Join GLJ’s Sustainability Sessions as we spotlight four local companies who can help you improve your operations and save money while delivering sustainable solutions. #supportlocal

The Sustainability Sessions spotlights action-oriented companies that pave the way towards more sustainable futures.  Using cutting-edge solutions at all stages of the value chain, GLJ’s virtual presenters outline how their organizations actively support companies to reach ESG and sustainability targets and reduce emissions.

BUZZ IN THE BOARDROOM

Whether within your Governance, Risk, Climate Change, Heath Safety and Environment or Audit Committee, you can bet that your board and executive are discussing and testing the implications of your sustainability strategy, or lack thereof, on the competitiveness and durability of your business.  Disruptive forces including energy transition, cybersecurity and digitalization are top of mind, creating uncertainty and driving change for all industry participants.  It, therefore, shouldn’t be a surprise that GLJ has been engaging on this topic with a wide range of audiences including board members, executives, strategists and engineering, operations and sustainability leaders.

WHAT KEY QUESTIONS KEEP COMING UP?

1. What are our peers thinking and doing?

We can identify three archetypal narratives when it comes to sustainability and ESG.  In the real world, these archetypal narratives overlap, with most companies embracing a combination of views from each; but ubiquitously, Canadian companies are prepared to continue in our tradition of innovation, demonstrating our grit, our talent and our unique style of leadership.

Sustainability strategies, of course, focus principally on long-term performance.  Not long ago CEOs were lamenting the quarter-over-quarter demands of analysts, underscoring an associated sub-optimal focus on the short-term.  Sustainability has flipped this concept on end, providing the opportunity to look out farther and critically assess and prepare for the material risks that might affect our businesses.  There is plenty of evidence in the business literature to support the fact that a longer-term risk-mitigated focus enhances performance.  Of perhaps greater immediate relevance, there are so many synergistic opportunities to improve operational, financial AND sustainability performance – even in the short-term.

Setting aside the divestment movement, which has essentially thrown in the towel on oil and gas in what has been referenced as “a short on human ingenuity”[1], financial stakeholders are tracking ESG metrics and using them to high grade their investment opportunities.  To be sure, return on investment remains the core driver, but ESG comparative assessment has the potential to result in the selection of a particular company, jurisdiction or a sector or industry for investment.  A sound sustainability strategy and ESG story, therefore has the ability to differentiate and attract sustained capital to a business, jurisdiction and industry.

Additionally, as our governments ramp up their support of infrastructure investments, individuals like Dr. Yrjo Koskinen, BMO Professor of Sustainable and Transition Finance at University of Calgary, are working hard to ensure that renewables-only financing via Green Bonds and the like, do not step over and leave behind Canada’s extractive industry.  It will be crucially important for Canada and leaders from our industry to have a seat at the table as this emerging area of Transition Finance unfolds.

Today, it is apparent that the pandemic has provided a period of reflection and, as a result, more companies, spanning the entire energy value chain, are stepping up, ready to “do the right thing” and take action to develop and implement their sustainability strategies.  Notably, since 2010, Canadian oil and gas companies issuing corporate sustainability or ESG reports have increased approximately 8-fold[2].  As companies, regulators and industry grapple with the challenges of getting up to speed in this new area, GLJ provides our clients with the confidence to take appropriate actions, sharing our unique expertise in the evaluation of techno-business opportunities including energy systems and emerging energies, combined with our extensive experience working with industry leadership on their governance, disclosure and assurance mandates.

Canadian Sustainability & ESG Archetypal Narratives

1. Steadfast Role Model

  • We have always been on this path.
  • Canadians are environmentalists with a demonstrative appreciation for and desire to protect our vast natural terrain.
  • Responsible development is a Canadian value, evident in all we do.
  • Our progressive regulatory system is a respected model globally.
  • Alberta is a leader; our 2007 Specified Emitters carbon tax, one of the first of its kind, is point in case.

2. Innovative Survivor

  • “Necessity is the mother of invention”; hardships of the last 10+ years have transformed our operations.
  • Since 2009 for gas and 2014 for oil, we have been necessarily focused on cutting costs, thereby improving our sustainability.
  • In many cases, operating and capital cost reductions of more than 50 percent have been achieved.
  • Amazingly, savings continue to grow as industry continues to find new ways to improve operations, making companies even more resilient and more durable.

3. Enduring Adaptor

  • Now is the time to shed our defensiveness and re-envision challenges as opportunities.
  • We are the incumbent energy industry; who better to tackle the evolution of our energy systems, safely and reliably?
  • We can lead and make real progress towards meeting the demands of society, combining our strengths with digitalization, technology development and entrepreneurship.
  • Adaptation is a requirement, not an option, supported by both current and pending legislation.

2. Yikes, where do we start?

It can be overwhelming to step into the proverbial healing waters of sustainability.  While for most organizations ESG reporting is voluntary, it may come as a surprise that 103 stock exchanges have signed up to the Sustainable Stock Exchanges Initiative and a subset of 25 have mandatory ESG reporting.  The Reporting Exchange, for example, references over 2000 mandatory and voluntary reporting requirements and that’s before we get into specifics on data needs, availability, uncertainty, inconsistency and gaps.

In an effort to capture the perspectives of sustainability and ESG professionals here in Canada, in the fall of 2020, GLJ participated alongside our partners JWN EnergyMark Taylor Associates and Cumulative Effects Environmental in the curation of a survey to industry.  (Hopefully, you participated!)

Consistent with the increase in published corporate sustainability reports, the survey revealed very high degrees of support for ESG initiatives and very good alignment on priorities and initiatives for focus.

When queried on gaps, most respondents focused on:

    •   Perplexity digesting the myriad of standards
    •   Difficulties identifying appropriate metrics and gathering good data
    •   Challenges setting baselines and identifying material issues
    •   Frustrations establishing near term action plans and activating aligned decision-making consistent with corporate strategy
    •   A need for more clarity from regulators
    •   A shortage of human and financial resources

GLJ’s subsequent conversations with industry have underscored a need to bring our techno-business focus to sustainability and ESG action planning and assurance efforts.  Without a sound understanding of both data gaps and technological gaps, sustainability professionals are hard pressed to understand the significance of the challenges at hand and what it will take to move forward.  As such, GLJ’s SASB-and-GRI-credentialled sustainability professionals are available to answer your questions and provide as much horsepower or as little guidance as needed.

3. What’s the right next step for us?

One by one multi-national oil and gas companies and some of our biggest Canadian oil and gas companies are stepping up to the plate to establish net-zero 2050 targets.

On November 19, 2020, our federal government introduced Bill C-12, the Canadian Net-Zero Emissions Accountability Act, with the objective for Canada to achieve net-zero by 2050 and thereby meet our international commitments regarding climate change mitigation.  

Since then, on May 26, 2021, Suncor joined the growing 2050 net-zero cohort establishing a near-term goal to reduce its emissions from 29 megatonnes in 2019 by 10 megatonnes for 2030; the plan is to reduce emissions in their base business while growing their business in renewable fuels, electricity and hydrogen.    

Despite setting goals for 2050 or even 2030, the immediate conundrum of identifying the right next step remains. Each company, of course, will have its own unique material issues, strengths and opportunities to advance  sustainability in real time.

The sustainability wheel below showcases GLJ’s comprehensive sustainability process from data gathering and target setting through to project planning and execution.  While context and an understanding of the overarching process is of sincere benefit, we are finding that a surgical approach is often the right approach when it comes it identifying your next right step; GLJ works alongside our clients offering a deep toolbox, enabling rapid action informed by robust insights when and where needed.

GLJ’s focus along with our deep expertise will empower your team, demystify options and enable rapid next right action to optimize your differentiation in the marketplace.

PLEASE COME AND BE A PART OF THIS IMPORTANT CONVERSATION AT GLJ’S SUSTAINABILITY SESSIONS JUNE 15TH, 2021.

Together we can do better – it’s the right thing!


Published On: June 4, 2021Categories: ESG

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