Carnival Corporation has been reported to the UK’s financial services regulator for failing to fully report on climate change risk to its investors.
Under UK law, a company must disclose material risks to its business that could impact its value, so investors can make an informed decision about whether to invest.
Environmental law charity ClientEarth claims Carnival failed to adequately tell investors this information and has reported the world’s largest cruise company to the Financial Conduct Authority (FCA).
The charity’s lawyers alleged the failure by Carnival and food delivery firm Just Eat following analysis of the largest 250 UK companies between 2019 and 2020.
It alleges that “no reference to climate change” was made “in the Carnival Corporation and Carnival PLC consolidated annual report” and only “vague” statements were made in its strategic report.
ClientEarth went on to say that Carnival’s strategic report “did not include any concrete analysis of climate impacts on its business model”.
“Neither the food delivery platform nor the cruise line operator – despite being major players in their respective sectors – are addressing how the climate crisis will affect their operations and finances in their investor reports,” the environmental group said.
Carnival Corporation has previously hailed efforts costing billions of dollars to ensure its future operations are sustainable, including investment in shore power capabilities, liquefied natural gas and advanced air quality systems.
By 2020, nearly 80% of the company’s fleet was equipped with systems capable of removing nearly all sulphur from exhausts.
The company has also identified a target of reducing its carbon footprint by 40% by 2030, having already reduced its CO2 emissions by more than 25% compared with its 2005 baseline, with an ultimate target of zero emissions.
It is reducing plastics and waste on ships and making use of new technology such as bio-digesters and advanced waste water treatment plants.
The FCA is yet to sanction a company over its climate disclosure, but in March the chancellor Rishi Sunak urged the regulator to “have regard” in its work about the government’s effort to reach a net zero economy by 2050, a Reuters report said.
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.”
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