S&P Dow Jones Indices declared it would be removing Adani Ports and Special Economic Zone from its sustainability index, after recent media coverage over the company’s commercial relationship with the Myanmar military.
The military is “alleged to have committed serious human rights abuses”, the company noted, reflecting on its recent review of the stock.
The decision has been made after a collective of human rights and environmental groups criticised the provision of Adani on the index. The campaign has also targeted large investors such as BlackRock and JP Morgan.
But S&P will face further pressure from the collective, which is now seeking the removal of other companies catering services to the Myanmar military.
Justice for Myanmar spokesperson Yadanar Maung commented the groups will now be pushing for S&P to delist other businesses from the index, including Daiwa House Industry, Tokyo Tatemono, AviChina Industry & Technology and Bharat Electronics.
“S&P’s decision gives a clear signal that doing business with the Myanmar military, which has murdered more than 700 people since the February 1 military coup, cannot be whitewashed as ‘sustainable’,” Ms Maung said.
“This shows there are commercial consequences for Adani Ports and other businesses that continue to disregard human rights responsibilities by financing the Myanmar military.”
Australian Centre for International Justice executive director Rawan Arraf commented investors should be aware of the risk involved in buying into a business with unethical traits.
“Adani Ports’ business with MEC – a sanctioned entity in the US and UK – means investors could be supporting a company that may be seen to be providing material support to a sanctioned entity. This is not a risk worth taking,” Mr Arraf said.
The Future Fund was also recently grilled in a parliamentary hearing on its investments in Adani Ports, through a State Street passive strategy.
But chief executive Raphael Arndt defended the decision, commenting the holding was a ripple in the ocean of money the sovereign wealth fund overlooks.
