Just Eat and Carnival face legal complaint over climate failings

ClientEarth has filed a complaint against Just Eat and Carnival over climate failings. 

According to the environmental law charity, the two UK listed companies have failed to report on climate change risk to their investors, in breach of their legal requirements. 

Both the food delivery platform and the travel company say they are taking steps to lower their environmental footprint.

However, analysis by ClientEarth lawyers revealed that of the 250 largest UK companies Just Eat and Carnival were among the worst offenders in this year’s reporting.

ClientEarth argues that both companies’ reporting failures are a breach of their legal requirements under UK company law to disclose material risk to investors.

The lawyers have asked the Financial Conduct Authority (FCA) to refer both firms for investigation and finally close the accountability gap across the sectors it regulates.

ClientEarth lawyer Maria Petzsch said: ‘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. 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.’

In a letter to the regulator sent today alongside the referrals, ClientEarth lawyers warn that the FCA’s continued failure to secure compliance is unacceptable and puts it at risk of breaching its own statutory objectives.

They argue that the FCA’s current inaction is out of kilter with its new remit from the Treasury on climate change, and leaves it open to legal challenge. 

‘The FCA risks its own integrity as a regulator, and that of the UK economy. Future regulation may simply be ignored if the FCA continues to turn a blind eye to inconsistencies in climate reporting,’ Petzsch said. 

‘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 said.

‘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.’