The world’s 3rd biggest developer of new coal power, Adani Group, has been subject to serious controversy in recent months. Its stock price fell dramatically after a report by short-selling research company Hindenburg was published that accused the multinational conglomerate of fraud, corruption, stock manipulation and money laundering, described as the “largest con in corporate history”.
An Adani Group subsidiary, Adani Green Energy (AGE) had received much admiration prior to the controversial allegations. AGE had been presenting itself as completely separate from the new coal business, so successfully that it raised billions of dollars, including a $750m, three-year green bond.
The epicentre of the backlash directed as Adani Group can be found at the Carmichael coal mine project in Australia. It turns out that the company had been using AGE stock as collateral on a loan against the coal mine. This proved the suspicion that AGE and Adani Group were not operating independently as they had claimed.
As a result the Science Based Targets initiative (SBTi) expelled three Adani subsidiaries, including Adani Green Energy. The SBTi has also removed a number of companies previously included, due to a change in policy that excludes companies with any direct fossil fuel involvement.
A recent Climate Energy Finance report claimed Adani is, “investing far more in new fossil fuel projects than in zero emissions alternatives”, and “undermining its ESG claims to be the green energy champion of India”.
This isn’t the first time Adani has received backlash for its coal operations. In 2021, BNY Mellon cut ties with the group citing that it was “not aligned with ESG principles”. This came after the Financial Times reported that the bank was planning on funding the Carmichael mine. A year earlier three insurers also left the project.
As far back as 2018, protests were taking place in response to the Carmichael mine. Australians feel so strongly that they set up the “#stopadani” group to campaign against it.
In 2022, Australia committed to reduce its GHG emissions to 43% below 2005 levels by 2030. This is a comparatively modest target alongside several countries looking to reach net-zero by the same year. That said, Australia’s target may be more realistic. According to the Climate Action Tracker, the country is rated “insufficient”.
The question is, is there any place for new coal anymore? When countries all over the world are making commitments to reduce their fossil fuel emissions, how can they expect to meet these commitments whilst building new coal mines? The divisive debate was demonstrated at COP26 when the wording relating to coal was changed from “phase out” to “phase down” at the last minute.
Adani Group’s “largest con in corporate history” has begun to catch up with it. The Carmichael coal mine has appeared somewhat doomed from the start. Now 7 years behind schedule and ruled out by 100 companies, are the controversies over?
