UK listing rules and climate change

ClientEarth argues that the current UK listing regime allows carbon-intensive companies to list on the LSE despite business models incompatible with the Paris Agreement, creating systemic financial risk. The paper recommends that the FCA make demonstrable Paris-alignment a condition for listing, treat climate-exposed applications as 'high risk' for heightened scrutiny, and issue authoritative technical guidance to the market and sponsors.

• The London Stock Exchange (LSE) faces significant systemic risk from 'stranded assets' held by listed companies, with embedded emissions estimated to be 30 times greater than the UK's own fossil fuel reserves and ten times the UK's carbon budget for 2023-2037.
• The current UK listing process lacks controls to ensure that applicant companies have credible plans to reduce climate impact or that listing proceeds will not fund activities inconsistent with Paris Agreement emissions pathways, such as new oil and gas development.
• ClientEarth recommends that the FCA use its investor protection discretion to make demonstrable Paris-alignment, evidenced by a credible transition plan, a mandatory condition for the listing of climate-exposed and carbon-intensive companies.
• The FCA possesses existing powers to mitigate climate risk, including the ability to refuse listing applications on investor protection grounds, treat transactions as 'high risk' for heightened scrutiny, control prospectus approval, and oversee sponsors.
• The paper suggests that the FCA should treat climate-exposed listings as 'high risk' transactions, similar to its approach to cannabis-related businesses, requiring additional due diligence during the eligibility review process.

APA

ClientEarth (2022). UK listing rules and climate change. https://www.clientearth.org/media/gayhuw25/uk-listing-rules-position-paper-july-2022.pdf

Chicago

ClientEarth. UK listing rules and climate change. 2022. https://www.clientearth.org/media/gayhuw25/uk-listing-rules-position-paper-july-2022.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=UK listing rules and climate change |date=July 2022 |url=https://www.clientearth.org/media/gayhuw25/uk-listing-rules-position-paper-july-2022.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2022listing, author = {{ClientEarth}}, title = {{UK listing rules and climate change}}, publisher = {ClientEarth}, year = {2022}, month = jul, url = {https://www.clientearth.org/media/gayhuw25/uk-listing-rules-position-paper-july-2022.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }