February 10, 2012
Shareowners Continue Campaign for Disclosure of Risks Associated with Fracking
by Robert Kropp
Ten shareowner resolutions addressing hydraulic fracturing have been filed thus far for the 2012
proxy season, and proponents for improved disclosure look to improve upon last year's 40% vote in
When Richard Liroff, executive director of the Investor Environmental Health Network (IEHN), talked with
SocialFunds.com in December about the success of shareowner resolutions addressing hydraulic
fracturing, he said, "We struck a nerve."
The occasion for our talk was the
publication by IEHN and the Interfaith Center on
Corporate Responsibility (ICCR) of an Investor Guide to
help increase corporate disclosure and mitigate the impacts of hydraulic fracturing, or fracking.
The 12 key performance indicators (KPIs) included in the Guide address such issues as
board level transparency and disclosure of all chemicals used in the process, mitigation of
environmental impacts, compliance throughout the supply chain, and securing the consent of all key
stakeholders in communities.
The ten oil and gas companies already facing shareowner
resolutions addressing the controversial practice this year would do well to consult the Guide.
Although the first resolutions on fracking were introduced in 2009, by the next year they were
already receiving an average 40% of shareowner support.
Shareowners filing this year's
resolutions include Green Century Capital
Management, As You Sow, IEHN, and
members of ICCR. Companies targeted by the resolutions include Exxon Mobil, Chevron, and Chesapeake
Referring to "high profile contamination incidents," as well as widespread
moratoriums on fracking, the reso
lution filed with Exxon Mobil by As You Sow states, "Proponents believe these potential
environmental impacts and increasing regulatory scrutiny could pose threats to Exxon Mobil's
license to operate and enhance vulnerability to litigation." The resolution requests that Exxon
Mobil report on the environmental impacts of its fracking operations, and adopt policies that go
"above and beyond regulatory requirements and our company's existing efforts."
members have focused on community impacts in their resolutions. As Pat Zerega, director of
shareholder advocacy at Mercy
Investment Services said, "This year nearly all the resolutions on fracking cite community
impact which stems directly from our members' experience in towns where fracking occurs."
The resolution filed with Chevron, for instance, states, "Negative local impacts are straining
community resources and generating opposition to fracturing operations." Shareowners request that
the company report on risks "associated with community concerns, known regulatory impacts,
moratoriums, and public opposition to hydraulic fracturing."
"Bans and moratoria are
denials of companies' social license to operate and impose a wide range of costs on companies,
ranging from the costs of delays to complete loss of access to valuable resources where sunk costs
must be written off," Larisa Ruoff, Director of Shareholder Advocacy for Green Century, said.
"Right now, companies are not providing investors, or the communities in which the companies
operate, sufficient information on the steps they are taking to address and mitigate the risks
associated with hydraulic fracturing operations so shareholders are demanding increased