GLOBAL - Investors from Australia, Europe and the US with close to $1trn (€790bn) in assets under management have thrown their weight behind best practice guidelines for the shale gas industry's process of fracking, as concerns about drilling problems, regulatory uncertainty and increasing opposition from concerned shareholders mount.

Steven Heim, managing director and director of ESG research and shareholder engagement at Boston Common Asset Management, said: "Assuming hydraulic fracturing is going to continue to be used in some form, investors need to have greater certainty in the marketplace as to industry practices and government regulation.

"Currently, there is no such certainty, and that is really why investors are speaking up. The marketplace has spoken: The best course here for investors, the environment and human health will be if all shale gas extractors wake up, get the message and use these tools to do it right."

The guidelines - 'Extracting the facts: An investor guide to disclosing risks from hydraulic fracturing operations' - is organised around 12 core goals including the following:

• Manage risks transparently and at board level
• Reduce surface footprint
• Assure well integrity
• Reduce and disclose all toxic chemicals
• Protect water quality by rigorous monitoring
• Minimise fresh water use
• Prevent contamination from waste water
• Minimise and disclose air emissions
• Prevent contamination from solid waste and sludge residuals
• Assure best in class contractor performance
• Secure community consent
• Disclose fines, penalties and litigation

Richard Liroff, executive director at the Investor Environmental Health Network, added: "We are encouraging a corporate race to the top in adopting best practices. The best-practices guide backed by major investors offers both currently achievable goals - such as minimising fresh water use - and more aspirational goals - such as virtually eliminating toxic chemicals from fracturing operations.

"The guide cites practices that are already used by 17 companies. Many companies will save money and lower risks, providing business, environmental and community benefits."

Investors are seeking action from the industry due to the increasing level of uncertainty about fracking. 

Examples of the impacts include the following:

• Spreading moratoria and bans compromise development prospects. Recent restrictions on the industry include moratoria in New York State and Delaware River Basin Commission, a moratorium in the Province of Quebec in Canada and outright bans in France and Bulgaria. Shell has estimated that two-fifths of its New York State acreage could be off-limits due to pending rules on fracking in that state. Chevron's exploration license in Bulgaria has been cancelled.

• Inconsistent practices making it impossible for investors to make informed choices. While some companies have voluntarily increased disclosures - particularly around chemicals used in fracking - there is no systematic reporting on risk management and reduction steps, which means investors may lack information critical to evaluating energy companies engaged in shale gas extraction.

• Growing shareholder unrest. Investor concern is evident in high levels of shareholder votes supporting requests for more fracking disclosure. In the 2010 and 2011 proxy seasons, 21 shareholder resolutions at 16 companies received strong support. Most of the remaining resolutions were withdrawn in the course of discussions with companies, which either took positive action or pledged to do so in the near future.

Among the 55 investors supporting the guidelines are APG (Netherlands), the Australian Council of Superannuation Investors, Calvert Investments (US), Catholic Super (Australia), Dexia Asset Management (Belgium), Domini Social Investments (US), Ethos (Switzerland), Governance for Owners (UK), Pax World Funds (US) and Trillium Asset Management (US).