Major investment research firm MSCI has announced it will kick out Adani Ports and Special Economic Zone (Adani Ports) from four MSCI climate indexes due to their links to the controversial Adani Group (Adani) Carmichael coal project in Australia.
MSCI is the world's largest provider of environmental, social, and governance (ESG) indexes designed to help investors integrate ESG or climate considerations in their investment process and portfolio. Its climate change indexes exclude companies with “severe” or “very severe” controversy scores.
In an email to campaign group Market Forces, MSCI stated that Adani Ports' decision to set up Bowen Rail Company, the haulage company for the coal mine, had resulted in the project escalating its controversy score to “severe” – prompting the firm to kick it out of all indexes it was part of.
Commenting on MSCI's decision, Market Forces campaigner Pablo Brait said: “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.”
This month, Market Forces also confirmed that major UK insurers RSA Insurance Group (RSA) and Conduit Re (Conduit) joined other insurers in ruling out underwriting for the Adani Carmichael coal mine project.
In an email to the environmental group, RSA explained that its underwriters distanced themselves from the controversial project in line with its Climate Change and Low Carbon Policy. Meanwhile, Conduit chief executive officer Trevor Carvey said in a statement that the company does not insure the coal mine project and “has no intention of doing so in the future.”
Despite many insurers ruling out insurance and underwriting for the Carmichael coal mine, Bravus Mining and Resources, a part of Adani, clarified in a statement sent to Insurance Business that it has the requisite insurance in place for the project, which is almost complete.
It added: “Removing Australian coal from the global seaborne market will only see other jurisdictions with more inferior quality coals and less stringent environmental regulations fill the gap. That means that the jobs and the economic prosperity associated with exporting coal would also be lost to Australia.
“The Adani Group, that Bravus Mining and Resources is a part of, is taking the transition to a lower carbon economy seriously – we are the world's largest multi-national solar power company, and we have aspirations to be the world's largest renewables company. While many businesses are talking about transitioning, we are walking the talk when it comes to taking action on emissions reduction whilst also meeting the growing energy demand within our region.”
