The Financial Conduct Authority (FCA) has closed its investigation into Drax Group PLC (Drax) concerning disclosures made to the market about the sustainability of the company’s Canadian biomass. The regulator concluded that there was no evidence justifying further action in relation to the company’s reporting.
The investigation followed concerns raised about whether Drax’s annual reports and accounts between 2021 and 2023 contained misleading statements or omitted important information needed by investors. As part of its work, the FCA reviewed thousands of pages of complex material and conducted interviews with individuals from the company.
The FCA’s focus remained strictly on matters within its remit, specifically Drax’s compliance with disclosure obligations in its annual reports and accounts for the years 2021, 2022 and 2023. The authority assessed whether the documents accurately represented relevant information about Drax’s Canadian biomass and whether any material information had been left out that could affect investors’ ability to make informed decisions.
Scope and background of the investigation
The FCA confirmed on 28 August 2025 that it was opening an investigation, following enquiries prompted by Ofgem’s August 2024 announcement of its conclusions on Drax’s reporting of biomass profiling data. The FCA’s probe was limited to examining Drax’s Annual Reports and Accounts for 2021, 2022 and 2023.
Drax is not a regulated financial services firm subject to the full range of FCA rules. However, as a listed company, it is required to comply with specific rulebooks that set out continuing disclosure obligations for issuers whose securities are admitted to trading. The FCA’s investigation therefore concentrated on whether Drax had met these obligations in relation to its Canadian biomass disclosures.
Regulatory approach and outcome
In closing the case, the FCA stated that accurate reporting is crucial to the integrity of markets and is vital for enabling investors to make informed decisions. The authority emphasised that where evidence supports proportionate action, it will take such action, and where it does not, cases are closed as swiftly as possible.
For Drax, the conclusion of the investigation means that, based on the FCA’s review of the 2021–2023 reporting period, no enforcement or further regulatory steps will be pursued in connection with the sustainability disclosures relating to its Canadian biomass. The decision underscores the FCA’s role in scrutinising listed companies’ disclosures while limiting its interventions to areas where evidence supports regulatory action.
