The Financial Conduct Authority has closed its probe into alleged misreporting of biomass sourcing at Drax, taking no further action against the energy company.
Investigation background
The watchdog launched an investigation into Drax in August last year, focusing on the company's accounts between 2021 and 2023. The probe followed whistleblower allegations that emerged from an employment tribunal. The FCA examined whether Drax's disclosures as a listed company were accurate, particularly regarding the sustainability of its Canadian biomass sourcing.
FCA statement
In a statement, the FCA said: "We undertook an extensive investigation following concerns raised regarding disclosures to the market about the sustainability of Drax’s Canadian biomass. We did not find evidence that justified any further action."
The regulator added that it reviewed thousands of pages of complex material and interviewed individuals from the company. "Our focus was on areas within our remit, specifically whether Drax’s annual reports and accounts between 2021 and 2023 contained misleading statements or left out important information investors needed to know. Accurate reporting is crucial to the integrity of our markets, and vital so investors can make informed decisions," the FCA said.
Drax response
Will Gardiner, CEO of Drax, welcomed the conclusion: "We recognise the importance of compliance with our regulatory obligations and have worked constructively with the FCA throughout this investigation. We are pleased to see the investigation closed with no action being taken."
The closure marks the end of a significant regulatory scrutiny for the power company, which operates the Drax power station near Selby, North Yorkshire.
