"Sustainability is about striking a balance between opportunity and risk. Businesses and economies are at risk if we fail to meet society's rising expectations for our performance."

Businesses and economies are at risk if we fail to meet society's rising expectations for our performance."

"Sustainability is about striking a balance between opportunity and risk. Businesses and economies are at risk if we fail to meet society's rising expectations for our performance."

Businesses and economies are at risk if we fail to meet society's rising expectations for our performance."

Suncor is helping create well-paying jobs, promote economic growth in Canada and provide governments and suppliers with valuable revenues.

Economic

Suncor's economic performance infographic

“Sustainability is about striking a balance between opportunity and risk. Businesses and economies are at risk if we fail to meet society’s rising expectations for our performance.”

– Steve Williams, president and CEO

Strong economic performance, social responsibility and environmental stewardship is foundational to being a sustainable energy company. What follows is a high-level overview of our economic management approach.

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Our strategy

We aim to deliver competitive and sustainable returns to shareholders by focusing on:

  • capital discipline
  • operational excellence
  • long-term profitable growth
  • leveraging our competitive differentiators

Our management approach to economic risk is to mitigate negative impacts while enhancing positive impacts, where possible. We also continue to execute well on our strategy which focuses on:

Capital discipline

Strong cost management, focusing on core assets and investing in projects that deliver the best possible returns are all examples of creating value for every dollar spent.

Our $4.8 to $5.2 billion capital spending plan for 2017 reflects a reduction of approximately $1 billion from 2016 as the Hebron and Fort Hills spending begins to wind down.

Operational excellence

We strive to continuously raise the bar on operational performance through consistently applied standards and principles. In 2016, for example, our refining facilities achieved 93% and Syncrude utilization was 102% of nameplate capacity in the fourth quarter of 2016, compared to 73% in the prior year quarter. Our Oil Sands base upgrader averaged more than 90% utilization when adjusting for the impact of the forest fires in the second quarter of 2016. Operational excellence is also about becoming a more sustainable energy company. Every barrel of water conserved and every emission reduced means lower input costs and supports our social licence to operate and grow.

Profitable growth

Our focus is on smart, profitable growth. Our Fort Hills mining project, for example, continues to be on schedule, with construction more than 76% complete at the end of 2016.

Read more about our growth plans and capital spending

Read more about our vision and strategy

Download our 2016 Management’s Discussion and Analysis (PDF, 54 pp., 267 KB)

We also ensure that the management of economic risks by joint venture partners and subsidiaries are in line with our vision and strategy.

Policy

We have adopted several policies related to economic performance. These include:

  • competition
  • accounting reporting and business control
  • business conduct
  • enterprise risk management

Our strategy leverages our competitive differentiators and paves the way for us to unlock our company’s full potential for the benefit of our employees, shareholders and stakeholders. We strive to profitably operate and develop our oil sands resources, optimize value through integration, achieve industry-leading unit costs in each business segment and be an industry leader in sustainable development.

Implementation of our Operational Excellence Management System (OEMS) across the entire enterprise is a key example of continually improving the reliability and performance of our assets. This means integrated and consistent standards, processes and procedures that reduce risk and enable continuous improvement.

For more information on our business strategy, growth projects, performance, financial goals and objectives, visit Suncor’s Investor Centre.

Additional policies and practices include:

We also have specific practices in place related to local supplier selection. Regional development clauses are in place with suppliers and in contracts across all businesses, and sourcing documents often have criteria that evaluate suppliers on Aboriginal or local content. Additionally, our common practice is to post local contract and supplier opportunities on regional organizations’ websites such as Regional Economic Development (REDlink) and Northeastern Alberta Aboriginal Business Association (NAABA). This is to ensure local businesses and suppliers are the first to be aware of opportunities in their region.

Commitments

We are committed to a mission, vision and values which guide our business decisions.

Strong economic performance, along with social responsibility and environmental stewardship, is part of being a sustainable energy company. Our investment in energy production, upgrading, refining and marketing benefits the economy by:

  • creating well-paying jobs
  • promoting economic growth
  • providing governments and suppliers with revenues

Development of our core assets also allows us to invest in our renewable energy business and in new technologies to improve company-wide operational efficiency and environmental performance.

In all of these ways, we continue to create value – for our shareholders and society at large.

Goals, targets and actions

We are committed to five enterprise-wide value-driving goals:

  • continue to advance our journey to operational excellence
  • improve maintenance and reliability across Suncor’s operations
  • accelerate progress on Suncor’s culture and workforce performance
  • generate and sustain industry-leading returns
  • achieve long-term sustainability goals

For information about how we delivered on these goals in 2016, download our 2016 Annual Report (PDF, 136 pp., 3 MB) and see pp. 7-9.

Technology investment

Our strong balance sheet allows us to invest in new technologies, for potential use to reduce carbon emissions, water use and the overall environmental footprint of our business. In 2016, Suncor spent more than $150 million to support research and development of technology across the corporation. These investments include technologies to improve the efficiency of bitumen extraction from the oil sands, while reducing carbon intensity.

Read more about our latest developments in technology

Community investment

Through the company and our private, non-profit charitable organization, the Suncor Energy Foundation, we provide targeted investments intended to help communities near our operations grow, thrive and become sustainable. In 2016, our community investments totalled approximately $34 million.

Read more about our community investment strategy

Responsibilities, resources and training

Our senior management team is responsible for delivering significant growth while maintaining operational excellence, led by our president and chief executive officer Steve Williams.

Our senior executive compensation program is designed to support and reinforce Suncor’s value drivers:

  • continue to advance Suncor’s journey to operational excellence
  • materially improve maintenance and reliability
  • accelerate progress on Suncor culture and workforce performance
  • generate and sustain industry-leading returns
  • achieve long-term sustainability goals

More information about compensation programs can be found in our 2017 Management Proxy Circular (PDF, 111 pp., 888 KB)

Resources and training

  • We have had a comprehensive anti-bribery compliance program in place since 2012. The program includes training, contractual protections, audits and third-party contractor prequalification.
  • We conduct an annual business conduct compliance program with employees, contract staff and directors, who must review our business conduct policies and make an affirmation respecting policy compliance during the preceding calendar year.
  • In light of the current crude price environment, Suncor has reduced the size of our workforce and implemented a number of directives around discretionary spending to continue to drive a sustainable, cost-conscious culture across all levels of the organization. This cost-conscious culture will not deter our focus on safe, reliable and environmentally sound operations; these areas are critical to the long-term viability and success of Suncor.
  • Read more about our standards of business conduct code

Results and evaluation

Our integrated business model, along with a relentless focus on cost reduction and operational discipline, delivered financial, operational and strategic achievements over the course of 2016.

We continued to demonstrate:

  • industry-leading, discretionary free cash flow* from our integrated model and a strong focus on execution
  • emphasis on capital discipline by maintaining a strong balance sheet, with a decreasing net debt balance while steadily increasing the return of cash to shareholders

Our strong economic performance allows us to invest in profitable growth and continuous improvements in our existing operations, despite an uncertain oil price environment. The ripple effects of that investment are felt across the North American economy and well beyond.

Financial performance information is included in our 2016 annual disclosure documents.

Read about our economic performance

What we are doing differently

Read about our growth plans and capital spending

* Non-GAAP financial measure. Please see the Advisories.