Just Eat and Carnival reported to FCA over lack of climate risk reporting
Takeaway giant Just Eat and cruise liner Carnival have been reported to the UK’s financial watchdog over failing to report climate change risk to their investors.
Since the beginning of this year, the UK’s listed commercial firms have had to disclose their climate-related risks to investors, according to the Financial Conduct Authority’s (FCA) legal requirements.
In an analysis published earlier this year, environmental law charity ClientEarth – who reported the two firms – outlined the shortcomings of climate-related disclosures by the UK’s largest 250 companies from 2019 to 2020.
“Just Eat and Carnival are not immune to the impacts of climate change,” ClientEarth lawyer Maria Petzsch explained, adding that “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. 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.”
The charity has since asked the FCA to refer both firms for investigation in a bid to close the accountability gap across the environmental aspects of business.
Carbon-ara to go?
ClientEarth claimed Just Eat’s 2020 reporting had no mention of climate change, offered limited commentary on environmental impacts and opportunities like reducing its plastic-heavy food packaging along its supply chain.
The charity added that the food delivery giant risks greenwashing – and consequently misguiding its investors in terms of how resilient to climate change the company is.
However, the takeaway giant hit back at the claim and said it does not recognise ClientEarth’s allegations.
A Just Eat Takeaway.com spokesperson told City A.M.: “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.”
The spokesperson added that the company is currently gathering the data on its global carbon footprint which will be available to investors later this year.
“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 also made no reference to climate change in its Carnival Corporation and Carnival consolidated annual report, the charity said.
While the cruise line operator has made vague statements about climate change in its 2020 strategic report, according to ClientEarth, it does not include any ‘concrete’ analysis on how the warming climate will impact its business model.
When contacted by City PM, the cruise liner refused to comment on the allegations.
“The world’s largest investors are unequivocal that granular and company-specific information about climate change-related risks and impacts is material to their investment and stewardship decision-making,” ClientEarth wrote in a letter to the FCA.
However, the watchdog has dismissed several non-compliance complaints lodged by ClientEarth in recent years, the charity said in a statement.
ClientEarth’s referrals have also put Just Eat and Carnival’s respective auditors, Deloitte and PwC, on notice for failing to address climate risk in their audits of the businesses financial statements.
“If auditors continue to give the stamp of approval to annual reports that ignore the climate risks to investor capital then their trust value will depreciate,” Petzsch added.
“Auditors must take proper account of climate risk transparently, and consistently, for investors to keep faith in the quality of audits. This is the only way investors can determine how to achieve the massive reallocation of capital required to achieve the net zero transition.”