“Severe” controversy - Adani Ports’ Carmichael coal link sees it dumped from financial indexes
Major US investment research firm MSCI has announced to its clients that Adani Ports and Special Economic Zone (Adani Ports) will be kicked off four MSCI climate indexes, after its links to the Carmichael thermal coal project in Australia escalated its controversy score to “severe” (see this email from MSCI to Market Forces).
MSCI informed Market Forces that Adani Ports’ setting up of Bowen Rail Company, the haulage company for the Carmichael coal mine, had resulted in the Carmichael coal project being added as a controversy with which Adani Ports is associated.
A second email from MSCI to Market Forces confirming this is available to download here. MSCI has confirmed that this means Adani Ports will be removed from all Climate Change indexes it is currently a part of. These indexes exclude companies with “severe” or “very severe” controversy scores.
This is not the first time Adani Ports has been removed from an ESG index, with S&P removing it from the Dow Jones Sustainability Index in April 2021, due to its business links with the Myanmar Military and State Street excluding it and Adani Enterprises from some MSCI produced ESG indices it uses. Earlier this month Bank of New York Mellon cut ties with Adani in Australia.
MSCI is the world’s largest provider of Environmental, Social and Governance (ESG) Indexes which are designed to help investors integrate ESG or climate considerations in their investment process and portfolio.
Adani is preparing to export its first coal from the Carmichael mine in the coming weeks, roughly 8 years behind schedule. Last week a “test” train laden with Carmichael coal broke down on its way to the port.
Quotes attributable to Pablo Brait, campaigner with Market Forces:
“It is encouraging to see an Adani Group company being held accountable for its work supporting a massive new thermal coal mine. However, the entire Adani Group must be held responsible by financiers and ratings agencies for this climate-wrecking project. The Adani Group exploits its complex structure to enable some parts to, for example, join the Science-based Targets Initiative and set carbon neutrality goals, while other parts build new coal power stations and coal mines.
“The Bowen Rail Company is a clear case in point. Adani Ports set it up, and then admitted [see page 129] that in order to ‘fulfill its carbon neutral commitments’ it transferred ownership to Adani Enterprises. Meanwhile the disastrous Carmichael coal project continues unchanged. MSCI’s linking of Adani Ports to Carmichael has helped expose this farce, but many others are still avoiding the reality that financing one part of the Adani Group risks freeing up funds, either directly or indirectly, for Carmichael and other new thermal coal projects.
“BlackRock, Barclays, Deutsche Bank and JP Morgan have all publicly distanced themselves from the Carmichael coal project but continue to finance Adani Group companies. If they are genuine about wanting to avoid any chance of supporting Carmichael in the midst of the climate crisis they must cut all ties with the Adani Group now.”
Further background on Adani Group and new fossil fuels projects
Research released by Market Forces in July 2021 proves that the Adani Group is not a conglomerate transitioning to clean energy, but is expanding in all directions, including fossil fuels. These fossil fuel expansion plans include:
Doubling its coal-fired power capacity by 12 gigawatts (GW) via the construction of four new coal-burning power stations and at the expansion of at least two existing plants.
Owning, developing or operating 132 million tonnes per annum (mtpa) of new thermal coal mining capacity, including the massive 60 mtpa Carmichael project in Australia, which would pave the way for more massive coal mines in the untapped Galilee Basin.
New coal and LNG terminals at Adani Ports and Special Economic Zone’s ports.
An obscure and highly polluting facility that would convert coal, including imported thermal coal, into plastics.