In an era marked by Cape Town’s looming ‘day zero’, the value of water cannot be overstated, and understanding water-related risks is essential for investors.
Canada’s water resources are not immune; climate change, a growing population, and increasing industry demand is expected to increase water stress in Canada. A recent WWF study warns that Canada’s watersheds are facing serious threats from pollution and climate change. In Western Canada, scientists are seeing changes to precipitation patterns and retreating glaciers that could result in more severe water shortages in the prairies.
As the value of water becomes increasingly apparent, companies that use high volumes of water have to account for how they protect and value that resource. For oil and gas companies in particular, understanding water risks should be a priority. Both in terms of water consumption and wastewater disposal, water is a vital part of business operations throughout oil production and refinement processes. Spills can have a detrimental impact local ecosystems and community water supplies, and result in negative media coverage and high costs for cleanup. As water resource availability and quality continue to decline, companies could face greater limits and higher cost for access to freshwater, more stringent regulations for wastewater treatment, or increased potential for conflict with other water users.
That’s why SHARE, on behalf of The Fonds de Solidarité des Travailleurs du Québec (FTQ), has filed a shareholder proposal requesting better disclosure from Canadian company Imperial Oil on its exposure to and management of water-related risks. As one of the largest integrated oil companies in Canada and holding a prominent position in the development of Canada’s oil sands, Imperial Oil could face exposure to physical, regulatory and reputational water-related risks across its business segments. However, Imperial is not providing enough information for shareholders to understand the water-related risks and impacts of its operations and assess whether the company is appropriately mitigating those risks. SHARE has been engaging with Imperial seeking improved transparency in this area since 2016, but we have not seen sufficient progress from the company in improving its management and reporting of water-related risks and so have moved to a proposal.
On April 27th, we will be putting this to a vote at the company’s AGM. We’re asking Imperial to catch up to its peers in producing comparable, comprehensive, meaningful and measurable data on its water risk and management and sending a message to the company that shareholders want responsible management of water in the oil and gas sector.
1]WWF Canada. (2017). Watershed Reports: A national assessment of Canada’s freshwater. Retrieved from http://watershedreports.wwf.ca//#canada/by/threat-overall/profile/