- Thursday, 27 March 2014 | Staff Reporter
Global oil and gas companies are failing to adequately disclose the risks and impacts of their hydraulic fracturing (fracking) activities, according to the UN Principles for Responsible Investment (PRI) initiative.
A study conducted by global standards and corporate responsibility consultancy AccountAbility found that overall most firms fail to provide adequate information on their fracking activities and impacts.
The research analysed the disclosure practices of 56 global publicly-listed companies involved in fracking activities across the four areas of governance and risk management, water quality and use, greenhouse gas emissions and community relations.
The average score for all four indicators was 21 per cent.
PRI managing director Fiona Reynolds said this leaves significant room for improvement.
Ms Reynolds said the level of disclosure around fracking activities along with the impacts on land use, water scarcity and greenhouse emissions, is increasingly being scrutinized by investors.
Consequently, Mr Reynolds said, PRI wants to encourage companies to improve their level of disclosure and provide investment managers with an understanding of how environmental and social governance risks are being managed.
“Better disclosure will ensure investors have the information they need to manage their exposure to the financial, operational and reputational risks associated with fracking within their portfolios and make informed decisions on behalf of their beneficiaries,” said Mr Reynolds.
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