Chinese listed firms used endangered animal parts as ingredients -report (updated)

Beijing Tong Ren Tang Chinese Medicine Co

23/10/2023 14:19

(Adds DWS response, source-based comments from Citi)
    By Andrew Silver and Selena  Li
       SHANGHAI/HONG KONG, Oct 23 (Reuters) - Three listed
Chinese drugmakers, whose investors include or use some of the
world's biggest banks, used parts of endangered animals as
ingredients in their products, an environmental group said in a
report published Monday.
    The London-based Environmental Investigation Agency (EIA)
urged investors in Beijing Tong Ren Tang group  600085.SS ,
Tianjin Pharmaceutical group  600329.SS  and Jilin Aodong
Pharmaceutical Group  000623.SZ  to divest their stakes.
    Beijing Tong Ren Tang and Tianjin Pharmaceutical group did
not respond to Reuters' emails or calls seeking comment. Jilin
Aodong Pharmaceutical Group could not be reached for comment. 
    The three are among 72 firms which non-profit organisation
EIA said used body parts of threatened leopards and pangolins as
ingredients in at least 88 traditional Chinese medicine (TCM)
products.
    The group said it focused on the pharmaceutical companies
because they are publicly listed and display products that
include leopard or pangolin parts on their websites.
    TCM manufacturers often publicly tout the efficacy of such
ingredients and list them on their product packages. 
    "It's particularly disappointing to see so many major banks
and financial institutions effectively endorsing this damaging
exploitation," Avinash Basker, a legal and policy specialist for
EIA, said in a media release.
    "They need to divest from TCM manufacturers using threatened
species at the soonest opportunity." 
    Beijing Tong Ren Tang and Tianjin Pharmaceutical group did
not respond to several emails and calls from Reuters asking for
comment. Jilin Aodong Pharmaceutical Group could not be reached
for comment. 
    EIA said 62 financial institutions have invested in at least
one of the three firms, and include HSBC Holdings  HSBA.L , UBS
 UBSG.S , Deutsche Bank  DBKGn.DE , Citigroup  C.N  and
BlackRock  BLK.N .
    Some investors, including Wells Fargo & Co  WFC.N  said they
had either sold the funds which were invested in the TCM firms
or had sold their shares in the companies, EIA said.
    HSBC Global Asset Management Canada and Royal Bank of Canada
told EIA their investments in the companies were limited to
passive or tracker funds.
    UBS told EIA its shareholdings were held on behalf of
clients.
    EIA said Deutsche Bank, HSBC Holdings, Citigroup and
BlackRock did not respond to its queries.
    Deutsche's asset management arm DWS has no exposure to the
three drugmakers via its actively managed funds, a spokesperson
said, noting it's important to engage with issuers and index
providers to achieve ESG improvements and without clarifying the
bank's holding via passive funds. 
    Citi's holdings largely involve client-related activity
rather than proprietary investment, a source with direct
knowledge of the matter told Reuters. Citi declined to comment.
    BlackRock declined to comment.
    The activist group urged the Chinese government to prohibit
the use of parts of endangered animals for all commercial
purposes in its domestic markets.
    China's National Medical Products Administration did not
respond to a Reuters request for comment.
    China's amended Wildlife Protection law came into effect in
May. It bans trade in most wild animals for consumption as food,
but permits for breeding and use can still be issued in certain
circumstances.

 (Reporting by Andrew Silver in Shanghai and Selena Li in Hong
Kong; editing by Miyoung Kim and Jason Neely)
 ((andrew.silver@thomsonreuters.com;))