Chevron Unresponsive to Calls for Improved Risk Measurement in Fracking Operations, Say Investors
Citing growing impatience with the intractability of fossil fuel companies in addressing environmental and social risks, members of the Interfaith Center on Corporate Responsibility view 2013 as watershed year for the industry and its investors.
NEW YORK, NY///February 19, 2013///As the fossil fuel industry comes under heightened scrutiny from both politicians and the public, investors from the Interfaith Center on Corporate Responsibility (ICCR), who have engaged with fossil fuel companies for decades, insist the sector’s active resistance to progress on operational practices must end.
2013 marks the 4th year that a shareholder proposal will appear on the Chevron proxy statement calling for reporting on the company’s risk management protocols of shale fracking operations including reporting on adverse community impacts.
Sr. Nora Nash of the Sisters of St. Francis of Philadelphia and leader of the Chevron engagement indicated that “Our demands are reasonable and in the best interest of the company and its investors. We want to know what the company is doing, beyond regulatory requirements, to minimize the adverse environmental and social impacts from these operations. As shareholders we have a right to know all the risks involved in Chevron’s operations as they will have obvious implications for our investments and for the lives of so many who are living in impacted communities.”
ICCR had similar proposals on the proxy ballot in 2010, 2011 and 2012. These proposals are broadly supported by institutional investors both inside and outside the ICCR coalition and have received extremely high levels of support from Chevron shareholders. In 2011 the resolution was supported by 40% of Chevron shareholders, a result that is viewed as a clear call to management for the implementation of key performance indicators.
According to the proxy resolution: Chevron is one of 11 companies which signed onto “Recommended Standards and Practices for Exploration and Production of Natural Gas and Oil from Appalachian Shales.” By (Chevron’s) own language, these standards describe what companies “should do” rather than what companies currently do or commit to doing.
Further, in response to industry demands for guidance on measurement and reporting frameworks for shale fracking operations, in December of 2011 ICCR, along with the Investor Environmental Health Network, publishedExtracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations which was widely endorsed by both investors and environmental groups. Among many recommendations, the guide cited measurement of community impacts as integral to managing risk.
ICCR members have filed a total of 9 resolutions with Chevron this year including proposals calling for improved governance protocols and reporting on lobbying and political spending activities. Said Sonia Kowal of Zevin Asset Management who co-filed on several Chevron proposals on behalf of several clients, “In our dialogues with Chevron and other fossil fuel companies we ask management to consider new business models that will reduce the adverse impacts of their operations and get us to renewables sooner. We are somewhat baffled by the industry’s response. While companies say all the right things in advertising and on websites, they also continue to lobby heavily against the very regulations that are needed to make these advances possible.”
Alluding to heightened anxiety in the wake of new climate change data, President Obama’s promises for tougher GHG reduction goals and a growing movement on college campuses calling for divestment from fossil fuels, Laura Berry, ICCR’s Executive Director observed, “The world is watching these companies closely, and those that show leadership by advancing safer and more sustainable solutions to meeting global energy demands will be in a position to capitalize, thereby generating sustainable revenues for investors. In contrast, those that cannot innovate will succumb to the creative destruction as old models are replaced.
Observed Nash, “By its own admission Chevron knows what it should do, yet continues to drag its feet on implementation putting the health of millions of communities at great risk. How does a company of its size and status justify this position? When they receive their proxy statements in a few weeks, we urge Chevron shareholders and those of other fossil fuel companies to vote their proxies for the planet and for our future before it’s too late.”
Director of Communications, ICCR
About the Interfaith Center on Corporate Responsibility (ICCR):
Currently celebrating its 42nd year, ICCR is the pioneer coalition of active shareholders who view the management of their investments as a catalyst for change. Its 300 member organizations with over $100 billion in AUM have an enduring record of corporate engagement that has demonstrated influence on policies promoting justice and sustainability in the world.