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Home » In The News » Shareowner Action on Fracking Disclosure Proves Strength of Proxy

Shareowner Action on Fracking Disclosure Proves Strength of Proxy


The Investor Environmental Health Network reports that of six shareowner resolutions filed this year with companies engaged in hydraulic fracturing, four were withdrawn and two received substantial support. -- Readers of know by now that encouraged by remarks by Securities and Exchange (SEC) Commissioner Daniel Gallagher disparaging the use of the current proxy process by sustainable investors, the US Chamber of Commerce and other business groups have petitioned the SEC to revise proxy rules.

In his remarks, Gallagher said, "Activist investors and corporate gadflies have used these loose rules to hijack the shareholder proposal system." In their petition, the Chamber and its allies specifically referenced proposals relating to environmental issues, characterizing them as "non-financial" in an effort to have the Commission's resubmission rule radically altered.

A recent summation of this proxy season as it relates to the controversial practice of hydraulic fracturing, published by the Investor Environmental Health Network (IEHN), strongly suggests that such so-called "non-financial" matters are no longer the province of sustainable investors alone; companies, and growing numbers of mainstream investors as well, clearly recognize the materiality of risks associated with the fracking process.

IEHN reports that sustainable investors and public pension funds filed six shareowner resolutions with oil and gas companies this season addressing various risks associated with fracking. Four of the resolutions—filed with ExxonMobil and Occidental Petroleum by As You Sow; with EQT by Green Century Capital Management; and with Pioneer Natural Resources by Calvert Investments—were withdrawn following agreements by the companies to provide improved disclosures.

“Exxon has finally agreed to provide shareholders with information about its on-the-ground actions – from air pollution to spill prevention to reducing truck traffic, among others,” said Danielle Fugere, President of As You Sow. “Vague assurances about protective measures are no longer sufficient; shareholders are demanding to know exactly what measures companies are adopting to protect health and the environment and, more importantly, whether those measures are demonstrably effective in preventing harm. Given the high stakes, we have moved from an era of ‘trust’, to ‘verify’.”

Resolutions filed with Chevron and EOG Resources did go to votes at the companies' annual general meetings this year, and both received support from 28% of shareowners. Such an impressive tally, which only a few short years ago would have been unthinkable for an environmental resolution, strongly suggests that the proxy system as currently designed has been embraced by more than the "activist investors and corporate gadflies" described by Gallagher.

“Unfortunately, despite years of pressure from investors and community members, Chevron continues to lag its peers in demonstrating measurable reductions of its impacts on the environment and local communities” reported Nora Nash, director of Corporate Social Responsibility at the Sisters of St. Francis of Philadelphia, a member of the Interfaith Center on Corporate Responsibility (ICCR)