French giant Amundi has warned the State Bank of India (SBI) that it would sell its SBI green bonds if the bank grants Rs 5,000 crore loan to Adani's Carmichael coal mine in Australia. The project has evoked sharp criticism from environmental groups and locals, who have claimed that the mine would produce 200 million tonnes of carbon dioxide during its 60-year life.
The French asset management company, which holds the bond in its Amundi Planet Emerging Green One fund, said that it has learnt that SBI was considering financing the Carmichael thermal coal mine in Australia.
Under pressure from investors, a string of banks and insurers have already cut ties to the project, with the most recent being Lloyd's insurer Apollo, Reuters reported.
Amundi's Jean Jacques Barberis, director of the institutional and corporate clients division & ESG, said the asset manager had contacted the bank to voice its concern and followed up with a letter to the management on November 26.
The Amundi fund -- the largest aimed at green bonds in the emerging markets -- looks to invest in bonds that help fund environmentally friendly projects, but also looks at the issuer to make sure its other activities are "coherent".
"We consider SBI should not finance this project. It's their decision, ultimately, but we've been extremely clear on the fact that, if they decide to do it, we would immediately disinvest," Barberis said, as per the Reuters report.
Financing the mine would be in "total contradiction" to the SBI activities financed through its green bond, he added. "We have engaged SBI, asking them not to participate (in the loan)… and now we are waiting for their answers."
SBI was not immediately available to comment when contacted by Reuters.
Carmichael has drawn strong opposition from climate campaigners over the potential carbon emissions that would be produced by the mine, at a time when many countries are exiting coal to help fight global warming.
Amundi is Europe's largest asset manager and ranks in the top 10 globally. It manages assets worth 1,650 billion euros.