20 April 2021
Adani Ports and Special Economic Zone (Adani Ports) was dealt a major blow last week when it was removed from S&P’s Dow Jones Sustainability Index after a case was presented to S&P showing Adani Ports’ links to the Myanmar military, thermal coal mining expansion and ecological destruction. The removal comes in the wake of global giant State Street and seven major Scandinavian and Dutch financiers either divesting from or banning/restricting further investment in Adani Ports. The Wall Street Journal and Times of India pointed out that the removal would mean that all of the funds that utilise the renowned Sustainability Index would be dumping their Adani Ports stock held via that index. With Adani Ports’ share price falling 5% on the day the exclusion was announced, the flood of exits from investors should be a cause for concern for the company’s executives.
See the full referenced list of investor exclusions/statements below.
Following the revelation in March 2021 that PIMCO will no longer purchase Adani Ports bonds, and Deutsche Bank’s reported refusal to arrange these bonds on environmental grounds, investment heavyweight State Street has now excluded Adani Ports from two of its ESG funds. The list of financiers either divesting or banning investment has grown to at least 11 major financiers over the last few months and demonstrates investor recognition that Adani Ports’ actions are far from “sustainable”.
Ongoing controversy surrounding Adani Ports’ activities will be raising alarm bells for Adani Group executives who will be keeping a close eye on investor backlash. These exits also serve a warning to Adani’s remaining bankers and investors. As long as Adani Group continues to pursue the Carmichael coal project and maintain links to Myanmar’s military, its investors will need to be wary of serious reputational risk.
Contact Adani Ports’ remaining bankers and investors to share the news and demand that they cut ties with Adani too.
Summary of investor backlash;
- PIMCO banned future investment in Adani Ports bonds and clarified that it did not participate in the January 2021 bond issue, due to links to the Carmichael coal project – March 2021
- Deutsche Bank backed out of participating in an Adani Ports bond issue in January 2021.
- State Street included Adani Ports in its ESG exclusion list. April 2021
- SEB states that it sold its holding in Adani Ports in March 2021 and have since then made no investments in the two companies [with links to Myanmar’s military] (footnote in Fair Finance article)
- Nordea: “Regarding Adani Ports, we will sell that entire holding and we have already sold just over 80 percent” (provided by Fair Finance here on April 1 and linked to in the above article.)
- Swedbank has excluded Adani Ports due to its connection to fossil fuels (reported on April 1 by Fair Finance in footnote 13, page 2).
- SPP’s January 2021 Excluded companies as of Q4 2020 “The following companies are excluded from all SPP Fonder’s funds in agreement with SPP’s sustainability criteria – Serious environmental and climate damage”. List includes Adani Ports and Special Economic Zone.
- Carnegie 2020 Half year report; “An example of a company that has been avoided for environmental reasons is Adani Ports & Special Economic Zone”.
- DNB states that they divested at the end of March.
- Danske Bank set restrictions prohibiting investment in Adani Ports and Adani’s Abbot Point coal port in September 2020 due to the company’s “climate change contribution and harmful environmental practices”.
- NN, March 2021 Exclusion list names Adani Ports for “violations of international standards of business conduct”.