Quantitative risk reporting
According to INCR’s press release, the majority of the shareholder resolutions “focus on quantitative risk reporting, urging companies to issue reports including specific data such as the number or percentage of ‘green completions’ and other low-cost emission reduction measures; quantifying the sources and amount of water used for shale energy operations by region; systems to track and manage naturally occurring radioactive materials; the extent to which closed-loop systems for management of drilling residuals are used; and the numbers of community complaints or grievances and portion open or closed.”
Ultra Petroleum was the target of a similar shareholder resolution last summer that won the support of holders of 21% of the company’s shares. To put this in context, that’s four times the typical level of support for a first-time environmental proposal.
In addition to those I’ve already mentioned, resolutions were filed today with Spectra Energy, Range Resources, and ONEOK to limit fugitive methane emissions through a program of measurement, mitigation, and disclosure.
“Given the high short-term climate impact of methane emissions, it is now an open question whether natural gas can serve as a bridge fuel to a more sustainable energy future,” said Natasha Lamb, vice president of shareholder advocacy and corporate engagement at Trillium Asset Management, which filed the methane resolutions. “Companies can and should reduce their emissions using new technologies with positive return on investment.”
Bottom line
With every passing year, shareholder resolutions related to climate change are winning increasing support. Couple that trend with public opposition to fracking and increasing regulatory involvement in companies’ environmental risk management, and you have major pressure building on the oil and gas sector. I’ve included some of the best and worst performers in this article. Investors can also use the factors outlined in the “Extracting the Facts” report as a guideline. My bet is that companies that get ahead of these issues will benefit in the long run.
The article Investors Push Back on Fracking originally appeared on Fool.com and is written by Sara Murphy.
Sara E. Murphy has no position in any stocks mentioned. You can follow her on Twitter at @SMurphSmiles. The Motley Fool recommends Spectra Energy. and Ultra Petroleum. The Motley Fool owns shares of Apache and Ultra Petroleum and has the following options: Long Jan 2014 $30 Calls on Ultra Petroleum, Long Jan 2014 $40 Calls on Ultra Petroleum, and Long Jan 2014 $50 Calls on Ultra Petroleum.
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