Dozens of ESG funds sold more than $1 billion worth of Tencent Holdings shares in the past six months, as concerns about Chinese censorship and regulatory risks grew, reports Bloomberg.
Sustainalytics, an ESG research and ratings company, in late August downgraded Tencent to the category of “non-compliant” with UN principles. Since then, funds run by AXA Investment Managers SA, Candriam and Storebrand Asset Management sold their stakes; among ESG funds in Europe, more than 40 sold Hong Kong-listed shares valued at $1.2 billion, according to data compiled by Bloomberg.
Though many ESG investors still own Tencent and other Chinese internet companies, the exits illustrate how some are grappling with challenges posed by the nation’s record of surveillance and suppression of free speech, including on platforms like Tencent’s WeChat. The government’s crackdown on technology firms has also called into question the viability of investing in the sector in recent years.