A Scottish oil company has been reported to regulators for allegedly failing to disclose the environmental impact of its exploration work. Cairn Energy, which has its headquarters in Edinburgh, is accused of making “scant reference” to the climate-related risks of its work in its annual report.
It has been referred to the Financial Reporting Council (FRC) – along with Soco International – by ClientEarth, a group of environmental lawyers. ClientEarth said it had asked the FRC to intervene to “correct defective reporting” by the two firms.
Both Cairn Energy and Soco International rejected ClientEarth’s claims. 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 for these companies. “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.”
Cairn Energy currently has operations in the North Sea, as well as projects as far afield as Greenland and Senegal. A company spokesman said: “Cairn Energy plc is a constituent of the FTSE4Good whereby the company is selected and screened in accordance with transparent and defined environmental, social and governance criteria.
“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.
We continually identify corporate responsibility priorities and our 2015 annual report featured climate change in the comprehensive materiality matrix.”
A Soco spokeswoman said: “Soco strongly refutes the allegations made by ClientEarth that it has failed to comply with its legal obligations, and remains confident that the 2015 annual report was prepared in accordance with its obligations under the 2006 Companies Act.”
Source: Scotsman
