PSBs fail to figure in S&P ESG index

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Mumbai, Feb 3 : The exclusion of most of the state-owned banks from global rating agency Standard & Poor’s Environmental and Social and Governance (ESG) India Index has earned flak from bankers, who said public sector lenders spend a lot of money on social responsibilities.

The index, which lists 50 domestic companies meeting the ESG standards, has been compiled by Standard & Poor’s, Crisil and KLD Research & Analytics. It was released last week.

While the index lists most of the blue-chip firms, only Punjab National Bank and Andhra Bank, among public sector banks, have made it to the list from around 27 PSU lenders.

“Around 500 companies listed on the National Stock Exchange (NSE) were passed through a two-stage screening process. Various parameters, including the liquidity of the companies, were examined,” S&P’s chief economist (Asia Pacific) Subir Gokarn said.

S&P has claimed that the index is the first investible index of companies in India, whose business strategies and performance demonstrate high level of commitment towards meeting ESG standards, he said.

Meanwhile, the exclusion of state-owned banks from the index has raised many eyebrows, prompting them to question its credibility.

“It is the PSBs in the country which do a phenomenal job when it comes to ESG activities. Nobody will believe in the outcome of such surveys, coming without proper research,” said the chairman of a leading public sector bank.

S&P said the ESG companies assure investors that their portfolio balances the interests of stakeholders, and, thereby, creates a platform for strong long- term performance. Commenting on the index, SBI’s community services banking department chief manager SP Kaliamoorthy said the bank had been very active on ESG parameters, promoting inclusive growth through its widespread microfinance programmes.

“The fact that SBI is not there in the Index is surprising. I wonder on what parameters it has been prepared,” Kaliamoorthy said.