JPMorgan Investment Arm Wipes ESG Portfolios Clean Of Exposure To Adani Group: Report

Following the publication of the Hindenburg Research report on 24 January 2023, the JPMorgan Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF  offloaded more than 70,000 shares in cement manufacturer ACC Ltd., exiting a stake it’s held since May 2021, said the data.

New Delhi: JPMorgan Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF and JPMorgan AC Asia Pacific ex-Japan Research Enhanced Index Equity ESG UCITS ETF — two investment arms of JPMorgan Chase and Co., have wiped their ESG portfolios clean of their exposure to the Adani empire, according to data compiled by Bloomberg.

Following the publication of the Hindenburg Research report on 24 January 2023, the JPMorgan Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF  offloaded more than 70,000 shares in cement manufacturer ACC Ltd., exiting a stake it’s held since May 2021, said the data.

JPMorgan AC Asia Pacific ex-Japan Research Enhanced Index Equity ESG UCITS ETF sold the roughly 1,350 shares it had held in the company since July last year, the data show. As per Bloomberg, this means that JPMorgan, which had held a 0.04 per cent stake in ACC, now has no further exposure to any parts of the Adani conglomerate via ESG funds.

Both the aforementioned funds are registered as Article 8, which under EU rules means they’re required to “promote” ESG (Environmental, Social, and Governance) goals. JPMorgan continues to hold Adani stocks in non-ESG funds.

As per Bloomberg, around 500 ESG funds in Europe hold Adani stocks. It says most of the holdings are contained in funds registered as Article 8, meaning they’re required to “promote” environmental, social and governance goals under European Union rules. A handful of so-called Article 9 funds, which are required to target 100 per cent sustainable investments, also hold Adani stocks, the report added.

The Bloomberg report has quoted Anthropocene Fixed Income Institute, which has been studying the Adani Group since mid-2020, which said that funds with at least $10 billion in assets under management tracking MSCI ESG indexes held shares in Adani Enterprises Ltd. alone when the Hindenburg report was published.

Asset managers such as BlackRock are reducing their exposure to Adani Group through other indices. S&P Global Inc. said this month it was removing Adani Enterprises from its Dow Jones Sustainability Indexes. Sustainalytics has downgraded the ESG scores of several Adani companies.

MSCI still holds Adani stocks in its ESG indexes and has made no changes to the ESG ratings of Adani companies since the publication of Hindenburg report. While Adani Total Gas Ltd. and Adani Green Energy Ltd. both hold an A rating, three entities — Adani Enterprises Ltd., Adani Power Ltd. and Adani Ports & Special Economic Zone Ltd. — hold MSCI’s lowest ESG rating, CCC.

“Many of the Adani companies already performed poorly on corporate governance,” a spokesperson for MSCI said told Bloomberg. MSCI has previously assessed a range of ESG controversies tied to Adani, including “community opposition to specific projects and questionable business ties,” the person added.

The 10 listed firms of the Adani Empire have lost over $150 billion in combined market capital ever since the January 24 report was published by Hindenburg Research.