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15 Feb 2024

Inclusive Development International

Myanmar: ESG indexes littered with companies linked to human rights abuses; OECD complaints filed

"ESG investing giants under scrutiny for fueling rights abuses in Myanmar", 15 February 2024

MSCI, FTSE Russell and S&P Dow Jones Indices, leading providers of investment indexes tailored for Environmental, Social and Governance (ESG)-focused investing, are violating the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct by promoting ESG-labeled investment in companies linked to Myanmar’s military. This is according to complaints filed this week by Inclusive Development International, Alternative ASEAN Network on Burma (ALTSEAN-Burma) and Blood Money Campaign of Myanmar (BMC). The complaints were submitted to the U.S., U.K. and Dutch National Contact Points for Responsible Business Conduct, which are government offices tasked with handling complaints alleging noncompliance with the OECD Guidelines for Multinational Enterprises. The complaints outline how each of the three firms has failed to uphold its human rights due diligence responsibilities and failed to use the considerable leverage it has over companies listed on its ESG indexes to address serious human rights risks and impacts stemming from those companies’ ties to the Myanmar military.


MSCI, FTSE Russell and S&P Dow Jones Indices construct lists—known as indexes—of companies they consider to have rated highly on ESG factors, which greenlights those companies for inclusion in ESG-labeled investment funds (i.e., funds with names that include phrases like “ESG Leaders” and “ESG Screened”), which are marketed to investors as socially responsible. But Inclusive Development International’s research shows that the ESG indexes provided by these three firms systematically fail to accurately capture and reflect companies’ human rights track records. As a result, investment funds that are modeled on those indexes are littered with companies that are linked to serious human rights abuses, including in Myanmar.