Our perspective on climate change
The World Business Council for Sustainable Development has framed the 2050 challenge as “nine billion people not just living on the planet, but living well and within the limits of the planet.” The goal of the energy system, in this context, is to deliver to 9 billion people safe, affordable energy that minimizes carbon emissions.
Energy is the backbone of the economy and delivers much of our well-being and high quality of life, in addition to heating our homes and powering manufacturing.
The ability to move goods across the continent to markets and for people to be able to travel and work relies on robust, affordable transportation systems. Given what energy delivers each day, it is critical to maintain the integrity of the physical system and, understanding that energy is also part of a bigger financial and social system, maintain user utility and investor confidence.
There is general consensus that limiting the impact of climate change requires the global average increase in temperature remain below 2°C, relative to pre-industrial levels. Suncor supports the approach outlined in the Paris Agreement to help address the challenge of climate change. It is intended to motivate countries to demonstrate climate leadership through their national commitments and we will continue to support that leadership in the countries where we operate. To achieve this objective, there must be significant advances in technology, a shift in consumer choice and the development of new energy systems, all of which take time.
As the energy system transitions away from carbon intensive sources of energy, hydrocarbon fuels will continue to be needed to help meet global energy demand, particularly in developing economies. All types of energy will be needed and no single solution or pathway will meet the challenge. The pathways to a diversified and robust energy system require embracing, and getting the best out of, both traditional and new sources of energy.
Leadership in climate policy
Suncor operates in multiple jurisdictions across Canada and around the world which requires we work with all governments and political parties, environmental advocacy groups and Aboriginal communities to support the development of policies that ensure cost and carbon competitiveness. We seek to contribute to the development of smart government policy in support of moving towards a low-carbon economy.
Suncor believes a broad-based price on carbon, equitably applied to both energy producers and consumers, is a key mechanism to lower emissions. As Canada’s leading integrated energy company with a significant downstream business through our Petro-Canada brand, we also participate in discussions to inform the development of policy related to the low-carbon clean fuels standard in Canada.
We demonstrate our commitment to support effective, practical and cost-efficient policy design through the following actions:
- Contributing to the development of low-carbon policies such as:
- Pan-Canadian Framework on Clean Growth and Climate Change
- Cap-and-trade programs in Ontario and Quebec (With the announcement of the termination of the cap and trade program in Ontario, Suncor will work with the provincial government to explore solutions that achieve the required outcomes while minimizing impacts to people and business.)
- Clean Fuel Standard in Canada
- Alberta’s Climate Leadership Plan
- Supporting Canada’s Ecofiscal Commission in broadening the discussion of carbon pricing into the realm of practical policy application. The Commission brings together economists to inform the critical discussion about the ecofiscal reform that Canada’s future requires.
- Suncor is a member of the Carbon Pricing Leadership Coalition (CPLC), a voluntary initiative that aspires to catalyze action towards the successful implementation of global carbon pricing. We contributed to the Canadian industry report in 2017.
We believe that good policy will instill confidence in the industry, enable continued prosperity and provide the certainty to help producers responsibly develop resources while also contributing to solutions to address global concerns about climate change.
Advancing the energy dialogue
Transitioning an energy system is as much a social and cultural shift in how people think about and use energy as it is a technological and infrastructure shift. Through the Suncor Energy Foundation, Suncor supports organizations to engage Canadians in meaningful discussions on the energy system and the linkages between the environment and the economy. We’re also working with our Foundation partners to promote an understanding of the changing energy realities of the 21st century and raise awareness among Canadians of the role their choices and lifestyles play in emissions reduction.
Suncor has long held that developing responsible solutions requires engaging with shareholders, environmental organizations, local communities, Aboriginal communities, governments, and industry partners.
For years, we have created spaces for collective dialogue where multiple perspectives, experiences and the best minds may inform Suncor’s approach to sustainable energy development. We do it because we recognize the value of relationships and diverse perspectives and think it’s important to listen and understand other points of view.
We find value in thinking about things differently, and this often leads to new ideas, joint problem solving or new ways of working with our stakeholders.
And while we might not always agree on everything, we do have a common goal – produce energy to improve quality of life and do so in a sustainable way.
Over the past year, we have engaged with stakeholders directly, through consultations, meetings, workshops, and conferences. We will continue these activities as we develop improved climate disclosure and risk management approaches. Expected activities include:
Over the past year, we have engaged with stakeholders directly, through consultations, meetings, workshops, and conferences. We will continue these activities as we develop improved climate disclosure and risk management approaches. Expected activities include a Ceres-facilitated workshop with a set of key stakeholders to solicit feedback on climate action and other sustainability topics, engagement with investors on climate-related financial disclosure, and engagement with the Climate Action 100+ initiative.
The latter is an initiative led by investors to engage with the world’s largest GHG emitters to improve governance, climate-related financial disclosure, and GHG performance.
We look forward to these opportunities to build mutual understanding on the best approach for Suncor to meet its business objectives and address stakeholder expectations.
Task Force on Climate-related Financial Disclosures (TCFD)
Since mid-2017, the TCFD has shifted the discussion on the level of understanding and drive for carbon disclosure. Suncor values disclosure as a foundational activity for investor engagement and believes that the full context is required to provide a complete picture of operational performance, strategic planning and risk management.
Reporting standardization and implementing the TCFD recommendations will be challenging. There are many factors to consider and we believe transparent and decision-useful information will support long-term decision-making.
In our industry, not all crude oils are equal in their level of carbon risk, and production intensities will not remain static over the coming years. Technology and innovation will lower carbon intensity and carbon competitiveness will be as important as cost competitiveness in the future.
We have provided a table below showing the sections of this report that are aligned, fully or in part, with the TCFD recommendations. Over the coming year, Suncor will continue to build our internal capacity to understand potential gaps and identify the best approach to effectively improve our disclosure of climate-related financial information. We are on this journey with the TCFD and other corporate disclosers. Areas of focus for us include:
- Enhancing the analysis and disclosure of the financial impact of risks and opportunities
- Effectively disclosing our processes for climate risk identification and management
- Building on our experience with scenario planning to consider business resilience against a credible 2°C scenario
Disclose the organization’s governance around climate-related risks and opportunities.
- Describe the board’s oversight of climate-related risks and opportunities.
- Describe management’s role in assessing and managing climate-related risks and opportunities.
Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.
- Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.
- Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.
- Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.
Disclose how the organization identifies, assesses, and manages climate-related risks.
- Describe the organization’s processes for identifying and assessing climate-related risks.
- Describe the organization’s processes for managing climate-related risks.
- Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.
Metrics and targets
Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
- Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.
- Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks.
- Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.