UK Financial Regulator Sued Over Oil Firm’s Climate Disclosures

An environmental law charity is suing the UK’s Financial Conduct Authority (FCA), alleging that the financial regulator accepted last year the listing prospectus of North Sea oil and gas operator Ithaca Energy despite the document failing to fully disclose climate change risks.

ClientEarth, which sued Shell’s directors last week, is now targeting the UK’s financial watchdog with a lawsuit in the UK High Court, the Financial Times reported on Thursday.  

The environmental law charity claims that the FCA failed in its duty to protect investors by signing off on the listing documents, which, ClientEarth says, were too general in the climate risk disclosures department.

Ithaca Energy applied to and was listed on the London Stock Exchange at the end of last year. Ithaca Energy holds stakes in 28 producing oil and gas fields on the UK Continental Shelf (UKCS) and has stakes in six of the ten largest producing fields offshore the UK. Ithaca Energy also holds a 70% operated interest in the Cambo oil field.

Environmentalists want the UK to stop the development of the Cambo field, as well as the development of Rosebank, where Ithaca Energy has 20% in the Equinor-operated field. 

“In the case of Ithaca’s listing, we believe the regulator has failed when it comes to this fundamental function by ultimately waving through Ithaca’s prospectus even though legal requirements have not been met,” Robert Clarke, ClientEarth accountable finance lawyer, told FT.  

ClientEarth grabbed headlines last week after filing a world-first lawsuit against the Board of Directors of Shell plc for “failing to manage the material and foreseeable risks posed to the company by climate change.”

“The lawsuit alleges Shell’s 11 directors have breached their legal duties under the Companies Act by failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement,” ClientEarth said.

The High Court has yet to accept both lawsuits by ClientEarth and potentially decide whether to allow the cases to go ahead.    

By Tsvetana Paraskova for Oilprice.com

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