06 April 2014, News Wires – US supermajor ExxonMobil has agreed to be more transparent in disclosing the environmental and community risks associated with its hydraulic fracturing operations, responding to proposals set forth by shareholders.
New York City Pension Funds and environmental advocacy group As You Sow, and others had lobbied for the disclosure at shareholder meetings the past five years. They have now agreed to withdraw the proposal.
“ExxonMobil is responding to shareowners on issues that are critical to its long-term sustainability,” said New York City comptroller Scott Stringer, who advises the pension fund.
“We have seen the significant risks that come from hydraulic fracturing activities. Corporate transparency in this arena is truly necessary for assessing risk and ensuring that all stakeholders have the information they need to make informed decisions.”
According to the resolution, fracking poses risks to long-term shareholder value as leaks, spills, industrial accidents, poor air quality, and community impacts from from the controversial completion technique raise “regulatory, reputational, and legal risk, and put the company’s social license to operate at risk”.
“Exxon’s shift toward disclosure and transparency is important, especially in light of how long investors have been asking for this information from the company,” said Danielle Fugere, president of As You Sow. “Against a backdrop of moratoria, well accidents, environmental disruption, and community harms, company assurances of good practices are no longer sufficient to attract and maintain investment.”
The resolution will see ExxonMobil provide more transparency in how the company manages millions of gallons of fracking wastewater, air pollution, methane emissions, drinking water depletion and strained civic infrastructure.
ExxonMobil’s agreement follows the company’s recent report on what impact the regulation of greenhouse-gases would have on its business model. It concluded that efforts to curb carbon emissions would have little impact on the company’s reserves.
The supermajor was the first oil and gas producer to publish such a report.
Spokesman Alan Jeffers confirmed the resolution, saying the company is in the “risk-mitigation business”.
“We want to analyse it, understand it and put policies in place to manage that risk,” he said.”Generally speaking, we thing that’s something industry can do more of.”
He said previous proposals by the New York City comptroller and As You Sow had focused on more “quantitative” account of fracking risks, while ExxonMobil was always interested in “a more qualitative statement” on how the company manages those risks.