13.04.2022

Appeal to the ESG Rating Companies

Dear colleagues from S&P Global (Sustainable1), MSCI Inc., Sustainanalytics, Bloomberg LP, FTSE Russell, An LSEG Business, ISS ESG, Forum Ethibel, Morningstar, and Global Reporting Initiative (GRI),

We writing to you on behalf of the UN Global Compact Network Ukraine.

On February 24, a full-scale war launched by Russia broke out in Ukraine, the second largest country in Europe. Peaceful cities and their citizens have become targets for tanks, missiles, and aircraft. More than 20 000 civilians (and 183 children) have so far been killed, more than 6 100 houses have been destroyed, and more than 11 million of people have been forced from their homes. There is a full-scale humanitarian crisis in many Ukrainian cities.

Every international business operating in Russia contributes to sponsoring Russia’s aggression against Ukraine. Every ruble paid in taxes to Russia turns into death and tears of the Ukrainian people and their children. In our opinion, financing war crimes is equivalent to committing war crimes.

With this in mind, we would like to understand the ways you have and will penalize the companies operating in Russia through your ESG scores and related services.

According to the list of international companies in Russia by the Yale School of Management, there are many notable, international companies (like Nestle that has AA rating by MSCI) that still operate in Russia. Leaving the market is always a very expensive step; however, when we consider not only the financial aspect of companies but also their values, we see that the decision to leave is reasonable and justified. We strongly believe that the ESG scores of companies that are hurting Ukrainian society and sponsoring the war should be reevaluated.

There are many reliable Ukrainian resources like Forbes Ukraine, Ekonomichna Pravda, Delo.ua and, Novoe Vremya that highlight the situation in Ukraine and international companies that make an impact on the war. We recommend that you deepen and broaden your use of these trusted news sources.

Russian sources like Yandex News, Mail.ru NewsRBK, Kommersant.ru are not reliable and continue to justify the war, calling it a “special operation” and pretend that everything is under control. All of the independent Russian SMs like Meduza, Dozhd’ were forced to stop operations locally.

Companies like Leroy Merlin, Metro C&C, and Nestle, which continue to operate in Russia and ignore the crisis unfolding in Ukraine, are funding the violation of human rights, one standard and essential ESG criteria. There are other examples of companies like DHL that need to be re-checked. The company recently announced that it is ceasing business in Russia (see the first screenshot). Here is the direct quote: “DHL also decided to suspend its domestic operations in these countries until further notice”. And now on the Russian site DHL (the second screenshot) was posted that all activity is resumed, and they do business as usual. Moreover, it is not allowed to see it from Ukraine or other foreign countries – you will see 403 error. The web page is shown only for Russian IPs (We logged in via VPN). There is no news or comments on the global DHL website about this issue.

In light of these serious issues, we ask you to pay attention to these facts and consider strengthening your penalties, such as further reducing a company’s ESG rating or even no longer issuing ratings for offending companies. Those companies that are sponsoring the war should not have a high ESG rating and be an example to others. Please prove to all investors that your analytics are robust and objective, accurately capturing current events.

In late April or May, we plan to issue a public letter with recommendations we would make to ESG ratings companies. But before this, we would like to understand in detail how the Russia/Ukraine war is factoring into your ESG scores and other related services. With this goal, we would welcome a call to discuss this matter further.

We are looking forward to your reply and your suggested dates and times when we can speak regarding the topic above.

Поширити новину: