Earlier this week, 55 major financial investors with nearly $1 trillion in assets under management announced that they have united to support “best practices” for fracking. These investors signed on to guidelines for reducing risk in oil and gas companies.
Where investors are considering new investments, the guidelines are an important tool to help them evaluate which energy stocks they’ll invest in. In situations where investors already own stock in oil and gas companies, they can use the guidelines to press the companies to improve their environmental practices. If companies don’t improve, investors can “vote with their feet” and sell the companies’ stocks and invest instead in companies with better, less risky practices.
These guidelines revolve around 12 core goals and are a smart move for investors. We hope investors will use them, and that companies respond, but it's important to keep in mind that the guidelines are only voluntary and are not a substitute for strong regulations that apply to all oil and gas companies. Here are the 12 core goals: