By Janet Pelley
What kind of teachers would educate their students about the dangers of climate catastrophe while investing their pension savings in one of the biggest carbon polluters in the world? That is the moral dilemma faced by many participants of pension giant TIAA. The university educators pension fund is the world’s second-largest holder of coal bonds in the Adani Group, headed by one of the world’s worst carbon criminals, according to Oxfam.
While TIAA’s investment in the India-based Adani Group has no moral or environmental merit, it appears to be financially risky as well. A few weeks after Hindenburg Research reported in January 2023 that the coal-drenched Adani Group has “pulled the largest con in corporate history,” the conglomerate’s value plunged by more than $100 billion.
Hindenburg Research, named after 1930s dirigible that exploded due to human hubris, is a New York investment firm known as a “short” seller. The firm investigates and reports on financial misdeeds such as fraud by companies traded on the stock market. Hindenburg Research makes money by placing “short bets” that an unethical company’s stock value will fall after Hindenburg releases an explosive report on the company’s dodgy practices.
The two-year investigation of the Adani Group by Hindenburg Research revealed that the conglomerate has engaged in brazen stock manipulation, accounting fraud schemes, and money laundering. Adani’s seven key listed companies are over-valued and have taken on substantial debt, the report says. This bad news triggered a massive sell-off of Adani’s shares and bonds, causing the group to lose nearly half the value it held in 2022.
In the wake of the Hindenburg Research report, the Toxic Bonds initiative, a non-profit climate advocate, wrote to TIAA and other major investors, asking them to stop investing in Adani until the company adopts an emissions plan in line with limiting global warming to 1.5°C. As more investors sell their Adani shares, Toxic Bonds has not heard back from TIAA as of April 2023. Nor has TIAA responded to a letter from TIAA Divest! urging divestment . TIAA’s continuing exposure to the shaky Adani empire should be of great financial concern to TIAA participants.
TIAA participants should also be alarmed on existential grounds that TIAA ever invested in Adani in the first place. Adani Group is the world’s largest coal operator, with plans for new coal mines and coal-fired power plants in Australia and India. Fossil fuels, led by coal, are the largest driver of climate change, contributing 75% of greenhouse gas emissions. Therefore UN Secretary General António Guterres has called for halting all new fossil fuel exploration and phasing out coal power by 2030 for members of the OECD, and by 2040 for all other countries, in order to avert climate catastrophe. Amid these urgent warnings, to invest in a company like Adani is illogical, amounting to collective suicide.
While many TIAA participants don’t know about the fund’s investments in fossil fuels, a growing number are aware and have expressed their displeasure to key administrators of the fund. TIAA claims that “managing climate risk is critical to delivering returns.” But if the fund’s managers were sincere, they wouldn’t be enabling Adani Group to wreck the climate and TIAA’s returns. If you are concerned that your pension dollars are funding the destruction of your children’s and grandchildren’s world, click here to join the hundreds of academics who have let TIAA administrators know that these insane investments are unacceptable. Your pen—or keyboard–is more powerful than you think.