Green activists have protested at the annual meeting of a prominent Edinburgh investment company over its alleged role in funding the climate crisis.
Campaigners from the group Toxic Bonds distributed leaflets to attendees of asset manager Abrdn’s AGM at Assembly Rooms in Scotland’s capital, and sang songs criticising the firm for its continued investment in fossil fuel companies.
The group claimed that Abrdn – known as Standard Life Aberdeen until 2021 – is “taking advantage” of the global bond market to fund “coal, oil and gas expansion” around the world. It also called on the company to protect its “long term investments” by excluding future funding for “risky coal developers” like the embattled Indian conglomerate, Adani.
Abrdn said it is a “responsible investor” which manages £37bn in sustainable assets and is “committed to driving the change required” to meet climate targets.
In February, The Ferret revealed that Abrdn is a major investor in bonds issued by Adani, which is the world’s largest private developer of coal. In March 2022 we found Abrdn had bought shares and bonds worth over £2bn in North Sea oil firms in the five years after the Paris Agreement – aimed at limiting climate change to safe levels – was signed in 2015.
Bonds are a form of debt issued by companies seeking additional money for their activities or to fund new projects. Investors – like Abrdn – buy this debt and are paid interest by the company as well as the value of the initial bond at the end of an agreed period.
According to Toxic Bonds, the bond market has emerged as a “back door” for oil, gas and coal companies to fund expansion projects, as other lenders such as banks tighten their rules on lending to the sector.
Coal companies are particularly reliant on accessing money through the bond markets and now raise two and a half times as much money through bonds as bank loans.
According to financial market research conducted by the German environmental organisation, Urgewald, Abrdn holds £920m worth of bonds issued by companies who are growing their fossil fuel operations. The company has bought bonds issued by major polluters including Shell, BP, and ExxonMobil.
The coordinator of the Toxic Bonds Network, Alice Delemare Tangpuori said Abrdn’s investments in companies like Adani are “inexcusable and begs the question of whether Abrdn is exercising its due diligence and performing in its investors and clients best interest”.
“Abrdn is taking advantage of the bond market to fund coal, oil and gas expansion,” Tangpuori argued.
An Abrdn spokesperson said: “As a responsible investor managing assets on behalf of many clients with different mandates and investment objectives, we believe it is important for asset managers to assess whether it is appropriate to impose targets and restrictions where they have not been mandated by the client.
“However, we do offer a variety of funds and investments for clients who wish to invest in line with specific sustainable criteria. We currently manage £37bn in sustainable assets.
“We will work with companies to encourage best practice and measure their transition to net zero.
“Where clients mandate, we can mitigate our exposure to coal and fossil fuels.”
Cover image thanks to Duncan McGlynn.