Aviva, one of the largest investors on the London market, has criticised what it says is miner Vedanta Resources' lack of focus on social issues and slow progress, which it warned was holding back the shares.
A small but vocal shareholder in FTSE 100 miner Vedanta, Aviva said a significant proportion of a 29% underperformance relative to its peers since the start 2010 was due to its lack of focus on sustainability issues, including the environment and human rights.
We do not believe that the non-executive directors are providing sufficiently robust independent challenges to the board, Stephanie Maier, head of corporate responsibility at Aviva Investors said, in a rare public intervention from a high-profile institutional investor.
In particular we are disappointed to find another director appointed without a credible track record in mining or sustainability issues, she said.
Vedantas recent non-executive board appointments include Deepak Parekh, chairman of Indian mortgage lender HDFC and, last year, lawyer Geoffrey Green.
Vedanta has frequently faced accusations from investors and campaigners that it has breached health and environmental rules. Pressure groups have grabbed headlines with a campaign to oppose a bauxite mine in the eastern Indian state of Odisha, planned for an area considered sacred by local people.
Vedanta, which has in the past said it is committed to every environmental standard, appointed a sustainability chief at the end of 2010, in answer to some of these accusations. But it has continued to face criticism and its Tuticorin smelter, Indias largest, was shut for over two months earlier this year after complaints from residents over emissions. The miner had no immediate comment on Thursday.