Inclusive Development International has filed complaints against three ESG index and ratings providers claiming they have violated OECD guidelines on responsible investing.

The IDI, a not-for-profit organisation, says that MSCI, FTSE Russell and S&P Dow Jones Indices are violating the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct by promoting ESG investment in companies linked to Myanmar’s military junta.

The organisation has filed complaints with US, UK and Dutch regulators outlining how the three firms have failed to uphold their human rights due diligence responsibilities. It says they have also failed to use their leverage over companies to address human rights abuses linked to companies’ with ties to the Myanmar military.

Natalie Bugalski, senior legal and policy director at Inclusive Development International, said, “MSCI, FTSE Russell and S&P Dow Jones are gatekeepers for trillions of dollars in ESG-labelled investment and the reputational benefits that companies gain from that investment. 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. Instead, they’re directing enormous sums of ESG-labelled capital to companies that are enabling violence and repression in Myanmar, without any attempt to prevent or mitigate this abuse.”

Companies that IDI says has links with the Myanmar military include arms manufacturers Bharat Electronics and Wärtsilä and telecommunications company Axiata Group of Malaysia. The organisation also says that Alphabet and Apple both have app stores used by military-linked companies to promote their products.

S&P said in a statement, “Inclusive Development International’s report is misleading and inaccurate. S&P Dow Jones Indices’….published methodologies are anchored on a robust index governance process.”

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