The Financial Conduct Authority trial

The international environmental organisation ClientEarth has sued the UK's Financial Conduct Authority (FCA) in a London court for approving documents without regard to climate risks. This was reported by the Financial Times newspaper.

According to ClientEarth's lawyer, the case concerns the FCA's acceptance of the prospectus of oil and gas company Ithaca Energy's IPO. In Ithaca Energy's documents, information about the risks to oil and gas companies due to climate change is too general, the lawyer said. Thus the regulator failed, he said, to "protect investors", even though it was intended to ensure the company provided comprehensive data during the listing process.

According to the FCA statement, the authority intends to challenge the claim made by the eco-activists. For its part, Ithaca Energy, which listed on the London Stock Exchange in November 2022, said it had taken note of the regulator's response, declining to comment further.

Prior to the listing, Ithaca ClientEarth had twice asked the FCA to raise concerns about inadequate disclosure of climate-related risks in Ithaca's prospectus.

Although Ithaca's final prospectus contained some additional information about the climate risks associated with its operations and the FCA proceeded to approve the prospectus, ClientEarth's lawyers say the additions were not sufficient to meet the regulatory requirements of the prospectus or to make approval legal.

Last week, ClientEarth sued the board of oil and gas company Shell over its "not ambitious enough" carbon reduction strategy.