Fracturing and drilling companies "owe" investors disclosure
February 11, 2014 | By
Barbara Vergetis Lundin
A coalition of investors concerned about the lack of reported progress in mitigating the risks associated with hydraulic fracturing operations have submitted shareholder resolutions targeting organizations that received failing scores in a recently-released report. The report scored oil and gas companies on their disclosed efforts to measure and mitigate the impacts of their hydraulic fracturing operations on communities and the environment. The proponents of the shareholder resolutions represent environmental and social investors, as well as a leading public pension fund. "The damaging impacts of hydraulic fracturing on air, water, and local communities have made the public understandably nervous and resistant to permitting this controversial industrial activity," said Leslie Samuelrich, president, Green Century Capital Management, a company that filed a resolution at EOG Resources together with the New York State Comptroller Thomas P. DiNapoli. "Companies that fail to demonstrate a public commitment to identifying and mitigating their impacts will fail to earn the public trust, and may put shareholder value at risk." The filed resolutions urge companies to quantify and disclose the impacts of hydraulic fracturing operations on ground and surface water, air quality, and local communities, arguing that failure to manage these impacts puts shareholder value at risk. DiNapoli contends that companies engaging in hydraulic fracturing and horizontal drilling "owe" it to shareholders and local communities to disclose the steps they are taking to protect the environment and keep the air and water supply safe and that by providing specific metrics and adhering to best management practices, investors can gauge how companies are managing the risks and rewards of their operations. "Investors need quantifiable data to objectively measure progress," said Richard Liroff, executive director of the Investor Environmental Health Network. "We are urging companies to move beyond anecdotes and generalizations and provide the data that will help investors identify which companies are reducing hydraulic fracturing risks through minimizing greenhouse gas emissions, lowering water usage and using safer chemicals. Addressing these concerns will prove critical for companies hoping to maintain their 'license to operate' in local communities." ExxonMobil, Chevron, EOG Resources, and Occidental Petroleum all received failing scores in a recently-released report scoring companies engaged in hydraulic fracturing on disclosed operational impacts and mitigation efforts. The report benchmarks 24 companies engaged in hydraulic fracturing against 32 indicators relating to management of toxic chemicals, water and waste, air emissions, community impacts, and governance. ExxonMobil, Occidental Petroleum, Chevron, and EOG Resources scored points on just 2, 2, 3, and 6 out of 32 indicators, respectively. Institutional investors have been pressing oil and gas companies since 2009 for greater disclosure of their risk management practices. For more:
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