Shareholders Press Oil & Gas Companies on Fracking

Representing shareholders, investment management organizations are increasingly pressing US oil and gas companies to take stronger actions and increase public disclosure of information regarding the 'other' two core aspects of 'Triple Bottom Line' business practices: environment, labor and community.

Investor groups, coordinated by Ceres, on Feb. 8 announced they've filed shareholder resolutions with Exxon-Mobil, Chevron, Chesapeake Energy, ConocoPhillips and 14 other oil and gas companies, "pressing them to disclose their plans for managing environmental and workplace challenges such as hydraulic fracturing, greenhouse gas emissions and woker safety."

“The common thread of these resolutions is stronger management focus on environmental and social challenges that will have real bottom line impacts,” said Mindy Lubber, director of the Investor Network on Climate Risk (INCR) and president of Ceres. “These investors are telling companies they expect to see real progress on climate change, clean energy and other sustainability fronts, despite the policy paralysis in Washington.”

Proxy resolutions: The 'Sleeping Giant' for achieving positive change in business?

A prominent theme of the shareholder resolutions is the financial risk associated with employing hydraulic fracturing - aka "fracking" - to extract natural gas from tightly packed shale deposits. In the resolutions, investor groups request detailed accounting of how oil gas companies - including Anadarko, Cheseapeake Energy, Chevron, EOG Resources, Exxon Mobil, Noble Energy, Penn Virginia, Range Resources, Stone Energy and Ultra Petroleum - are addressing the risks of fracking associated with threats to environment, communities, labor, regulatory changes and drilling moratoriums.

“As community opposition and regulatory risks for fracking operations grow, investors are likewise concerned about how businesses are managing their exposure to these risks,” said Larisa Ruoff, Green Century Capital Management, which filed resolutions with Chesapeake Energy, Chevron, EOG Resources, Noble Energy and Ultra Petroleum, and coordinates efforts to press companies on fracking risks along with the Investor Environmental Health Network.

Filing shareholder ractions has brought about positive change and increased corporate responsibility related to homebuilding, electric power and other industries in recent years, Ceres notes, which are detailed in the organization's "Proxy Power: Shareholder Successes on Climate, Energy & Sustainability."

"If our portfolio companies are to provide long-term share-owner value, they need to be proactive, not reactive, in addressing climate change and other environmental and social issues. The excessive focus on short-term profits at the expense of all else has proven disastrous and has led to widespread financial issues," CEO of the California State Teachers’ Retirement System (CalSTRS) Jack Ehnes states.