With environmental, social and governance (ESG) risk evaluation gaining prominence in global financial markets, pressure is mounting on the Adani Group to slowly distance itself from coal, a commodity that launched the meteoric rise of Gautam Adani into an infrastructure conglomerate.
Ironically, the Group’s coal exposure has now become a key challenge undermining its unstoppable march.
As India accelerates transition away from coal and towards renewable energy, Adani’s plan to step away from coal once the power purchase agreements (PPAs) for his thermal power plants end, is slowly starting to take shape.
Some recent developments bolster this view.
Carmichael coal mine project
After a decade of growing global campaign to ensure no financial institution is involved in the Carmichael thermal coal mine and rail development plan, the Adani Group confirmed it was unable to secure investor interest, and so had to resort to ‘self-financing’.
In September, it was revealed that Adani Ports and SEZ Ltd, the Group’s port unit, has agreed to set up a new Australian subsidiary to undertake rail haulage for the Carmichael project.
Branded the ‘Bowen Rail Company’, the new entity has no reference to its parent company, a clear indication of the brand damage the Carmichael proposal has inflicted on the wider Adani Group.