After AXA, Amundi dumps Indian bank SBI’s green bonds over coal financing
Amundi confirmed to Asset News that they have divested green bond holdings from State Bank of India (SBI), the country’s largest bank majority-owned by the government, from its Amundi Planet Emerging Green One fund. The €1.5bn fund, which invests in debt securities and instruments in emerging markets, held about $20m (as of September 2020) of SBI green bond allocation, which has since been sold.
In November, shareholders raised concerns over SBI’s proposed loan of 50bn rupees (€560m) to Adani Enterprises Ltd (renamed as Bravus Mining and Resources) to fund the controversial Carmichael coal mine in Queensland, Australia. At the end of November, Amundi had written to the Indian bank, threatening to sell its holdings, “if SBI does not reverse this decision”, Asset News had reported.
Following the engagement with SBI, the portfolio managers of the fund have fully divested from the company’s green bond holding, said a spokesperson for Amundi. This move is in line with the fund’s ESG charter and the French asset manager’s commitment to promote integrity and environmental additionality of the green bond markets. “This charter requires to assess in any investment case, the green bond issuance according to both, green bond-level analysis and the issuer-level analysis. Green bond holdings are then monitored to ensure no direct or indirect exposure to environmentally high-risk and carbon intensive sectors,” the spokesperson told Asset News.
The heat on SBI has been growing, with global investors such as BlackRock and Storebrand pressurising the public bank to stop its plans to fund the disputed Carmichael coal mine, due to ESG risks. Recently, another French asset manager – AXA IM – had divested its green bond holdings by SBI, citing the bank’s potential involvement in the controversial coal project as a reason for divestment.