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Coalition of Investors Urges Disclosure of Fracking
By Tyler Collins

An investor coalition is making significant progress on focusing corporate attention on the risks of hydraulic fracturing operations and disclosure to shareowners.

Hydraulic fracturing (“fracking”), a process of extracting natural gas that involves injecting millions of gallons of water, chemicals, and sand deep underground to create fractures through which gas can flow for collection, is a focus of heated debate across the nation.

Communities are concerned about the risks of water shortages and contamination from the toxic fluids used in fracking, as well as an increasing prevalence of acute and chronic health problems from hazardous air emissions. Natural gas extraction companies are generally not required to disclose the chemicals used in fracking operations (they argue that the information is proprietary, a trade secret).

Coupled with a lack of federal oversight ensuring transparency, “shareholders didn’t know and couldn’t find out critical information about company operations, including chemical and water use,” explains Richard Liroff, executive director of Investor Environmental Health Network (IEHN), a national non-profit.

Since 2009, a coalition of investors formed up behind Green Century Capital Management (Green Century) and IEHN to advocate on the behalf of shareowners for greater corporate disclosure on their fracking operations and the resulting environmental and community impacts. In December 2011, IEHN published Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations which many investors and companies are finding to be a valuable resource for easing fears around fracking operation.

The coalition includes large public pension funds, mutual funds, religious institutions, and foundations expresses concerns and seeks greater transparency and accountability through shareholder resolutions. First Affirmative is proud to be a member and assertive supporter of this collation.

The fracking resolutions have received outstanding and growing investor support effectively garnering the attention of company management to environmental investor concerns.

“These votes sent a very clear message to companies that investors are concerned about financial risks posed by environmental impacts of hydraulic fracturing,” said Leslie Samuelrich, senior vice president of Green Century, investment advisor to a family of environmentally responsible mutual funds.

Regulatory agencies have not been oblivious to these risks. In 2011, the Securities and Exchange Commission (SEC) emphasized the need for fracking companies to provide investors with information about hydraulic fracturing operations, and, consequently, the risks to the environment, communities, and investors.

 

Posted: May 8, 2013