BNY Mellon has cut ties with one of the world’s most controversial coal mines, after Financial Times reporting revealed the bank’s Australian subsidiary was preparing to help with the financing of the Carmichael project in Queensland.
The US investment bank issued a statement on Friday saying that it had reviewed its relationship with Adani Group, the Indian conglomerate that is developing the Carmichael mine, and had “decided to resign from all legacy transactions with Adani in Australia”. The bank added it would not pursue future transactions with Adani in Australia.
Adani has struggled to attract funding from banks for the Carmichael coal mine, which is expected to produce about 10m tonnes of coal a year and has sparked protests around the world.
Earlier this year a contractor on Carmichael said it has failed to obtain insurance for the project due to environmental concerns.
An FT investigation into bank financing of fossil fuel projects this week revealed that BNY’s Australian subsidiary, BTA Institutional Services, was preparing to work with Adani on the Carmichael project.
At the same time, the bank was in talks to join former Bank of England governor Mark Carney’s net zero climate initiative, which was heavily promoted at this week’s COP26 climate talks in Glasgow.
Emails and documents seen by the FT describe BTA as the “financier” on the project and “the party lending money to Adani”. BNY responded that while contracts had been prepared citing BTA’s involvement, they were not signed.
It also said that it was not funding the project but it did provide “administrative services” to Adani in Australia, including acting as a security trustee.
“BNY Mellon has determined this business is not aligned with our ESG principles,” the bank said in a statement announcing its decision to cut ties.
The bank added that it would continue to honour its contractual obligations while the transactions were unwound and until its role was terminated. It did not disclose what other services it offered to Adani outside Australia.
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here
Credit: Source link