Semiconductor Manufacturing International Corp (SMIC) will be added to two ESG-focused indices in Hong Kong, despite being a sanctioned entity in the US, Bloomberg reports. SMIC will join the HSI ESG Enhanced Index and the HSI ESG Enhanced Select Index on June 13. Its shares rose as much as 1.3% on May 26 before erasing gains. In 1Q2022, SMIC’s earnings more than doubled y-o-y to US$447.2 million ($615.8 million).
For inclusion into the ESG (environmental, social and governance) indices, Hang Seng Indices screens stocks for their ESG risk ratings by data provider Sustainalytics, compliance with the United Nations Global Compact Principles and involvement with controversial products such as coal, tobacco and weapons.
The company was recently included in the Hang Seng Index and is already a constituent of the Hang Seng Tech Index. Launched on July 27, 2020, the Hang Seng Tech Index tracks the 30 largest tech-themed companies listed in Hong Kong. These companies are exposed to selected tech themes including cloud, digital, e-commerce, fintech, internet and autonomous driving. However, It is unclear how diversifying supply chains in the autonomous driving, semiconductor and chip sectors away from China will impact the performance of these Chinese companies.