The Principles for Responsible Investment (PRI), the United Nations-supported body with 1,228 signatories, is readying a collaborative investor engagement on hydraulic fracturing (fracking) that will focus on global oil and gas companies.
The programme – currently involving 20 investors with a combined $1.8trn in assets under management – has been developed by a steering committee of signatories (full list below) with the aim of better understanding companies’ ability to identify, manage and reduce fracking risks and their capacity to improve practices and disclosure.
They want to achieve enhanced disclosure of fracking policies, management systems and reporting. This will enable investors to better assess and manage their exposure to fracking risks in their portfolios, it’s hoped.
The engagement is supported by research conducted for the project by consulting firm AccountAbility, which found “substantial scope for engagement” given that fracking-specific disclosure is currently very limited.
Four key areas of engagement have been identified: governance; water use and quality; air emissions; and community impact and consent. Fifty-six indicators were identified across the four areas; the average score against them was just 21%. The engagement is open to investors until January 10.The PRI is also putting together a collaboration on employee relations, which is open to signatories until January 17. This has been overseen by a steering committee of 11 global investors, formed in December 2012, with a focus on direct employees in the retail sector, excluding supply chain labour but including contract and flexible work.
The PRI commissioned UK corporate responsibility and sustainability consultancy Carnstone to provide research for the engagement.
The objectives are to identify and assess existing company practices, encourage improvements and better reporting and heighten board and management attention. This project currently has the involvement of 17 investors with a combined $1.2trn.
Fracking steering committee:
Boston Common Asset Management
British Columbia Municipal Pension Plan
Martin Currie Investment Management
Natixis Asset Management
SNS Asset Management
Threadneedle Asset Management