Breaking News: Adani Enterprises Gets Booted from Sustainability Indices

 Adani:- S&P Dow Jones Indices has just made a game-changing announcement that's sending shockwaves through the investment world. They've announced that they will remove Adani Enterprises from their widely used sustainability indices, effective February 7th. This is a major blow for the flagship company of the Adani Group, and it's only going to add fuel to the already raging fire that is the market rout of Adani Group stocks.   The stakes just got higher for Adani Enterprises, as the removal from the S&P Dow Jones Sustainability Indices will have a significant impact on its appeal to environmentally conscious investors. This move follows a Media & Stakeholder Analysis triggered by allegations of stock manipulation and accounting fraud. But, what exactly does this all mean, and what's behind this controversial decision?

The Secret Behind the S&P Dow Jones Sustainability Indices

The S&P Dow Jones Sustainability Indices are no ordinary indices. They represent the cream of the crop, the top 10% of the largest 2,500 companies in the S&P Global Broad Market Index. These companies are identified as global sustainability leaders by S&P Global through its Corporate Sustainability Assessment (CSA). The CSA is no ordinary assessment either, it's a best-in-class approach that compares companies across 61 industries and assesses their sustainability performance in terms of economic, environmental, and social criteria. Companies receive scores and percentile rankings for approximately 20 financially relevant sustainability criteria, and the CSA is now the basis for many other ESG indices.

The Rise of ESG Investing

ESG stands for Environment, Social responsibility, and (Corporate) Governance, and it's a hot topic in the investing world. With the asset size of ESG funds ballooning, and more and more companies participating in assessments like the S&P Global CSA, ESG investing is becoming increasingly popular. In 2021, NSE Prime was launched, a framework that allows companies to submit to higher standards of corporate governance than those required by existing regulations.

The Incredible Fall of Adani Group Stocks

Since the Hindenburg Research report came out, the seven listed Adani Group companies have seen a market capitalisation drop from $217 billion to $102 billion. And the removal from the S&P Dow Jones Sustainability Indices is only going to make things worse. Stocks of Adani Enterprises hit their 15% lower circuit on the announcement, and the NSE has now placed Adani Enterprises, Adani Ports & SEZ, and Abuja Cements under additional surveillance measures (ASM), which means trading in their shares now requires a 100% margin.

Conclusion

This is a major development in the world of ESG investing and sustainability indices. The removal of Adani Enterprises from the S&P Dow Jones Sustainability Indices is a clear sign that companies must take their environmental, social, and governance responsibilities seriously if they want to stay on top. And, with the market rout of Adani Group stocks continuing to widen and deepen, it's clear that investors are taking notice and making their views known.