Lawyers press for investigation into lack of climate disclosure from Just Eat and Carnival
Environmental lawyers ClientEarth are urging the UK's Financial Conduct Authority (FCA) to punish cruise operator Carnival and food delivery platform Just Eat for failing to disclose climate-related information.
The law firm this week sent referrals for both companies to the regulator, claiming that the corporations’ “failure to be clear with shareholders about the climate-related risks they are exposed to breaches their legal obligations”.
ClientEarth alleges that neither company is publishing adequate information on how it will decarbonise its own operations and value chain, or how climate-related risks will impact its business. The law firm’s claims relate to 2020 annual reports from both Just Eat and Carnival.
Just Eat’s 2020 reporting, ClientEarth claims, makes no direct reference to climate change and provides “limited commentary” on environmental impacts, risks and opportunities. ClientEarth is particularly concerned about an apparent lack of alignment of corporate strategy with the Paris Agreement. A JustEat spokesperson told edie that the company does not recognise ClientEarth’s allegations.
The spokesperson said: “We have disclosed all information that we considered material up until 31 December 2020 in our Annual Report and we continue to adequately inform the market about all material information as needed.
“We are committed to reducing our carbon footprint and providing accurate information to our key stakeholders. Following the merger of Just Eat and Takeaway.com last year, one of our priorities has been to carry out a global carbon footprint analysis to determine an accurate measurement of our direct and indirect carbon emissions and those associated with the food sold and deliveries carried out through our combined platform. This is currently in progress and once we have an accurate measurement in relation to the analysis, we will be setting reduction targets and reporting these over the coming months.”
Carnival Corporation and the Carnival plc consolidated annual report 2020 made no direct reference to climate change, ClientEarth claims, again alleging that statements on the impact of climate change on the firm’s business model were “vague”. ClientEarth also claims that technologies including natural gas are presented to investors with no information about negative environmental impacts.
edie has contacted Carnival for comment.
ClientEarth’s climate lawyer Maria Petzsch said:” As market leaders in highly exposed sectors, Just Eat and Carnival are in a strong position to lead by example and tackle climate risk head-on – but they have to get their act together.”
“Just Eat and Carnival are not immune to the impacts of climate change. Recent global efforts to phase out fossil fuels and single-use plastics, shifts in consumer behaviour, and abrupt changes to regulatory and business environments all present very real challenges to their financial and operational health. These impacts are material to investors, who expect to be given the full picture.”
In contacting the FCA, ClientEarth is calling for the regulator to launch an investigation and to penalise both Carnival and Just Eat to an extent it would deem adequate. ClientEarth has used its letter, send accompanying the referrals, to argue that the FCA itself is “risking its own integrity as a regulator” for “continually” failing to identify breaches in reporting requirements.
ClientEarth has been keen to emphasise that Carnival and Just Eat are not the only two large businesses that need to disclose more climate information, calling reporting failures on climate across the UK’s private sector “endemic”.
Research published by the law firm this February revealed that 90% of UK corporations made no reference to climate change and related factors in their financial accounts and audit reports. The research, which covered all FTSE 100 firms and the largest 150 FTSE 250 firms, also found that less than 25% of the businesses reference the impact that the climate crisis will have on future and current business models.
Without proper disclosures, ClientEarth argues, investors and other actors will not be equipped to redirect financial flows at the scale and pace needed to avoid the worst impacts of the climate crisis.
The UK Government is planning to require all publicly listed UK companies with a premium listing to “comply or explain” with the reporting requirements of the Task Force on Climate-related Financial Disclosures (TCFD) from 2023. Rules will then be tightened and extended further in 2025, subject to consultation.