Three global investment advisory companies that say they help investors put their money into companies that are committed to ethical and responsible business are helping funnel investment into dozens of companies linked to Myanmar’s military, three nongovernmental advocacy organizations said.
They claim that MSCI, FTSE Russell and S&P Dow Jones Indices have violated the guidelines of the Organization for Economic Cooperation and Development (OECD) for responsible business by helping direct investment into dozens of companies linked to Myanmar’s military.
The three companies have created indices that claim to focus on companies with high ESG rankings (high commitments to environmental, social and governance protection), but companies with links to Myanmar’s junta are often included in ESG indexes, the three advocacy groups say.
Blood Money Campaign of Myanmar, Alternative ASEAN Network on Burma and Inclusive Development International filed complaints this week against MSCI, FTSE Russell and S&P Dow Jones Indices to American, British and Dutch national contact points for responsible business conduct, according to a joint statement from the trio of NGOs.
The three companies make lists – known as indexes – of companies they say have high ESG rankings, allowing the companies to be included in ESG-labeled investment funds that are marketed to investors as socially responsible investment funds.
MSCI, FTSE Russell and S&P Dow Jones Indices are “gatekeepers” for trillions of dollars in ESG-labeled investment, the three advocacy NGOs said.
Debbie Stothard, founder of ALTSEAN-Burma, said that companies at the top of the ESG investing industry are contributing to atrocities in Myanmar.
Inclusive Development International said that ESG indexes provided by the three firms systematically fail to accurately capture and reflect the human rights records of the companies on the indexes.
ESG-labeled investment funds managed by Blackrock, Vanguard, State Street and others, which are modeled on indexes created by MSCI, FTSE Russel and S&P Dow Jones Indices, own at least US$ 13 billion worth of shares in dozens of companies that maintain ties to Myanmar’s military.
Under the international framework on business and human rights, they have a responsibility to use that leverage to ensure that the companies they are promoting as “responsible investments” are not involved in human rights abuses, said Inclusive Development policy director Natalie Bugalski.
“Instead, they’re directing enormous sums of ESG-labeled capital to companies that are enabling violence and repression in Myanmar, without any attempt to prevent or mitigate this abuse,” she said.
The complaints say companies labelled as ESG companies by the three index creators include weapons dealers that are arming the regime, tech firms serving the military-controlled national police force, and others that direct profits to the military, allowing it to conduct surveillance and crush dissent. They include Bharat Electronics, Wärtsilä, Axiata Group, Alphabet and Apple.
Since the February 2021 coup, the junta has already killed more than 4,500 people and its military and affiliated militias have burned down about 80,000 civilian houses. More than 20,000 people jailed since the coup remain behind bars.