Contact: Lucia von Reusner, Green Century Capital Management, 617-482-0800, firstname.lastname@example.org
June 2, 2015: Concerned by the industry’s failure to manage risks associated with hydraulic fracturing (‘fracking’), shareholders put pressure on WPX Energy to disclose how it is managing its impacts on communities and the local environment at the company’s annual shareholder meeting on May 21st. WPX Energy scored near the bottom of the industry in a recent scorecard report published by investors benchmarking 35 companies on their disclosed efforts to mitigate key impacts, and has faced controversy in the past over allegations that it irreparably contaminated local drinking water in Pennsylvania. Shareholders voted on a shareholder proposal filed by Green Century Capital Management concerning the company’s fracking risk management practices and disclosure. The shareholder proposal received support from a third of the shares voted in favor and against the proposal, according to data just released by the company.**
“Companies that fail to manage their impacts on local communities and the environment are putting their social license to operate at risk, and are demonstrating a level of inattentiveness that shareholders should be concerned about,” noted Lucia von Reusner, Shareholder Advocate for Green Century Capital Management, the environmentally responsible mutual fund company that filed the shareholder proposal with WPX Energy. “Without greater disclosure from WPX demonstrating that it is managing its fracking impacts, shareholders and the public have to assume that WPX is either unaware of or simply ignoring key risks associated with this controversial activity.”
Hydraulic fracturing operations are a heavy industrial activity that typically use millions of gallons of water mixed with toxic chemicals to drill each well, and have continued to generate significant public controversy for polluting water and air quality. Of particular public concern are the high volumes of water that fracking uses in water-stressed areas, as well as the industry’s high rates of leaked methane—a greenhouse gas 86 times more potent than carbon dioxide over a 20-year time frame.
“Despite growing scientific evidence and public concern about the risks of fracking, the industry is failing to clean up its act,” stated Leslie Samuelrich, President of Green Century Capital Management, one of the firms that co-authored the report. “The industry’s refusal to be transparent and responsive about these risks puts the environment, local communities, and long-term shareholder value at risk,” added Samuelrich.
In the recent scorecard report published by investors benchmarking the industry on its disclosed risk management practices, WPX Energy received just 3 out of 35 points—in the bottom 20% of all companies ranked. The shareholder proposal specifically requests that WPX Energy provide quantitative reporting on its progress towards reducing key environmental impacts, such as methane leakage, water consumption, toxic chemicals, waste, and community concerns. Green Century reports that WPX Energy has made no effort to contact the shareholders to discuss these concerns.
A coalition of shareholders concerned about the industry’s poor risk management practices has been filing shareholder proposals with specific companies raising these concerns since 2010, each year receiving consistently high support from around 30% of shares voted, on average. This year the coalition filed shareholder proposals with six companies—WPX Energy,* Chevron,* ExxonMobil,* QEP Resources,* SM Energy,* and Chesapeake Energy Corporation* urging greater disclosure about how key fracking risks are being managed. These proposals went to vote at WPX Energy, ExxonMobil, Chevron, Chesapeake, and QEP Resources. The shareholder proposal at WPX received support from 33% of shares voted in favor and against the proposal.
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Green Century Capital Management is an environmentally responsible investment advisory firm that manages two fossil fuel free mutual funds – the Green Century Balanced Fund and the Green Century Equity Fund. Founded by a partnership of non-profit environmental advocacy organizations in 1991, Green Century Capital Management provides people who care about a clean, healthy planet the opportunity to keep their money out of environmentally irresponsible companies and use the leverage of their investment dollars to encourage environmentally responsible corporate behavior.
*As of March 31, 2015, no securities mentioned were held in the portfolios of the Green Century Funds. The holdings of the Green Century Funds may change due to ongoing management of the Funds. References to specific investments should not be construed as a recommendation of a security by the Funds, their advisor, administrator, or distributor.
**The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation.
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