(Bloomberg) — Semiconductor Manufacturing International Corp. has been added to two ESG-focused indexes in Hong Kong, even as China’s largest chipmaker remains a sanctioned entity in the US.
The company will join the HSI ESG Enhanced Index and the HSI ESG Enhanced Select Index following a review, according to a statement from Hang Seng Indexes Co. late Wednesday. The change will come into effect on June 13. Shares rose as much as 1.3% on Thursday before erasing gains.
SMIC was blacklisted by the Trump administration in 2020 because of its links with the “Chinese military industrial complex,” and the US is now said to be considering tougher sanctions on the firm. The company was recently included in Hong Kong’s benchmark Hang Seng Index.
READ: SMIC 1Q Profit More Than Doubles to $447.2m From Year Ago
For inclusion in the ESG indexes, Hang Seng Indexes 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.
Hang Seng Indexes didn’t immediately respond to a request for comment. A spokeswoman for Morningstar Inc., which owns Sustainalytics, declined to comment.
Orient Overseas International Ltd., Zhongsheng Group Holdings Ltd. and CK Infrastructure Holdings Ltd. will also join the ESG gauges, while AAC Technologies Holdings Inc. has been removed.
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