Oil and gas firm denies climate change criticism

Cairn says it complies with reporting standards

Scottish oil and gas explorer Cairn Energy has denied a charge of failing to tell investors enough about the risk that climate change poses to their business.

Environmental law firm Client Earth has written to the Financial Reporting Council asserting that climate change poses significant physical and financial threats to oil and gas companies.

The law firm believes the threats amount to a material risk that should be disclosed to investors under UK company law provisions about “principal risks and uncertainties”.

Client Earth alleged Cairn was one of two firms that did not do this sufficiently in their latest annual reports.

Cairn Energy said it is a constituent of the FTSE4Good, an index designed to measure the performance of companies demonstrating strong environmental, social and governance practices.

The index is designed to identify companies with recognised corporate responsibility practices.

“Corporate responsibility is key to our business and we take our commitments to responsible and transparent reporting very seriously and have been recognised for the quality of our work in this area,” the firm said.

“We continually identify corporate responsibility priorities and our 2015 annual report featured climate change in the comprehensive materiality matrix.”

Last week Cairn Energy reported a loss after tax of $38 million in the six months to June 30, a big improvement on the $230m loss of a year previous.

In the six-month period it completed four successful appraisal wells off Senegal and a dual target exploration well in the Greater Catcher Area of the North Sea.