Hydraulic Fracturing for Natural Gas and Oil Development


With As You Sow, Boston Common Asset Management and Green Century Capital Management, between 2009 and 2017 IEHN coordinated an investor campaign in the United States to promote improved disclosure by energy companies about the business and environmental risks of hydraulic fracturing. In 2018, when IEHN's chemicals and pesticides work moved under the umbrella of Clean Production Action, the fracking work shifted to As You Sow and Boston Common Asset Management.

Onshore “unconventional” natural gas production requiring hydraulic fracturing, which injects a mix of water, particles, and chemicals underground to create fractures through which gas can flow for collection, is estimated to increase by 45% between 2007 and 2030. An estimated 60-80% of natural gas wells drilled in the next decade will require hydraulic fracturing. In 2013 the United States overtook Russia as the world's largest oil and natural gas producer. Between 2010 and 2013, oil production tripled in North Dakota and doubled in Texas.

Fracturing operations may have significant impacts on surrounding communities. Experts cite risks of toxic spills of  fracturing chemicals, and pollution of air or water, among other impacts.  Fracturing operations involve the movement, storage, and disposal of millions of gallons of water and thousands to tens of thousands of gallons of toxic chemicals. But because of a lack of transparency, it can be very difficult to learn what chemicals are used by companies. Spills, regulatory penalties, and litigation linked to fracturing operations in been reported in several states where natural gas companies are active. Media attention to fracturing and levels of public concern about potential environmental impacts have skyrocketed.

Currently investors lack sufficient information on the environmental health hazards of fracturing operations at individual companies—even though the companies face litigation, reputational, competitive, and regulatory risks. Investors lack sufficient information to distinguish the companies that fully understand and are effectively managing the risks attendant to fracturing from those that are not.

investor actions

In an effort to learn more about environmental hazards, investors have engaged more than two dozen companies via letters, phone calls, and meetings. In the 2010 proxy season, investors filed shareholder resolutions at 12 companies. Resolutions were withdrawn in some cases when companies agreed to enhanced disclosures. Votes at six companies ranged from 21% to 42%, averaging 30%. Investors continued their engagements with companies during the 2011 proxy season, filing resolutions at nine companies and dialoguing with others. Votes at five companies ranged from 28% to 49.5%, averaging 40%. During the 2012 proxy season, resolutions were filed at 10 companies and withdrawn from seven in response to corporate disclosure commitments. In the 2013 proxy season, resolutions were filed at six companies and withdrawn at three. Votes ranged from 30% to 42%. In the 2014 proxy season, investors filed at six companies, emphasizing quantitative disclosure on key performance indicators. Resolutions were withdrawn at four in response to disclosure commitments; the remaining two were supported by 28% of voting investors. In the 2015 proxy season, resolutions were filed at 7 companies and withdrawn at 3. Votes ranged from 25% to 33%. Five resolutions were filed in 2016, of which two were withdrawn. In 2017, two of the three filed resolutions were withdrawn and the vote at the remaining one was 38%.

Investors have specifically requested increased disclosure about environmental hazards and associated financial risks, and about corporate risk management policies such as adoption of precautionary best management practices beyond currently uneven state regulatory requirements.

In 2011, IEHN and the Interfaith Center on Corporate Responsibility published Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations. The guidelines identify core management goals, best management practices and key performance indicators for reducing the risks of hydraulic fracturing activities and assessing progress in doing so. The guidelines earned support from investment managers and advisors responsible for $1.3 trillion in assets in North America, Europe, and Australia.

In 2013, IEHN and As You Sow, Boston Common Asset Management, and Green Century Capital Management published Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations. This scorecard, based on Extracting the Facts, rated the disclosure practices of 24 companies and highlighted leading practices in certain areas. In 2014, IEHN and these same partners published an updated version of Disclosing the Facts, rating 30 companies. IEHN, As You Sow and Boston Common Asset Management collaborated on additional updates in 2015 and 2016. The 2017 edition produced by As You Sow, Boston Common Asset Management and IEHN focused solely on management of methane emissions, reflecting growing investor interest in reducing companies' impact on global climate change.


The following resources address key issues in the controversy over shale energy development:

  • Disclosing the Facts 2017: Transparency and Risk in Methane Emissions (fifth annual corporate disclosure scorecard) click here.
  • Disclosing the Facts 2016: Transparency and Risk in Hydraulic Fracturing Operations (fourth annual corporate disclosure scorecard) click here.
  • Disclosing the Facts 2015: Transparency and Risk in Hydraulic Fracturing Operations (third annual corporate disclosure scorecard) click here.
  • Disclosing the Facts 2014: Transparency and Risk in Hydraulic Fracturing Operations (updated corporate disclosure scorecard) click here.
  • Disclosing the Facts: Transparency and Risk in Hydraulic Fracturing Operations (corporate scorecard) click here.
  • Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations, click here.
  • Outcomes and texts of shareholder resolutions, select for “hydraulic fracturing” in the subject area after clicking here.
  • Shale Gas Exploration and Production: Key Issues and Responsible Business Practices--Guidance Note for Financiers (Guidelines released under the auspices of The Climate Principles Framework Initiative), click here, and for Richard Liroff blog summarizing the guidelines, click here
  • Richard Liroff blog, "Baker Hughes Clues in, Reveals Formerly Secret Frack Chemicals", click here
  • "5 Ways to Clean Up Fracking's Chemical Act", click here.
  • Richard Liroff blog, "The Real Story About the Risks of Fracking", click here.
  • Richard Liroff testimony to Texas House Energy Committee re company, environmental group support for Extracting the Facts, click here.
  • Sustainable Investment Institute 2012 report for investors, "Discovering Shale Gas: An Investor Guide to Hydraulic Fracturing", click here.
  • Sustainalytics 2011 report for investors, "Fracking Under Pressure: The Environmental and Social Impacts and Risks of Shale Gas Development", click here.
  • MSCI ESG research 2011 report for investors, "Shale Gas and Hydraulic Fracturing in the US: Opportunity or Underestimated Risk?", click here.
  • International Energy Agency 2012 report, "Golden Rules for a Golden Age of Gas", click here
  • U.S. Department of Energy shale advisory panel 2011 reports, see here and here.
  • "Hydraulic Fracturing 101--What Every Representative, Environmentalist, Regulator, Reporter, Investor, University Researcher, Neighbor, and Engineer Should Know About Hydraulic Fracturing Risk" A quantitative risk analysis of shale development by Apache Corporation's George King. For summary version click here and for complete version click here.
  • Resources for the Future report on state regulatory stringency and maps comparing these regulations on various criteria, click here.
  • Earthworks Oil and Gas Accountability Project's "Breaking All the Rules: The Crisis in Oil & Gas Regulatory Enforcement" is the most-detailed, best documented analysis available of state enforcement practices and their disclosure. Click here.
  • Pennsylvania's Department of Environmental Protection, unlike most states, provides an easily accessible, searchable database of notices of violation for individual companices. To access the search home page, click here. For an analysis of 2012 data, and challenges in their interpretation, see a Fractracker evaluation here.
  • The Groundwater Protection Council promotes information development and sharing among state regulators, as described here. GWPC's report on several decades' regulatory experience in Texas and Ohio is available here.
  • Well by well disclosure of most chemicals used for hydraulic fracturing is provided at the website http://fracfocus.org, managed by the Groundwater Protection Council.
  • The Center for Responsible Shale Development is a multi-stakeholder project of companies, environmental groups and others that has begun to publish best practice principles for shale energy development. CSSD's goal is promoting independent third party verification of corporate implementation of these practices. See here.
  • Resources for the Future published a detailed analysis, based on surveys, describing areas of stakeholder consensus regarding the risks associated with shale energy operations of greatest concern and deserving the most attention. See here.