In January 2012, Swift Foundation joined more than 40 organizations representing over $55 billion in assets to support a new report on corporate responsibility in fracking. The report written by the Investor Environmental Health Network and Interfaith Center on Corporate Responsibility offers best practice recommendations on reporting and reducing the risks and impacts from natural gas production from shale formations.
The report is called, Extracting the Facts: An Investor Guide to Disclosing Risks From Hydraulic Fracturing Operations. You can find links to the report and supporting materials on IEHN’s webpage: http://www.iehn.org/publications.reports.frackguidance.php
The Guide grew out of long-term investor dialogues with key corporate players in the energy industry and, in several cases, draws on policies and practices currently in use by energy companies. Importantly, it is a resource for companies to respond to the Securities and Exchange Commission’s growing interest in the environmental risks from fracturing operations, and will also help companies seeking to implement a U.S. Department of Energy advisory panel recommendation that companies “adopt a more visible commitment to using quantitative measures as a means of achieving best practice”.
In a their press release, the following highlights were provided:
“Companies must be publicly transparent about how they manage their environmental and social impacts,” said Richard Liroff, Executive Director of IEHN and principal author of the Guide. “Genuine transparency requires them to fully disclose the steps they are taking to minimize risks, to acknowledge their challenges and failures, and to clearly define the methods they will use to continually improve operations.” Liroff continued, “The Guide offers a road map for companies to respond to the heightened concerns around fracking, and articulates industry best practices that will reduce the risks, and consequently, the impacts. ”
“As questions about hydraulic fracturing mounted from investors, the public, local municipalities, and federal regulators, companies called for greater clarity around what to measure and what to report,” said Steven Heim from Boston Common Asset Management. “The Guide is an attempt to streamline these requests and provide a comprehensive reporting framework.”
Heim continued, “Since 2009, shareholders have filed 21 resolutions at 16 different companies including Cabot Oil & Gas Corp, Chesapeake Energy Corp, Chevron Corp, ExxonMobil Corp and Range Resources Corp to address the risks of hydraulic fracturing. The votes have been remarkably strong and signal significant and growing investor concern about companies’ management of shale gas risks.”
“While industry often claims business risks are minimal and community concerns are unfounded, explosions, contamination incidents, and millions of dollars in fines are clear evidence that many things can and will go wrong until the proper safeguards are put in place,” said Larisa Ruoff of Green Century Capital Management. “This systematic reporting will provide essential information for investors to distinguish leaders from laggards in the sector and will help companies directly respond to legitimate community concerns.”