Investors, lenders and data providers can learn big lessons from the case of Adani Power, says Ulf Erlandsson, a former bond trader at Swedish pension fund AP4. In a recent white paper, he delves into how India’s largest listed coal utility managed to bag a sky-high ESG score and was included in a major emerging markets ESG index.
But this is not a story about how coal companies can get it right - it’s one about how the ESG industry can get it wrong.
In the paper – one of the first research pieces out of the newly-launched Anthropocene Fixed Income Institute – Erlandsson states that, in his view, Adani Power, with a coal-based generation capacity of 99.7%, is a better candidate for exclusion than “for best-in-class ESG inclusion”.
Instead, an ESG data aggregator has ranked Adani Power in the 94th percentile - well ahead of companies like Danish renewables giant Orsted (considered the most sustainable company in the world by some others), w…