Amundi said it warned the State Bank of India it would kick out one of the lender’s green bonds from a flagship fund if it helped finance a coal mine in Australia that met fierce opposition from the from environmental groups. Amundi, which owns the bond in its Amundi Planet Emerging Green One fund, said it learned this week that the State Bank of India is considering financing the Carmichael thermal coal mine in Australia. Carmichael has drawn strong opposition from climate activists because of the potential carbon emissions that would be produced by the mine, at a time when many countries are moving away from coal to help fight global warming.
Under pressure from investors, a series of banks and insurers have already severed ties with the project, the most recent being Lloyd’s Apollo insurer. Jean Jacques Barberis of Amundi, director of the Institutional and Corporate Clients and ESG division, said the asset manager contacted the bank to express his concern and followed up with a letter to management on Thursday .
The Amundi fund – the largest for green bonds in emerging markets – seeks to invest in bonds to finance environmentally friendly projects, but also looks to the issuer to ensure that its other activities are “Consistent”. “We believe that SBI should not fund this project. It’s their decision, in the end, but we’ve been extremely clear that if they decide to do it, we will divest immediately, ”said Barberis.
The financing of the mine would be in “total contradiction” with the activities of the SBI financed by its green bond, he added. “We engaged SBI, asking them not to participate (in the loan)… and now we await their responses. SBI was not immediately available for comment when contacted by Reuters. The news was reported earlier by Environmental Finance.