Sustainable investing is an increasingly mainstream activity. But utilities are only beginning to adjust their business approaches to get in on the popularity of using those sustainability metrics to evaluate company performance and outlooks.

While the industry may appear to be awash in metrics, and the sector was in large part born out of an indexation process kicked off by the United Nations and continued in this year’s high-profile Sustainable Energy for All initiative, a new company from a father-and-son pair of energy experts says it has identified a remaining gap in the market for indices.

Target Rock Advisors was organized to cut through the noise and create “financial market indexes, and other metrics necessary to facilitate sustainable planning and development, as well as inform socially responsible investment decisions,” the company says.

Target Rock has developed what it calls the “Target Rock Composite Utility Index,” which consists of a 48 company universe based on six “rigorous” criteria. The data is sourced directly from company regulatory filings and not from more subjective corporate social responsibility reports that have become de rigueur.

The company’s analysis seeks to more easily digest the vast sustainability data pool by breaking it down into component parts and evaluating SRI, CSR and ESG data separately. Using this approach, Target Rock claims it has “identified exactly where in the sprawling, diverse universe of so-called Sustainable Investment, value has been found.”

Richard Rudden, Target Rock’s CEO, told Breaking Energy the initiative launched in February of this year and the company’s goal is to publish their indices with an eye toward having them licensed by SRI funds and possibly traditional index funds as well. Rudden, who sold his Rudden Associates to Black & Veatch in 2005, has been joined at the company by his son and cofounder Kyle, a former JP Morgan energy and utilities research chief.

Rudden said Target Rock is seeking industry feedback as the company looks to improve the indices and expand the universe of contributing companies and comparative metrics. Some positive feedback received thus far is that using company filings ensures the information is hard and factual.

A drawback to this approach, however, is that since company filings cover the reporting period that most recently past, they do not always “reflect a firm’s current activities or future plans,” said Rudden. That reflects the firm’s desire to rely solely on verifiable facts, although an additional softer directional indication may be added to reflect the industry’s ongoing shift to generation mixes and business types that better reflect sustainable investing values.

Companies that rank highly on Target Rock’s sustainability index also tend to provide investors with decent returns. One reason for this appears to be that companies with robust sustainability programs tend to have high quality management teams.

Strong sustainability programs seem to be “good management quality indicators,” Rudden said.