The asset management unit of JPMorgan Chase & Co. has wiped its ESG portfolios clean of their exposure to the Adani empire.
The move, captured by an analysis of data compiled by Bloomberg, comes as a number of major investment firms such as BlackRock Inc. and the fund management unit of Deutsche Bank AG, DWS Group, continue to sit on Adani stakes in ESG funds that track indexes offered by MSCI Inc.
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Spokespeople for JPMorgan and BlackRock declined to comment. A spokesperson for DWS said that when it comes to its MSCI-tracking ETFs, “no proprietary DWS ESG assessment is used,” in an emailed response to questions. MSCI said by email that the results of a regular review of its ESG and climate indexes “will be implemented” at the end of this month. The firm hasn’t adjusted any Adani ESG ratings.
The Details….
The JPMorgan Global Emerging Markets Research Enhanced Index Equity ESG UCITS ETF (ticker: JREM LN) offloaded the more than 70,000 shares in cement manufacturer ACC Ltd., exiting a stake it’s held since May 2021, according to a data review by Bloomberg that looked at movements following the Jan. 24 publication of the Hindenburg report.
A second fund, the JPMorgan AC Asia Pacific ex Japan Research Enhanced Index Equity ESG UCITS ETF (ticker: JREA LN), sold the roughly 1,350 shares it had held in the company since July last year, the data show. The moves mean JPMorgan, which had held 0.04% in ACC, now has no further exposure to any parts of the Adani conglomerate via ESG funds, according to Bloomberg data.
Both funds are registered as Article 8, which under EU rules means they’re required to “promote” ESG goals. JPMorgan continues to hold Adani stocks in non-ESG funds.
The presence of Adani companies in numerous ESG indexes meant they were automatically held by many ESG fund managers. Util, an ESG research firm, notes that Adani stock documents were also replete with the kind of ESG verbiage that portfolio managers often look for. Adani has pointed to its adoption of multiple global ESG frameworks, including the Task Force on Climate-Related Financial Disclosures (TCFD) and Sustainable Development Goals (SDGs) as proof of its focus on sustainability.
But for many, Adani became too toxic to hold after a Jan. 24 report by short-seller Hindenburg Research, which alleged the conglomerate was guilty of fraud and market manipulation. The Adani Group has rejected the claims and hired lawyers and communications specialists in an effort to resurrect its image.
Read the full article here by Natasha White, Advisor Perspectives.
