Coal Carmichael Mine Indigenous People India Adani Ports Finance
‘Severe controversy’ – certifying body dumps Adani Ports due to coal link
Nov 29, 2021
'Severe controversy' : Confrontation between the W&J indigenous people and police at Adani's Carmichael coal site in August 2020.

The Adani Group’s flagship company, Adani Ports, has been dumped from several indices that measure a corporation’s sustainability. The world’s largest provider of such services has judged that Adani Ports is embroiled in ‘severe controversy’ due to its physical and corporate links with Adani’s notorious Carmichael coal project. Climate campaigners have called for the entire Adani Group to be struck off such indices due to its inextricable involvement with expansion of the coal industry in India and Australia.

In a media release, the campaign organisation Market Forces announced the dumping of Adani Ports:

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 score to ‘severe controversy’.

Flooding of the rail link between Adani's Carmichael mine and Abbot Point in February 2021. Adani Ports owns the rail link, deemed a 'severe controversy' by MSCI research.

MSCI is the world’s largest provider of Environmental, Social and Governance (ESG) indices which are designed to help investors integrate ESG or climate considerations into their portfolios.

MSCI informed Market Forces that Adani Ports’ setting up of Bowen Rail Company, which will haul the coal extracted from the Carmichael mine, has resulted in Adani Ports being judged part of the ‘controversy’ associated with the notorious Carmichael coal project.

A second email from MSCI to Market Forces confirmed the dumping of Adani Ports, meaning that Adani Ports will be removed from all Climate Change indices in which it is involved. These indices exclude companies with scores indicating controversies deemed to be ‘severe’ or ‘very severe’.

MSCI told clients the four indices are:

  • 726305 – EM (EMERGING MARKETS) CLIMATE CHANGE
  • 726314 – AC ASIA PACIFIC CLIMATE CHANGE
  • 726316 – ACWI CLIMATE CHANGE
  • 734327 – ACWI IMI CLIMATE CHANGE

This is not the first time Adani Ports has been removed from an ESG index. Standard and Poor’s removed the company from the Dow Jones Sustainability Index in April 2021 due to its business links with the brutal Myanmar military. In addition, State Street excluded Adani Ports and Adani Enterprises from some MSCI-produced ESG indices it uses.

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Adani is preparing to export its first coal from the Carmichael mine in coming weeks, eight years behind schedule. The week before last, a ‘test’ train laden with Carmichael coal broke down on its way to the port.

‘It is encouraging to see an Adani Group company being held accountable for its work supporting a massive new thermal coal mine,’ said Pablo Brait, campaigner with Market Forces. ‘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 Adani Group exploits its complex structure, enabling some Adani entities to be deemed 'sustainable' while others pursue new coal mines and coal-power stations.

‘The Bowen Rail Company is a clear case in point. Adani Ports set it up, and then admitted (see page 129 of the link) that 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.’

The Adani Group expressed disappointment with the move, claiming that Adani Ports had divested itself of the Bowen Rail Company. Adani Ports understands that the company is now owned by Adani Enterprises, obviously another entity within the Adani Group. The status of NQXT is being clarified.

AdaniWatch has regularly reported on the Adani Group’s plans to massively expand exploitation of coal in India.

Such coal projects have a destructive impact on indigenous communities, farms and forests. Examples include proposed new coal mines in the Hasdeo forests and at Gondulpara (sic), and the coal-power projects at Godda and Pench.

Protesters, some having suffered alleged assaults from 'pro-Adani goons', march against Adani's proposed Pench coal-power plant in central India.

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 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 coal-mining capacity, including the massive 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 facilities run by Adani Ports.
  • An obscure and highly polluting facility that would convert coal, including imported thermal coal, into plastics.