A coalition of investors committed to environmental stewardship and corporate responsibility are using their combined $1 trillion in assets to pressure energy companies to adhere to “best practices” in fracking shale oil gas.
The coalition, led by Boston Common Asset Management, the Investor Environmental Health Network and the Interfaith Center on Corporate Responsibility, includes companies such as Dexia Asset Management, Domini Social Investments and Pax World Funds.
In a statement released Wednesday, the socially responsible investing (SRI) asset managers said they wanted energy companies to adopt 12 best practices regarding risk management and reporting that members of the coalition drew up last December.
Called “Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations,” the guidelines include goals such as reduction of toxic chemicals, disclosure of fines, penalties and litigation and the securing of community consent to fracking projects.
Speaking for the group, Steven Heim of Boston Common decried the lack of consistent standards among companies engaged in fracking, saying, “the best course…for investors, the environment and human health will be if all shale gas extractors wake up, get the message, and use [the group’s guidelines] to do it right.”
Sister Nora Nash, of the member group Sisters of St. Francis of Philadelphia, also had some tough words for shale gas companies, saying “they must listen closely, respond sensitively, and account to both investors and communities for their actions. Otherwise, this is an uncharted process of unwanted development that deprives communities of their rights and leads to litigation and loss of investor confidence.”
Technological advancements in hydraulic fracturing, or fracking, has revolutionalized oil and natural gas production, making energy reserves that were inaccessible a decade ago recoverable today.
But the techniques used to extract oil and gas from fractures in shale formations are controversial, with environmentalist critics warning that chemicals used in the process may contaminate groundwater, emit toxins into the atmosphere and have ill health effects.
Worries about environmental impact and public health have led to a number of moratoria on shale development, most prominently in New York, but also in the Delaware River Basin and in the Province of Quebec, Canada. Ohio has recently tightened its rules and is considering a partial ban on some drilling. Fracking disclosure has also been the subject of an increasing number of shareholder resolutions.