SINGAPORE (BLOOMBERG) - Semiconductor Manufacturing International Corp (SMIC) has been added to two Hong Kong indexes focused on environmental, social and governance (ESG) risks, 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 late on Wednesday (May 25). The change will come into effect on June 13.

Shares rose as much as 1.3 per cent 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 United States is now said to be considering tougher sanctions on the firm. The company was recently included in Hong Kong's benchmark Hang Seng Index.

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 did not immediately respond to a request for comment. A spokesman for Morningstar, which owns Sustainalytics, declined to comment.

Orient Overseas International, Zhongsheng Group Holdings and CK Infrastructure Holdings will also join the ESG gauges, while AAC Technologies Holdings has been removed.