$1trn investor group unites to back best practices on gas “fracking”

Group of 55 global major investment institutions

A group of 55 major global investment institutions – with almost $1trn (€786m) in combined assets under management – have united to support a set of 12 best practice guidelines covering the hydraulic fracturing (“fracking”) of shale gas.
The group has been marshalled by Boston Common Asset Management, the Investor Environmental Health Network and the Interfaith Center on Corporate Responsibility.
“Major investors are no longer willing to sit by idly as energy companies engaged in shale gas fracking face concerns about industry drilling problems, growing regulatory uncertainty, and increasing opposition from concerned shareholders,” the group said.

The coalition includes groups focused on Environmental, Social and Governance (ESG) factors and others that aren’t.

Prominent among the backers are institutions such as APG All Pensions Group, Australian Council of Superannuation Investors, Dexia Asset Management, Mercy Investment Services, Green Century Capital Management, and Australia’s Regnan.

The guidelines were developed in an investor guide on fracking published in December 2011 by the IEHN and ICCR.“The best course here for investors, the environment and human health will be if all shale gas extractors wake up, get the message, and use these tools to do it right,” said Steven Heim, Boston Common’s director of ESG Research and Shareholder Engagement.

Richard Liroff, the executive director of the Investor Environmental Health Network, said the group was encouraging a “corporate race to the top” in adopting best practices.

And Sister Nora Nash, director of corporate social responsibility for the Sisters of St. Francis of Philadelphia, said shale gas companies needed to earn their ‘social license’ by operating in a more responsible manner.

The guidelines:

• Manage risks transparently and at board level;
• Reduce surface footprint;
• Assure well integrity;
• Reduce and disclose all toxic chemicals;
• Protect water quality by rigorous monitoring;
• Minimize fresh water use;
• Prevent contamination from waste water;
• Minimize and disclose air emissions;
• Prevent contamination from solid waste;
• Assure best in class contractor performance;
• Secure community consent; and
• Disclose fines, penalties and litigation.