money managers that benchmark to that gauge have to buy the gaming company’s shares. Additionally, data confirms investors are flocking to ESG funds.

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.

“Environmental, social, and governance (ESG) exchange traded funds (ETFs) and exchange traded products (ETPs) listed globally gathered net inflows of US$11.25 billion during October, bringing year-to-date net inflows to US$130.28 billion, which is much higher than the US$54.91 billion gathered at this point last year,” according to ETFGI, a London-based ETF research firm.

Sands China’s entry into the Dow Jones Sustainability Asia Pacific Index is relevant for another reason: Funds that benchmark to that index must buy shares of Sands China.

Sands Has Been Here Before

News of Sands China being included in the Dow Jones Sustainability Asia Pacific Index arrives nearly a year to the day after Las Vegas Sands was added to the Dow Jones Sustainability World Index.

The casino operator was also included in the Dow Jones Sustainability North America Index, making it the first gaming equity to be included in both of those benchmarks. At that time, LVS was the only gaming name in those benchmarks.

The Dow Jones Sustainability North America Index comprises North American sustainability leaders as identified by S&P Global through the Corporate Sustainability Assessment (CSA), says S&P Dow Jones Indices.