Eco warriors vow to continue court battle over oil firm’s flotation

Ecological campaigners have vowed to keep fighting a rare legal battle with the City regulator over the listing of North Sea oil firm Ithaca Energy.

Environmental group ClientEarth launched a lawsuit against the Financial Conduct Authority (FCA) in February, claiming the watchdog unlawfully signed off documents related to Ithaca’s £2.5 billion stock market flotation last year.

ClientEarth alleged Ithaca’s listing papers failed to adequately outline the risks to the company – one of the North Sea’s largest fossil fuel producers – from climate change.

Last week, the High Court threw out the case, which took the form of a judicial review. But ClientEarth has vowed to appeal and insists the regulator ‘failed’ by waving through Ithaca’s prospectus, a legal document that companies are required to publish ahead of a float.

The ecological group argues that, although the prospectus acknowledged climate change poses a risk to oil and gas companies, Ithaca failed to explain prior to its float how significant the risks could be to its business, which includes setting up new oil and gas projects. It claims these are incompatible with climate goals, particularly considering the Paris agreement target to limit global warming to below 2C.

Scrutiny: Ithaca Energy has become one of the North Sea’s major players

ClientEarth argues this failure was subsequently ignored by the FCA. Robert Clarke, a ClientEarth lawyer, said: ‘One of the regulator’s main duties is to protect investors.

‘A key way it does that is by ensuring companies that apply to list on the London Stock Exchange adequately disclose the risks associated with their activities, including climate-related risks.

‘In the case of Ithaca’s listing, we believe the regulator has failed by ultimately waving through Ithaca’s prospectus even though legal requirements have not been met.’

The FCA said ClientEarth does ‘not have the standing to bring the claim’, adding: ‘In any event, the prospectus does address risks arising out of climate-related factors to Ithaca’s business and securities.’

Its lawyers said ClientEarth was not ‘directly affected by the decision to approve Ithaca’s prospectus’.

Ithaca was floated in November in the UK’s largest public listing of 2022. It has drawn intense scrutiny over its interests in the Cambo and Rosebank oil and gas fields, which have turned Ithaca into one of the major players in the North Sea.

There has been a renewed focus on UK oil and gas production since Russia’s invasion of Ukraine triggered a push for Britain to wean itself off foreign imports.

Since its float, Ithaca’s shares have fallen by about 30 per cent. It is now valued at £1.6 billion.

A ClientEarth spokesman said: ‘We are disappointed but will apply for the decision to be reconsidered under court procedural rules.’

An FCA spokesman said: ‘We welcome the court’s decision to refuse ClientEarth’s application for permission to apply for judicial review. It would need to renew its applications for permission should it wish to pursue its case further and we will oppose any such application.’