Cairn Energy under fire

An environmental law firm has reported Cairn Energy to the UK financial regulator, accusing the Edinburgh-based firm of “defective” reporting.

ClientEarth wrote to the Financial Reporting Council (FRC) to accuse Cairn of failing to adequately disclose climate change risks to its investors.

ClientEarth levelled the same allegation against Soco International, another UK oil and gas exploration and development company.

Cairn and Soco have both denied the claims. Cairn said it took its commitment to transparent reporting very seriously.

ClientEarth said “scant reference” had been made to climate-related risks in Cairn’s annual reports, meaning investors were not fully informed of risks to the business.

ClientEarth lawyer Alice Garton said: “For companies operating in this sector – with business models and strategies which rely on the continued use of hydrocarbons – it is inconceivable that climate risk is not a material and significant factor.

“Failing to adequately disclose climate risk is failing to mention one of the most important risks facing the company and means the annual report is only telling the positive side of the story.

“This information is vital for investors. Without it they simply cannot make a fully informed investment decision.”