Governments, industry, environmental organizations and the broader public would probably agree that the past year has been a watershed when it comes to conversations about the environment, economy and social wellbeing.
It certainly has been for us at Suncor. As we’ve navigated a prolonged period of low oil prices, we’ve had to be resilient and adaptable. We’ve also had to think hard about what our vision of a “triple bottom line” really means in an era when our industry — and the world around us — is being called upon to address significant economic, social and environmental challenges.
Suncor’s vision guides us on taking a long view on these challenges — one that extends well beyond the next quarterly or annual results — to one that considers our role in getting to a low carbon energy future.
Our vision is one of the key reasons I’ve been so active in the conversation about reducing greenhouse gas (GHG) emissions. I believe in climate change and that the production and consumption of fossil fuels is contributing to this pressing global challenge. I also believe we all have the opportunity — and responsibility — to collaborate on effective solutions.
Climate change is happening. Doing nothing is not an option.
It’s also clear to me that energy is central to our lives. It provides mobility, heats our homes and schools, and generates jobs and economic growth. And while alternative and renewable energy sources continue to advance, fossil fuels — including oil produced from the oil sands — are expected to remain a key source of reliable and affordable energy for the foreseeable future.
The need to address these parallel realities is why I strongly support the work of Canada’s Ecofiscal Commission, where I serve as a member of the Advisory Board. This collaboration has brought together representatives from across the political spectrum and from many diverse sectors, including academia, industry and the environmental community.
The Commission strives to take partisanship out of the discussion and to move us towards meaningful conversations on our shared energy future. And it starts with the premise that the economy and the environment are closely intertwined.
We can’t have a healthy economy without being leaders in environmental performance. And we can’t have a healthy environment without a healthy economy.
The Commission was an early and vocal advocate for putting a broad-based price on carbon. It’s the kind of pricing regime, combined with an overall emissions limit for the oil sands industry that the Government of Alberta introduced in November 2015 that will set the pathway for both – a healthy economy and a healthy environment.
I was pleased to play a part in some of the discussions leading up to Alberta’s Climate Leadership Plan, along with other oil sands executives and environmental organizations. It was another example of how people who are too often locked into a polarized debate can come together to find common ground.
I believe the Alberta framework provides a positive path forward. It allows our industry to grow, but not in an unlimited way. It will help accelerate the investments in technology and innovation required to bend our emissions trajectory downward. And it ensures that one of the world’s largest oil-producing regions will also be a global leader in addressing the climate change challenge.
This past year, I also had the opportunity to join the Canadian delegation to the United Nations climate change conference in Paris in December 2015 and to work in a collaborative way with our federal environment minister, several premiers and prominent environmentalists.
In Paris, I spoke with a wide variety of individuals, including some long-time critics of our industry. Overall, I was pleased by the positive perception many delegates had of the Alberta climate change framework and of carbon-pricing policies undertaken by other provinces.
In all of these encounters, I learned that what divides us is not nearly as important as what unites us. Whether you are a politician, an environmental activist or an energy executive, we all basically want the same things – a strong economy, a healthy planet and a positive legacy for our children and grandchildren.
Leading by example
In addition to effective collaboration, Suncor aspires to lead by example. In 2009, we set an industry precedent by adopting “stretch” environmental performance goals on water consumption, reclamation of disturbed lands, energy efficiency and air emissions for completion in 2015. Now, we are launching long-term sustainability goals to drive improved performance in two critical areas of our business.
We share in the global challenge to tackle climate change head on by reducing emissions while providing energy the world needs. We’ll therefore work to harness technology and innovation on a transformational pathway to a low carbon energy system. We’ll measure our progress by reducing the overall GHG emissions intensity of our production of oil and petroleum products by 30% by 2030 - a target we believe will put us on the path to ultimately bending the curve on our absolute GHG emissions as well.
The key to achieving this goal is to harness technology and innovation to produce some of the world’s lowest carbon-intensity crude oils and petroleum products. That is why, despite prolonged low oil prices, Suncor continues to:
- spend about $200 million annually on strategic research and development projects;
- collaborate with organizations like Canada’s Oil Sands Innovation Alliance (COSIA) and Evok Innovations on step change technologies to address GHG emissions and other environmental challenges; and
- work closely with joint venture partners to drive improved reliability, safety and environmental performance at operations.
Our other long-term goal — and the first to focus on a social objective — is about building greater mutual trust and respect with Canada’s Aboriginal Peoples by increasing their participation in energy development.
There are wide socio-economic gaps between Aboriginal Peoples and other Canadians and there is a strong public desire to bridge those gaps. As Canada’s largest integrated energy company, we have an opportunity to lead and innovate.
Our social goal, to be pursued over the next 10 years, is focused on four key areas:
- strengthening relationships between Aboriginal Peoples and all Canadians, starting within Suncor;
- partnering with Aboriginal youth to develop their leadership potential;
- significantly improving our hiring, retention and advancement of Aboriginal employees; and
- increasing revenues to Aboriginal businesses and communities through mutually beneficial marketing arrangements and procurement purchases.
Both sustainability goals are ambitious and will be a stretch to achieve. Success is not a given. But even though we don’t have all the answers today, we cannot put off action until tomorrow. It’s better to be bold, and sometimes falter, than to shrink from the challenges at hand.
As we go forward, we’re mindful of the need to be transparent in reporting on our progress. This report is just one example of our commitment. We’re also working with stakeholders to be more transparent about what we’re doing as a company to ensure our resilience in a future low-carbon economy. Our support of a shareholder proposal from NEI Investments relating to ongoing reporting on Suncor’s initiative, respecting climate change, at our recent Annual General Meeting underscores our commitment in this area.
Values and aspirations
Our goal aspirations are rooted in Suncor’s values, one of which stands above the rest: safety first.
Our safety value guided our efforts in responding to the wild fires which occurred in the Regional Municipality of Wood Buffalo this spring. While our assets were undamaged, we took the measure of commencing a staged and orderly shutdown of operations in the area. We also collaborated closely with industry, governments and the community to shelter and then safely move thousands of people out of the region. With the province’s evacuation order lifted, we have since remobilized our workforce and are working closely with the community to support what will likely be a lengthy recovery process.
Another core value is respect for human rights, which is reflected in the collaborative work Suncor and several other companies continue to do as members of the United Nations Global Compact (UNGC) Local Network in Canada. This is part of our support for the UNGC and its 10 Principles, which guide our approach to human rights, labour, environment and anti-corruption — wherever in the world we operate.
Our aspirations and our determination to provide collaborative leadership, are not tied to fluctuations in market conditions or commodity prices. These external forces will always wax and wane. Through it all, we must work to make Suncor an even stronger company and to make this industry truly sustainable. To survive and thrive in the decades ahead, energy producers will need to be competitive, both in terms of operating costs and their carbon footprint.
Building on positive momentum
Today’s energy challenges are embedded in extremely complex systems that have evolved over a century or more. They cannot be tackled in isolation by one company, industry or stakeholder. Developing solutions that work for the economy, environment and society will require the creative energy of some unusual allies.
We have seen positive momentum of late. I don’t believe the debate over the path ahead is nearly as polarized as it was even just a few years ago. We need to build on that momentum to ensure that our shared energy future remains bright and sustainable.
president and chief executive officer