Two U.S. shareholder groups that together have more than $130 billion in investor assets on Tuesday called for more transparency by natural gas operators that use hydraulic fracturing (fracking).

The Investor Environmental Health Network (IEHN) and the Interfaith Center on Corporate Responsibility (ICCR), which are “committed to social and environmental justice,” issued “Extracting the Facts: An Investor Guide to Disclosing Risks from Hydraulic Fracturing Operations,” which they said was in response to “growing public concern” and mounting fracking moratoriums in some municipalities.

“There have been numerous incidents of poorly constructed wells, equipment failures, degraded local and regional air quality, water contamination, strained community relations and related government enforcement actions and private lawsuits,” the report said. “Transparency requires full disclosure of steps being taken to minimize risks, acknowledgment of challenges and failures, and clearly defined steps to continually improve operations.”

The ICCR represents 300 member organizations with more than $100 billion in assets, while the IEHN is a group of investment managers and advisers with assets totaling more than $30 billion.

“Many companies are moving on their own, but…how they compare with other companies is difficult to tell right now because disclosure is inadequate,” said IEHN Executive Director Richard Liroff, lead author of the report. No company “is doing it uniformly well.” He said “genuine transparency requires them to fully disclose the steps they are taking to minimize risks, to acknowledge their challenges and failures, and to clearly define the methods they will use to continually improve operations.”

The guide offers a “road map for companies to respond to the heightened concerns around fracking and articulates industry best practices that will reduce the risks, and consequently, the impacts.”According to the shareholder groups, the guide followed “long-term investor dialogues with key corporate players in the energy industry and, in several cases, draws on policies and practices currently in use by energy companies.”

Liroff said the information also could serve as a resource for companies to respond to the Security and Exchange Commission’s growing interest in the environmental risks from fracking operations and to assist companies that want to implement a Department of Energy advisory panel recommendation to “adopt a more visible commitment to using quantitative measures as a means of achieving best practice.”

Steven Heim of Boston Common Asset Management said as questions about fracking have mounted, gas companies have called for more clarity about what to measure and what to report. The guide, he said, is an attempt to streamline those requests and provide a comprehensive reporting framework.

“Since 2009 shareholders have filed 21 resolutions at 16 different companies, including Cabot Oil & Gas Corp., Chesapeake Energy Corp., Chevron Corp., ExxonMobil Corp. and Range Resources Corp. to address the risks of hydraulic fracturing,” Heim said. “The votes have been remarkably strong and signal significant and growing investor concern about companies’ management of shale gas risks.”

Ithaca, NY-based Park Foundation, which supports education and public broadcasting, in May urged ExxonMobil’s board to analyze the potential impacts of fracking and implement policies to reduce environmental risks, and CEO Rex Tillerson faced a barrage of criticism about fracking at the company’s annual meeting (see Shale Daily, May 27). The Park proposal was rejected with 72% in opposition, according to a shareholder vote, but the board said ExxonMobil “is committed to operating in an environmentally responsible manner.”

A similar measure about fracking was submitted for a vote at Chevron’s annual meeting in San Ramon, CA, earlier this year. The measure was voted down by shareholders, but it received support from more than 40% of those voting.

Green Century Capital Management’s Larisa Ruoff said that while industry “often claims business risks are minimal and community concerns are unfounded, explosions, contamination incidents and millions of dollars in fines are clear evidence that many things can and will go wrong until the proper safeguards are put in place.”

ICCR Executive Director Laura Berry acknowledged that there is “evidence that natural gas is a cleaner, less expensive energy source but recent experience underscores the need for hyper-vigilance around extractives operations. This guide addresses our obligation as investors to extract the facts now lest we and communities pay the price later.”