February 20, 2024
Credits @FFHR.CZ
The index providers MSCI, FTSE Russell and S&P Dow Jones Indices are alleged to be in violation of Organisation for Economic Co-operation and Development guidelines, by promoting ESG-labeled investment in companies with links to the military regime of Myanmar, formerly known as Burma.
The claims were made by NGOs Inclusive Development International, Alternative ASEAN Network on Burma and Blood Money Campaign of Myanmar, according to a statement published online on Feb. 15 by the IDI.
The complaints were submitted by the NGOs to the U.S., U.K. and Netherlands-based National Contact Points for Responsible Business Conduct, which handles issues related to the relevant OECD guidelines.
The complaints claim that the indices failed to uphold human rights due diligence responsibilities and did not use leverage over companies listed on its ESG indexes to address serious human rights risks and impacts related to companies with ties to the Myanmar military.
Myanmar's military retook power in the country in a 2021 coup d'état, and the United Nations has previously called on its leaders to be investigated for crimes such as genocide and crimes against humanity.
Of the filing, an S&P DJI spokeswoman said in emailed comment: "Inclusive Development International's report is misleading and inaccurate."
"As an independent index provider, S&P Dow Jones Indices does not structure, sell, market, or issue any investment products based upon its indices which follow rules-based, published methodologies and are anchored on a robust index governance process."
In 2021, the S&P DJI did remove the infrastructure company Adani Ports and Special Economic Zone, Ahmedabad, India, from its sustainability index as a result of the firm's alleged ties to the Myanmar military.
In emailed comment, the MSCI response to the complaint was: "MSCI Indexes follow transparent and rules-based methodologies."
FTSE Russell did not respond to request for comment on its being named in the complaint.
Inclusive Development International claims that ESG-labeled investment funds modeled on indexes created by MSCI, FTSE Russell and S&P DJI own at least $13 billion worth of shares in dozens of companies that maintain ties to Myanmar's military.
Those companies include Bharat Electronics, Bangalore, India, which has allegedly supplied arms, radar systems and communications technology to the Myanmar military, and Wartsila, Helsinki, Finland, that is also reportedly involved in weapons sales to the military.
In emailed comment, a spokesperson for Wartsila said: "(the firm) is a global leader in innovative technologies and lifecycle solutions for the marine and energy markets, emphasising innovation in sustainable technology and services. Wartsila does not provide any services or products which are related to armament or weapons."
Bharat Electronics has also been contacted for comment.
Source: pionline.com
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