2019-04-30 Lucie Pinson – Les Amis de la Terre
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This is a blog post by Les Amis de la Terre's Lucie Pinson.
“Keep coal in the ground!” In the last few years, this climate activist slogan has become a shared position worldwide, based not on beliefs but on facts. If there is still time to prevent runaway climate change and its disastrous social and economic impacts, several scientific reports have made crystal clear that this requires an immediate end to the construction of new coal mines and plants worldwide and an accelerated phase-out of existing coal infrastructure.
However, at a time when the science could not be clearer on the need to reduce global carbon emissions, and to keep global coal reserves unburned in order to keep global warming below 1.5°C, one company named Adani is desperately clinging to its plans to build one of the world’s largest coal mines in eastern Australia.
Adani Group’s Carmichael coal mine would produce enough coal over its lifetime to emit 4.6 billion tonnes of CO2, equivalent to over eight years of Australia’s annual greenhouse gas emissions. In addition to being a massive climate bomb, the Carmichael project threatens the rights of the traditional owners, the Wangan and Jagalingou people, who do not consent to the mine, as well as threatens the Great Barrier Reef’s diverse ecosystems.
Indeed, the project also consists of an approximately 200 km long rail line that would transport the coal to an export terminal in the Great Barrier Reef World Heritage Area. The resultant dredging and ship traffic threatens irreversible damage to one of the world’s most biodiverse ecosystems, a global treasure that is protected as a World Heritage Site and already under pressure from warming waters and unprecedented coral bleaching events.
To prevent the project from going ahead, campaigners from all over the world have called on financial institutions to take a stand against the destructive mine. And this has worked: 47 international investment banks and insurers, including French BNP Paribas, Crédit Agricole, Société Générale, AXA and SCOR, have ruled out support for part or all of the project. As a result of its incapacity to raise direct bank financing for its project, Adani announced last November its plans to self-finance the entirety of the Carmichael mine and rail line, at an estimated cost of US$1.5 billion in total.
To gather part of the required capital, Adani intends to sell an equity stake in the Abbot Point Coal Export Terminal. And it’s the Anglo-French investment bank Rothschild & Co that is supporting the deal through an advisory mandate to Adani. Therefore today, 16 French and Australian organisations are sending an open letter to Rothschild & Co, calling on the bank to publicly end all support to Adani.
The letter, coordinated by French NGO Friends of the Earth France and Australian NGO Market Forces, also draws attention to the role played by Rothschild & Co in facilitating the transfer of coal assets, including the sale of Uniper’s coal plants in France. This type of support is becoming increasingly controversial as the selling of coal assets often result in delays to the necessary closure of the plants, and therefore delays a socially fair decarbonisation of the economy.
In 2017, the Global Head of Corporate Social Responsibility at BNP Paribas stated in an interview to Novethic that the bank would not support the sale or purchase of coal plants as “The objective is that these coal plants are closed and not sold to companies with lower environmental standards.” This position is shared by other major French banks who have heavily restricted their capacity to carry an advisory mandate for the sale and purchase of coal assets.
To date, Rothschild & Co has benefited from its relatively low public profile. But this time might be over as Rothschild can expect increased scrutiny from NGOs and civil society if the bank fails to catch up on climate.