ESG Enforcement Tracker

Key facts:

The FCA has opened an investigation into Drax concerning its biomass sourcing disclosures between January 2022 and March 2024 and the compliance of Drax’s 2021, 2022 and 2023 Annual Reports with the Listing Rules and Disclosure Guidance and Transparency Rules, under the UK Market Abuse Regulation.

Drax, a major UK energy provider, has transitioned from coal to biomass at its North Yorkshire power station and has positioned itself as a leader in renewable energy and carbon removal technologies. Concerns, however, have emerged regarding the environmental impact and traceability of the wood pellets it imports, primarily from North America.

The FCA’s investigation follows an investigation by Ofgem into Drax Power Limited, concerning whether the power generation company was in breach of its annual profiling reporting requirements relating to the Renewables Obligations scheme and other related matters. Ofgem found no evidence of deliberate misreporting but concluded that Drax had failed to comply with its obligations, and specifically its CP20 annual profiling submission. Accordingly, Drax Power Limited submitted to pay £25 million into Ofgem’s Voluntary Redress Fund, among other steps.

These investigations follow a documentary by the BBC investigative programme, Panorama, in which the company was accused of greenwashing and serious environmental harm.

Drax has stated it will cooperate with the FCA as part of its investigation.