Adani Group’s environmental problems have scared away investors
2023.01.30 14:51
Adani Group’s environmental problems have scared away investors
By Ray Johnson
Budrigannews.com – A climate change advocacy group urged major bond investors to avoid India’s Adani Group on Monday, claiming that a critical report written by a short-seller had undermined confidence in the company’s governance.
Last week, allegations of improper use of offshore tax havens and excessive debt were made by the U.S. firm Hindenburg Research, which sparked a sell-off in the Indian group’s stock worth multiple billions of dollars. These were deemed baseless by chairman Gautam Adani, a billionaire and one of the richest people in the world.
In a campaign called “Toxic Bonds,” activist groups said they had written to money managers like BlackRock (NYSE:), (ETR:) Allianz and Pimco to publicly divest their holdings and reject any new investments or credit arrangements with Adani.
The Adani Group, BlackRock, Allianz, and Pimco spokespeople did not immediately respond to inquiries for clarification.
One of Adani’s sources of financing is green bonds, which are used to raise money for specific projects that are thought to be good for the environment.
Nick Haines, the campaign manager for SumOfUs, an investor advocacy group that has signed up for the campaign, wrote in a copy of the letter that was sent to Reuters that Hindenburg’s findings “undermine any confidence investors could have that proceeds from Adani’s planned green issues this year would be adequately ringfenced.”
Coal interests are part of Adani’s empire, which is a major emitter of greenhouse gases. Around 10 million tonnes of coal are produced annually for export at its Carmichael mine in eastern Australia.
It has stated that it will invest more than $50 billion in green hydrogen, a fuel that does not contain carbon and is widely hoped will reduce emissions from heavy industry. However, the risk stated in the letter was that any investment would support high-emitting activity.
In the letter, Haines stated that:
“the interconnected financial nature of the Adani Group makes it clear that buying debt from any subsidiary of Adani is by extension supporting Adani’s mining businesses.”
