MSCI to drop Adani Ports from climate indices for links with Carmichael project

MSCI — a leading provider of research-based indexes and analytics - has announced that it will drop Adani Ports and Special Economic Zone (APSEZ) from its four climate indices following its link with the Carmichael thermal coal project in Australia. MSCI will also drop REC and IPCA Laboratories from the index and six new companies will make it to the list, a media report stated.

The six companies that have been added to the list are Bharat Electronics, Godrej Properties, Mphasis, SBI Cards and Payments, SRF, and Tata Power and Company, as per a Fortune India report.

According to an MSCI spokesperson, as per the report, the ESG Controversy Assessment was revised for Adani Ports in September this year and, as a result, the company does not meet the eligibility criteria for the index. Adani Ports will be removed from these indices effective December 1, 2021.

The four indices are EM (Emerging Markets) Climate Change, Asia Pacific Climate Change, ACWI Climate Change, and ACWI IMI Climate Change.

The MSCI said that the Carmichael coal project was added as a 'controversy 'after the setting up of Bowen Rail Company (BRC)  and as Adani Ports is associated with the project, the action was taken as their criteria mandates excluding companies with "severe" or "very severe" controversy scores.

The Carmichael project is owned by Adani Enterprises (AEL). In August 2020, Adani Ports had set up BRC as a wholly-owned subsidiary for haulage operations from the Carmichael mine to Adani's North Queensland Export Terminal (NQXT). In order to meet its carbon neutral commitment, Adani Ports had transferred the ownership of BRC to Adani Global Pte, a subsidiary of AEL, in March 2021. However, MSCI continues to link Adani Ports to the Carmichael project.