JPMorgan says it has added state owned oil companies Petronas and Pertamina to a watchlist for removal from its ESG EMBI index.

The bank said both companies, “are expected to exit the ESG suite at the June month-end rebalance” as their ESG scores failed to meet its criteria and they are no longer eligible for inclusion. Sustainalytics which provides ESG ratings to the bank are reported to have said that some of Petronas’ or its affiliates’ activities may be viewed as a violation of a UN arms embargo. Pertamina’s saw a refinery fire in West Java that has reduced its ESG score.

Petronas currently has a 121 basis points weight in the index, while Pertamina’s stands at 49 bps.