Damon van der Linde
Shareholder Association for Research and Education
FOR IMMEDIATE RELEASE
INVESTOR CAMPAIGN TARGETS OIL & GAS COMPANIES FOR FAILING TO DISCLOSE WATER RISKS
Letter backed by $6 trillion investor coalition is sent to over 30 companies calling for increased water-related disclosure through CDP
TORONTO, MONDAY DECEMBER 3RD, 2018 – A group of institutional investors representing US$6 trillion in assets today announced the launch of a campaign to promote sustainable water resource management in the oil & gas sector.
In Canada, the Shareholder Association for Research and Education (SHARE) is collaborating with the US-based Interfaith Center on Corporate Responsibility (ICCR) and its members to ask 30 North American oil and gas companies to disclose key information about their water-related risks by responding to the CDP Water Questionnaire. The CDP is a global organization that requests annual environmental data disclosure from companies and is backed by 639 investors globally with over US$69 trillion in assets.
As the impacts of climate change on water resources become more pronounced, the oil and gas sector faces serious challenges connected to water use. The U.N predicts that there will be a 40% shortfall in the global water supply by 2030, placing increasing pressure on companies that use water-intensive extraction processes such as hydraulic fracturing (fracking) and oil sands mining. The wastewater produced in extraction and refining processes requires safe management and disposal, and in some regions the growing volumes of wastewater are posing increasing costs and logistical challenges. The sector is facing heightened exposure to physical, regulatory, reputational and financial water-related risks which have the potential to disrupt operations, increase capital expenditures and operating costs, and limit revenue growth.
“As water resources become increasingly constrained due to overconsumption, pollution and climate change, companies that treat water risks as a current strategic challenge and manage this resource sustainably will be better positioned in the future,” noted Laura Gosset, senior analyst at SHARE (Shareholder Association for Research and Education). “Conversely, companies that ignore these challenges put themselves, their shareholders, and importantly, the planet and its people at risk.”
CDP offers a standardized and comparable water framework that enables investors to benchmark performance in the oil & gas sector based on the following key management behaviors:
- Transparency: Does the company respond to requests for information via CDP?
- Governance: Does the company have board-level oversight of water issues?
- Measuring and monitoring: Does the company regularly measure and monitor all water aspects?
- Risk assessment: Does the company conduct a comprehensive risk assessment at the river basin level across its direct operations and supply chain?
- Targets and goals: Has the company set or achieved targets and goals that reflect a company-wide commitment or strategy?
- Supply chain engagement: Does the company request that key suppliers report on water use, risks and management?
Companies that report through CDP send a clear signal to investors that they are strategically measuring and managing water-related risks.
AltaGas (TSX: ALA) and Imperial Oil (TSX: IMO) are among the Canadian companies that have received the letter. These companies already respond on an annual basis to another questionnaire issued by the CDP on climate change; however, disclose very little about their water use and wastewater management. Many other Canadian companies already respond to the CDP Water Questionnaire, such as Suncor Energy, Arc Resources, Canadian Natural Resources, Tourmaline Oil and Crescent Point Energy.
The investors have asked for a response to the letter by January 5, 2019.
About SHARE (Shareholder Association for Research & Education)
SHARE is a Canadian leader in responsible investment services, research and education for institutional investors. Since its creation as a non-profit organization in 2000, SHARE has provided proxy voting analysis, shareholder engagement, education, policy advocacy, and practical research on issues related to responsible investment. SHARE’s clients include pension funds, mutual funds, foundations, faith-based organizations and asset managers across Canada. www.share.ca
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 48th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $400 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. www.iccr.org