APSEZ says MSCI’s move to drop it from Climate Change Indices lacked “transparency”

Our Bureau | | | Updated on: Nov 29, 2021
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Move an attempt to undermine the firm’s legitimate business interests and tarnish its reputation as a green port operator

Stung by MSCI’s decision to remove Adani Ports and Special Economic Zone (APSEZ) from the US finance company’s Climate Change Indices, India’s biggest private port operator hit back saying that the move lacked “transparency” and was an “attempt to undermine APSEZ’s legitimate business interests”.

MSCI said it will drop APSEZ from its MSCI ACWI IMI Climate Change Indexes from December 1 stating that the port operator does not meet the eligibility criteria for the index following a revision to the ESG Controversy Assessment.

MSCI is said to have cited APSEZ’s involvement in the Carmichael mine, rail and coal export terminal in Queensland, Australia for its decision.

New York-based MSCI Inc. provides equity, fixed income, hedge fund stock market indexes, multi-asset portfolio analysis tools and ESG products.

“We are taken aback by the untransparent methodology MSCI has adopted, given that APSEZ was included in MSCI’s indices when it was holding these stakes and was removed from the indices after these stakes were divested. While we are disappointed with such an opaque process, we stay completely open to engaging with our investors and with MSCI to ensure complete alignment on the sustainability agenda,” APSEZ said in a statement.

“MSCI’s decision appears to be playing right into the hands of forces that want to subvert the green initiatives to which the Adani Group has made massive public commitments and tarnish the reputation of one of the leading green port operators of the world,” APSEZ said.

“Email communication of 9 September accessed from the website of Market Forces Australia, which has been stridently campaigning against Adani businesses, reflects that MSCI has already informed them as to how APSEZ’s exclusion from the indices is being structured. Clearly, this is an attempt to undermine APSEZ’s legitimate business interests,” it said.

ESG Controversy Report

Responding to an ESG Controversy Report from MSCI in Q3, APSEZ said it had clarified to MSCI that it never had any shareholding in the Carmichael mine, and that it had already divested its stakes in both Bowen Rail and NQXT (North Queensland Export Terminal). It had also sent a reminder to MSCI on the matter. “However, MSCI has not bothered to either incorporate the facts or provide an appropriate response to APSEZ,” it said.

APSEZ has been far ahead of the industry in stating publicly, more than 15 months back, its absolute commitment to achieving carbon neutrality by 2025. In addition, we are also committed to the SBTi (Science Based Targets Initiative), it said.

“APSEZ's management has constantly engaged with various stakeholders, particularly sustainability-focused investors and ESG rating agencies, and has been acting on the inputs received from them. We are confident that our standing is strong with investors, given our ability to consistently create value for our shareholders and all other stakeholders,” APSEZ added.

In April, S&P Dow Jones Indices dropped APSEZ from the Dow Jones Sustainability Indices, citing the firm’s business links with the Myanmar military responsible for the coup which overthrew that country’s democratically elected government on February 1 and the human rights abuses that followed.

APSEZ is building a container terminal with an investment of $290 million along Myanmar’s Yangon River on a 50-year deal, which the firm said in October it has decided to exit.

Published on November 29, 2021

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