Most oil and gas companies continue to fail to adequately disclose what actions they are taking to address the environmental concerns surrounding fracking, a coalition of groups reported Wednesday.
Because of the lack of information, it is difficult for investors to assess the risks the companies face through harm to the environment, the groups say. The assessment comes one day after the Environmental Protection Agency issued a report saying hydraulic fracturing, or fracking, harms water quality in some instances.
The coalition says most oil and gas companies are at least slightly improving their reporting but that seven out of 10 are still failing to report enough information so investors can compare performances. The three groups, As Your Sow, Boston Common Asset Management and the Investor Environmental Health Network, ranked 28 oil and gas companies on how they report policies to reduce risks from fracking. Twenty of the 28 improved their scores from last year.
Unmanaged risk can be costly to investors. The ability of oil and gas companies to continue to operate “remains at risk as communities living with the impacts of fracking, or facing its prospects, continue to pressure operators and governments to halt or greatly limit fracking operations,” the report says.
A total of 11 oil and gas companies made substantial progress in their 2016 disclosures. The report ranks BHP Billiton Ltd. as the company disclosing the most information for the third year in a row. Apache Corp. and Noble Energy Inc. were next and Hess, Southwestern Energy Co. and Range Resources Corp. tied for fourth.
The companies doing the worst job of reporting were Whiting Petroleum Corp., Continental Resources Inc., Devon Energy Corp., WPX Energy Inc. and Cabot Oil & Gas Corp.
Larger oil companies such as Exxon, Chevron and BP were in between but toward the bottom of the list. The entire list and report can be found here.
The 2016 scorecard assesses five areas of environmental, social and governance metrics, emphasizing quantitative disclosures in toxic chemicals, water and waste management, air emissions, community impacts, including truck traffic and impacts on roads, and management accountability. The report also takes into consideration methane leakage, water usage and induced earthquake activity.
“It is encouraging each year to see new companies jumping into the top five for disclosing [their data],” says Danielle Fugere, president of As You Sow. However, “15 companies—more than half of those reviewed—failed to report on even one-third of the key metrics we examine, making it extremely difficult for investors and the public to assess and compare companies’ performances and to gauge how well these companies are addressing environmental and community impact risks.
“If regulations become more lax with the new administration, we will see greater discrepancies between companies’ reports,” Fugere says. “Some will continue to report, but others may be tempted to reduce protections and reporting if allowed.”