MUMBAI -
The global trend towards socially responsible
investing has gone religious in India, with Dow
Jones Indexes and its US-based partner investment
firm Dharma Investments Ltd launching the Dow
Jones Dharma India Index in Mumbai on January 15,
the first major faith-based investment product in
South Asia.
The Dharma India index is the
latest addition to the 130,000 stock indexes Dow
Jones publishes globally, including the US,
Britain and Japan versions of The Dow Jones Dharma
Index.
The Dharma India Index, with 250
Indian companies, features stocks compliant with
the code of moral conduct according to
Hinduism, teachings of the
Buddha and which also incorporate principles of
the Sikh and Jain religious tenets - together,
ways of life with billions of followers in Asia
and forming nearly 20% of the human race.
The index license is sold to asset
managers and others wishing to commercially use
the Dow Jones Indexes information to market
investment products or for publication in the
media, such as television and the Internet.
According to a Dow Jones presentation in
Mumbai, socially responsible investing (SRI),
including faith-based investing, accounts for US$4
trillion worth of assets under management, a
figure growing 20% annually.
European SRI
assets are worth nearly $1.75 trillion and such
assets are worth $22 billion in the Asia-Pacific
region, according to Dow Jones. "Historically, the
increase of wealth within any population has
resulted in an interest in ethical investing," the
Dow Jones Dharma Investment presentation noted.
India's first SRI product was the ABN AMRO
Sustainable Development Fund, launched in March
2007. The Dow Jones Dharma Index is the first
major faith-based SRI product in India.
"Mid-to-long term, we expect products like
funds, open-ended funds, index funds, certificates
but also exchange-traded funds" to be potential
investors to the index, said Nicole Wesch, from
the Frankfurt office of Dow Jones.
The DJ
Dharma India Index value will be updated daily
with a quarterly review. "The review frequency of
indexes depends on the use of the indexes," said
Wesch. "For example, the Dow Jones Wilshire 5000
is reviewed monthly and the Dow Jones Global
Titans 50 is reviewed annually." Most Dow Jones
indexes are reviewed quarterly.
The DJ
Dharma Index aims to meet the needs of socially
aware investors seeking to avoid companies with
harmful practices, services or products.
Environmental screening in the DJ Dharma Index
will consider corporate performance on emissions,
climate change and carbon footprint analysis, oil
and chemical spills, waste management and
recycling. Corporate governance filtering will
involve labor relations and disputes and
discrimination allegations, human-rights
violations, working conditions and wages.
The launch of Dow Jones Dharma Indexes
comes as stocks compliant with the Islamic code of
conduct, or sharia, are attracting more attention
worldwide, with the Islamic investment market
estimated between $400 billion to $500 billion.
The 51 Dow Jones Islamic Market Indexes,
the world's first faith-based ethical investment
products, made their debut in 1999, with input
from an independent advisory Sharia Supervisory
Board with a member each from from Syria,
Pakistan, Bahrain, Saudi Arabia, the United States
and Malaysia.
Data available from the Dow
Jones Indexes website says the DJ Dharma India
Index of 250 companies has a total market
capitalization $919 billion, compared with $1.6
trillion among 415 companies in the Dow Jones
Dharma Japan Index.
The DJ Dharma US Index
features 1,065 companies with a total $5.3
trillion in market capitalization. The full list
of companies in the Dharma Indexes is made
available only to their licensees, which denies an
independent chance to verify how accurate their
filtering mechanisms are.
For instance,
the Indian companies Dow Jones gave out as
examples in their Dharma India Index - ICICI Bank
Ltd, Larsen & Toubro Ltd, Infosys Technologies
Ltd, Housing Development Finance Corp and Bharti
Airtel Ltd - did not include any units of the
$70.3 billion Tata Group, India's most respected
corporate house, India's largest corporate
taxpayer and among the world's most socially
responsible companies.
Philanthropic
trusts own about 66% equity capital of Tata Sons,
the primary promoter, making Tata Group possibly
the largest corporate group of its kind in the
world where the majority shareholder is Messrs
Compassion and Charity.
"Until now,
faith-based investing has been restricted to
Islamic and Christian religions only," Nitesh Gor,
chief executive of Dharma Investments, told the
media. "But 20% of the world population consists
of dharmic religions such as Hinduism and
Buddhism. The idea [of the Dow Jones Dharma
Indexes] is to promote faith-based investing
through dharmic religion."
The word
dharma in the ancient Indian languages of
Sanskrit and in Pali dhamma has vast
connotations that defies exact translation into
English, but the primary meaning is "universal
laws of nature" without any sectarian divisions.
Dow Jones Indexes acknowledges that
dharma or dhamma is a "spiritual
concept central to the many religions originating
in South Asia, including Hinduism, the Buddha's
non-sectarian teachings, Jainism, and Sikhism."
The Dharma Index subscribes to the core of
all spiritual thought originating in India:
non-violence, respect for all forms of life,
compassion and loving kindness.
The
investment potential for the so-called faith-based
investment products following a moral code of
conduct is particularly big in India and offers a
combination of the country's ancient spiritual
riches with new-found economic wealth.
India, after millennia, is seeing a
resurgence in the teachings of the Buddha, not
least in the increasingly widespread practice of
Vipassana meditation. For the growing hundreds of
thousands of Vipassana practitioners from all
religions, including those from the business
community for whom brief but intense workshops are
available in numerous centers throughout the
world, products such as the Dow Jones Dharma index
make for easier choices on how to incorporate
non-sectarian, practical self-realization into
their daily lives.
Many leading Indian
businessmen are serious practitioners of
Vipassana, including media baron Subash Chandra
Goel, owner of Zee Television, Asia's leading
Hindi satellite channel. Companies such as the Oil
and Natural Gas Corporation of India and Indian
Railways offer paid leave for senior officials and
other employees to take Vipassana courses.
In Maharashtra state, of which Mumbai is
the capital, the government training center in
Pune city for senior Indian Administrative Service
officers, the Yeshwantrao Chavan Academy of
Development Administration, offers Vipassana
courses as part of the curriculum.
Mumbai,
India's busiest and most workaholic city, always
finds time for investing in spiritual health. A
long queue can invariably be found even on
mornings of working days outside the famous
Siddhivinayak Temple to Lord Ganesha, the deity
for enterprises. Christians in the city drop into
churches during the mid-day break and Friday
prayers in mosques are well attended. In the
miserably crowded suburban trains, many commuters
quietly read prayer books or sing bhajans
(devotional songs).
Faith-based investing
in India took off with the world's first online
sharia compliant online brokerage that opened in
November 2007. Parsoli Corporation Limited, a
Mumbai-based brokerage with a market
capitalization of $25 million, launched
Stockmultiplier.co.in, an online trading facility
following the sharia, the life code of conduct,
that forbids investing in businesses relating to
alcohol, gambling, pornography and entertainment
and those earning high income only from interest,
such as financial institutions and commercial
banks.
The company's Parsoli Islamic
Equity Index tracks sharia-compliant stocks from
listed equities in India's stock exchanges. "The
response was overwhelming barely two days after we
opened," Parsoli chief executive Jafar Sareshwala
told Asia Times Online. "We received over 700
enquiries of which about 20% were non-Muslims. The
idea of making money with clean investments
appeals to a lot of people.''
The growth
of Asian economies has helped to set the stage for
the present concerns with investments anchored in
religious values, according to Nitesh Gor of
Dharma Investments, speaking at the Mumbai launch
of the Dow Jones Dharma India Index.
"India and Asia have made remarkable
advances economically over the last few years and
in parallel we believe that bringing our religious
values onto the global stage offers sustainable
solutions to the problems facing the world today,"
he said.
The Dow Jones Dharma India Index
is to be screened by three committees of
academicians and religion practitioners - the
academic advisory committee, a dharma supervisory
committee and a religious council providing
guidance and establishing the principles for the
methodology.
Advisors include faculty
members from Harvard University, the School of
Oriental and African Studies in London, Britain's
Oxford Center for Hindu Studies and the Oxford
Center for Buddhist Studies, Yokohama University,
Japan, Columbia University in the US, Thammasat
University, Bangkok, and Jawaharlal Nehru
University, New Delhi. Religious figures involved
include such as the venerable monks Dr Ashin
Nyanissara, chancellor of Sitagu International
Buddhist Academy, Myanmar, and the venerable
Sangharaja, the patriarch of Cambodia, chief
spiritual advisor to the king of Cambodia.
SRI evaluation clearly can be subjective,
and what passes the SRI test for some fails for
others. For instance, the Mumbai-based RO Somani
Charitable Trust published its Karmayog corporate
social responsibility ratings on January 4, with
what it called India's first corporate social
responsibility ratings of India's largest 500
companies based on sales.
"The results of
the Karmayog CSR rating are extremely
disappointing," the survey declared, "with no
company meriting the highest five rating and with
46% of companies condemned with the lowest zero
rating ... The only four companies with a four out
of five rating were HDFC, Infosys Technologies,
Tata Steel and Titan Industries."
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