In this report, we review intensified coal mine engagements, Myanmar coup sanctions, potentially misleading carbon disclosure, and resistance to syndicate new bonds from climate cognisant banks as factors to take into consideration for Adani Ports (ADSEZ) bond investors.
ADSEZ is fully integrated into the coal value chain of the Adani Group, making investments in the company’s bonds and equities a sensitive exercise for investors with investment restrictions on new coal mines and power plants.
We update our view on this issue, covering four main topics: coal, coup, Carbon Disclosure Project (CDP) and credit. In terms of coal, ADSEZ has clarified its integral participation in the Carmichael coal mine development project together with Adani Group. ADSEZ has recently landed in controversy around plans to expand coal logistics around Murmago Port, threatening environmental values in tourist destination Goa.
Regarding the coup issue, Justice for Myanmar has recently listed ADSEZ as a significant business associate of the military junta that has taken control over the country. JfM has put ADSEZ on a proposed sanction list for its involvements. With regards to CPD, we believe the ADSEZ contributions to the CDP database are not fully showing the company’s engagements in coal.
Finally, credit: as a sign of environmental controversy around ADSEZ, it has been reported that Deutsche Bank decided to not syndicate the ADSEZ $3.1 02/31 bonds; the bond prospectus pushed by other parties failed to disclose any relationship to “the world’s most insane energy project” – the Carmichael coal mine.
Dr Ulf Erlandsson founded the Anthropocene Fixed Income Institute and was its first CEO. A pioneer of climate-focused fixed income portfolio management, he was named Environmental Finance’s Bond Personality of the Year 2022.
