October 16, 2024 /3BL/ - Today, a group of 35 investors representing more than $2 trillion in assets under management or advice sent letters calling on states with significant oil and gas production—Colorado, Louisiana, New Mexico, Pennsylvania, Texas, Utah, and Wyoming—to develop, implement, and enforce plans that meet or exceed federal methane standards to substantially reduce methane emissions stemming from the U.S. oil and gas sector.
The statement’s signatories believe, as prudent and responsible fiduciaries, that climate change poses a significant risk to the economy and business and that eliminating methane emissions will help investors and companies achieve their net zero emissions goals while keeping the oil and gas industry competitive. While recognizing and encouraging the voluntary efforts of leading oil and gas companies, comprehensive and effective regulation is critical to managing climate-related risks and opportunities and creating long-term shareholder value.
According to the statement:
“Addressing methane emissions is one of the fastest, most cost-effective means of limiting climate change, and the oil and gas industry has readily available, cost-effective solutions to significantly cut pollution. In fact, according to the International Energy Agency, around 50% of the sector’s methane emissions can be reduced at no net cost. Additionally, swift implementation of EPA’s standard will reduce oil and gas operator liability under the Methane Emission Reduction Program’s Waste Emissions Charge through the regulatory compliance exemption.”
The statement, organized by Ceres and the Interfaith Center on Corporate Responsibility (ICCR), comes as a recent report found that methane emissions are increasing faster than any other major greenhouse gas—with global levels now 2.6 times greater than before the industrial era. Signatories include major investors such as British Columbia Investment Management Corporation (BCI), KBI Global Investors, Legal and General Investment Management, Maryland State Retirement and Pension System, Mercy Investment Services, Inc., and Seventh Generation Interfaith, Inc.
“There is a strong business case for setting high standards for methane emissions in the oil and gas sector industry,” Luan Jenifer, President and CEO at Miller/Howard Investments, Inc. "Companies that do not accurately measure and effectively manage methane emissions risk their reputations, licenses to operate, and competitive positioning. As investors in the industry, without such standards, we lack systematic and quality data that enables us to better differentiate between industry leaders and laggards.”
“As a long-term diversified investor, we would like to see policies that tackle the systemic risks to our portfolio, such as climate change,” Emma Henningsson, Manager Active Ownership at AP7. “Cutting methane leaks from this industry is one of the cheapest and most efficient ways to reduce greenhouse gas emissions in the short term.”
“Reducing methane emissions is good for the climate and it is ultimately good for the oil and gas sector,” said Andrew Logan, senior director of oil and gas at Ceres. "Customers in Europe and elsewhere are increasingly requiring that LNG importers demonstrate that methane emissions have been addressed. For states that hope to maintain the financial resiliency of their oil and gas industry, and for the investors that own them, addressing methane should be a top priority,”
“ICCR investor members have been encouraged by company actions to better measure and manage methane emissions, which have an outsized role in accelerating climate impacts,” said Christina Herman, Senior Director for Climate Change and Environmental Justice at ICCR. "But recent aerial studies show that emissions across basins continue to be much higher than reported, making the case for direct measurement and strong regulations to level the playing field. The recent deadly flooding in Florida and North Carolina has only added to the list of climate-fueled catastrophes rocking the planet, reminding us that we need to act quickly. Strong regulations are the most efficient way to do that.”
About Ceres
Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable world. United under a shared vision, our powerful networks of investors and companies are proving sustainability is the bottom line—changing markets and sectors from the inside out. For more information, visit ceres.org.
About the Interfaith Center on Corporate Responsibility (ICCR)
The Interfaith Center on Corporate Responsibility (ICCR) is a broad coalition of more than 300 institutional investors collectively representing over $4 trillion in invested capital. ICCR members, a cross-section of faith-based investors, asset managers, pension funds, foundations, and other long-term institutional investors, have over 50 years of experience engaging with companies on environmental, social, and governance (“ESG”) issues that are critical to long-term value creation. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter/X (@iccronline), LinkedIn, and Facebook.
Media Contact: Reginald Zimmerman, rzimmerman@ceres.org, 617-247-0700 ext. 136