HLL, ABB, MRPL fail to meet ESG standards: Report

Mumbai, May 27 (UNI) Indian companies Hindustan Lever, ABB Ltd(India) and Mangalore Refinery and Petrochemicals Limited are among the listed entities which have failed to invite sustainable investments from foreign institutional investors(FIIs) owing to their inability to meet Environmental, Social and Governance(ESG) issues.

According to a report released by The Energy and Resources Institute(TERI) the failure of the companies to meet ESG requirements could have also affected the shareholder values in the respective firms.

The report, compiled out of a study held by Dimensional Fund Advisors(DFA), a fund manager of California Public Employees Retirement System(CalPERS), was released by TERI in Mumbai on Friday.

This apart, of the 22 Indian companies that have been listed by DFA as companies that stand on the verge of failure in meeting ESG standards, 17 are BSE-100 companies and 11 from the top 50 companies in the Standard&Poor CNX Nifty index.

On the other side, as many as nine Indian companies have appeared most likely to be significant holdings in the portfolios of FIIs that employ sustainable investment practices, says TERI report.

These companies include Bajaj, Cipla, Dr Reddy's Laboratories, HDFC Bank, ICICI Bank, Infosys, Mahanagar Telephone, Suzlon Energy and Tata motors.

''Among the nine listed companies, Suzlon energy seems to be a particularly popular stock, appearing in the top 10 holdings of several funds including the USD 3 billion MLIIF New energy fund, which is managed by BlackRock Merill Lynch Investment Managers'', said Dan Siddy, TERI.

Sustainable investments, which accounts around USD 3.7 trillion of global assets under management, has grown 36 percent in Europe during 2003-2006.

However, emerging markets together could contribute only 1 billion to the total sustainable investment assets world-wide.

The report has also put forward a set of recommendations to improve the company performances with sustainable investments that include improving awareness of corporate leaders in such investments, developing co-ordinated programmes around the carbon disclosure project, surveying attitude of retail investors, tracking out business case evidences specific to India and reaching out to International sustainable investors.

UNI