Ontario Teachers’ reportedly in talks to invest in Indian coal giant behind Australian Carmichael mine
Photo credit: Flickr. #StopAdani
Despite its net-zero commitment, the Ontario Teachers’ Pension Plan is reportedly considering a US$2 billion investment in Adani Enterprises
India’s Economic Times is reporting that the Ontario Teachers’ Pension Plan (OTPP) is in talks with Adani Group and other global asset managers to invest up to US$2 billion in Adani Enterprises. Adani is a giant Indian conglomerate with new coal mines and power stations planned and under construction.
The OTPP declined to comment on the story. Worried that reports are true, climate-concerned teachers are calling on their pension fund to immediately cease talks with Adani and commit not to invest in any company with coal expansion plans.
Investing in Adani would be a major step backward for the OTPP, which committed to achieve net-zero emissions by 2050 and reduce the carbon intensity of its portfolio by two-thirds by 2030. Adani Group derives the majority of its revenue from high carbon assets like coal. Financing any project within the company, even if funding were earmarked only for clean energy projects, could inadvertently support Adani’s fossil fuel expansion efforts. Adani’s ongoing coal projects violate the rights of Indigenous people and should disqualify the group from finance from Canadian pension funds that claim to integrate ESG considerations. Investing in Adani would harm OTPP’s reputation on climate change and responsible investing. We expect that OTPP has the common sense to steer clear of this coal company.
Adani is notorious for its Carmichael thermal coal project in Australia, which citizens and Indigenous groups have been fighting for nearly a decade. If completed, the Carmichael thermal coal mine could become the biggest coal mine in Australia and further industrialise the Great Barrier Reef World Heritage Area. Bloomberg reported this summer that Adani’s claims of being a company in transition away from fossil fuels are hollow. Adani Group’s fossil fuel expansion plans include:
Doubling its coal power generation, from 12 to 24 gigawatts through six new coal power stations and expansions, giving it more coal power capacity than all of Australia;
Adding and enabling an extra 132 million tonnes per annum (mtpa) of new thermal coal mining capacity, including the 60 mtpa Carmichael project;
New coal and fossil gas terminals at Adani ports and Special Economic Zone ports;
A highly polluting coal-to-plastics plant that would use 3.1mtpa of imported coal, including 1mtpa of thermal coal;
In August 2021, Adani purchased another three coal mining blocks and another coal-fired power station in India.
Representatives of the Wangan and Jagalingou Traditional Owners, Indigenous Peoples that lived in northeastern Australia long before British colonization, are demanding an immediate stop to construction of Adani’s Carmichael coal mine, and have never given their free, prior and informed consent to the project. The United Nations Committee on the Elimination of Racial Discrimination requested that the project be suspended because of its potential violation of Indigenous rights. In July, financial advisory firm Glass Lewis warned shareholders that Adani Group has a “severe” risk of material financial impacts driven by ESG factors, and raised concerns about Adani pursuing the “globally unpopular Carmichael Mine”. And in April, Adani Ports was removed from the Dow Jones Sustainability Index over its business ties to the Myanmar military.
Already, over 100 major companies have ruled out working with Adani on Carmichael, including global financial institutions, insurers, engineering and construction firms, and mining companies.
The Economic Times reports that Adani is seeking investment from the OTPP and other asset managers for projects in renewable energy, transportation, fertilizers and other industries. But any funding of an Adani Group entity frees up capital that could be used for coal expansion such as the Carmichael coal terminal in Australia. Adani's most recent annual reports confirmed the conglomerate is propping up its Australian coal operations with massive inter-company loans. The two main Adani Australian subsidiaries responsible for the Carmichael mine and rail project borrowed over AU$4 billion from other Adani Group companies in the last year. AU$1.31 billion of the loans were interest bearing and denominated in US dollars and Euros, suggesting this money came from loans from external lenders that Adani has subsequently directed into the Carmichael Coal Project.
Anyone investing in any Adani company is at risk of funding, either directly or indirectly, Adani’s Carmichael coal mine and rail project. According to the Institute for Energy Economics and Financial Analysis, “practically, the conglomerate [Adani Group] runs as a single group, with Gautam Adani as controlling shareholder and chairman of all six listed companies in the group. They have intercompany loans left right and center. They have intercompany transactions left right and center. They have behind-the-scenes unsecured, undisclosed loans left right and center and they transfer assets willy-nilly just to facilitate the greenwash.”