As The Energy Mix Weekender reported Sunday, the sudden, unexplained loss of $500,000 in confirmed funding has left The Resilience Institute (TRI) scrambling to decide which front-line projects and staff jobs will be affected.

“We’re going to have to back out of several relationships. We have commitments to communities. We have commitments to staff,” Laura S. Lynes, TRI’s president and CEO, told The Energy Mix. “We have at least four multi-partner initiatives where we have committed to coming to the table with staff, and in some cases with funding, to do multi-year project work in small, rural and Indigenous communities across Canada. That’s the work that is at risk.”

We don’t just take money from anybody. We enter into relationships very consciously. And this has thrown us.

– Laura S. Lynes, president and CEO of The Resilience Institute

Some of those projects involve front-line research with Indigenous communities in Treaty 7 territory in southern Alberta, and in the heart of oil-sands extraction in the Regional Municipality of Wood Buffalo. Lynes said she’s heard of several other charities that received similar treatment, but their boards are afraid to speak up.

TRI’s programming portfolio includes:

• Stories of Resilience, a “thematic learning program” to collect stories of climate resilience that can “change our hearts and minds” and “if shared, have the potential to change futures”

• Front-line, multi-year climate-resilience initiatives with several Indigenous communities and groups across Canada, including many in Alberta such as Fort McKay First Nation, in Wood Buffalo where Suncor operates and Piikani Nation in Treaty 7, where Suncor’s head office is located,  as well as coastal communities in Atlantic Canada

• Roots for Resilience, a national  partnership with the Canadian Red Cross to reduce vulnerability to climate disasters in small, rural and Indigenous communities by bringing climate adaptation and disaster-risk-reduction strategies together

• A review of community housing, poverty and insurance in a changing climate that is partly supported by the Canada Mortgage and Housing Corporation

• A program on nature-based climate solutions that uses the ecologically and culturally significant plant sweetgrass “as a connector between partners”

The chronology of a breakup

When the Canada’s Clean50 newsletter brought the story to a wider audience earlier Friday, executive director Gavin Pitchford wrote that TRI – recipient of the Clean50’s 2025 Project of the Year award – “has been ghosted by Suncor Energy, their substantial multi-year promised funding cancelled without any warning.”

Suncor Energy Foundation (SEF) cancelled the pledge “after it was due and without an explanation,” Pitchford added, and “with some not-so-veiled threats from Suncor’s lawyers who suggested that complaining publicly would be ‘flying too close to the sun.’”

Lynes traced the chronology of the breakup in a LinkedIn post last week, and in a more detailed interview Friday evening. “I had hoped not to have to share this information, but our charity has experienced an unexpected setback that we have been unable to resolve,” she began. “The intent in sharing this information is to ensure that the consequences of this setback do not reflect on our good reputation with Indigenous and rural communities, or with the many academic, corporate, and other institutional partners that we have the privilege to collaborate with.”

More than five years ago, TRI began accepting funding from SEF, a separate legal entity set up by Calgary-based Suncor Energy, Canada’s second-biggest oil-sands company.

At the time, TRI thought it was working with a like-minded partner. “We don’t just take money from anybody. We enter into relationships very consciously. And this has thrown us,” she told The Energy Mix.

Following a strategic review in early 2024, shortly after fossil industry veteran Rich Kruger took over as Suncor Energy CEO, SEF “assured us that our work aligned fully with their updated funding priorities,” Lynes wrote on LinkedIn.

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Several past grant recipients saw their relationships with the foundation end at that point, but TRI was invited “to submit a renewal for a three-year term and a total of $900,000, emphasizing the importance of long-term planning.” That pledge was approved in March 2024, and TRI received a first instalment of $400,000 shortly afterwards.

TRI was supposed to meet with its Suncor Foundation representative in December. After multiple attempts to reach them, the charity sent in its annual written update, then got back “this very strange request for more information, but it was almost like a form,” Lynes recalled. “It didn’t have anything to do with our update . . . it just seemed like a witch hunt, to be honest.”

Among the questions on the form, shared with The Energy Mix, Suncor asked whether any TRI senior leadership or board members received consulting or professional fees from the organization, and whether any current or former SEF staff had received “any personal benefit” from the charity.

“The question was not did we contact any SEF staff. It was whether there was any direct or indirect benefit to any Suncor Energy staff,” Lynes said. “And of course it was no. Of course not. We’re a national, registered charity. We follow the rules.”

After TRI filled out and returned the questionnaire, SEF cut ties. Weeks after a second instalment on the pledge was due in April 2025, “we were informed that our work no longer aligned with SEF’s strategy and no further funding would be provided,” Lynes wrote. “We had not received any explanation for this abrupt shift from full alignment to none. While we understand that things change and relationships break up, we also believe that how you break up matters.”

Suncor’s reputation for ‘trust-based’ philanthropy

Before long, TRI learned that other charities and post-secondary institutions, not all of them working in the climate space, had received similar treatment. “The concern is, quite honestly, that it’s not just about us,” Lynes said. “Suncor was known for its trust-based philanthropy. They were leaders in it. And the way they’re behaving? Corporations don’t do that.”

Even if Suncor’s strategy changed that quickly and drastically, “why not just pay out the charities?” Lynes asked. “Five-hundred-thousand dollars for them is a rounding error, and it was a commitment. So I don’t see how they could get in trouble for paying that out.”

TRI has no legal recourse because the funding was a pledge, not a contract. The purpose of that legal distinction, Lynes explained, is to protect individual donors or small businesses that make commitments in good faith but legitimately can’t follow through when circumstances change.

We are in the business to make money and as much of it as possible, and everybody starting with me needs to see how they do that.

– Richard Kruger, CEO of Suncor Energy

“It is not there to protect billion-dollar corporations that can pay a pledge,” Lynes said. “They’ve used that clause to get out of [their commitment], and that affects others.”

Sources have told The Energy Mix that Suncor has fired all the foundation’s former staff except for one administrator. The senior adviser responsible for TRI’s funding, Dani DeBoice, announced on LinkedIn in November 2024 that her 10-year stint at Suncor had come to an end.

A warning not to fly ‘too close to the sun’

After receiving only minimal responses to two lawyers’ letters to SEF, the second one “maybe a bit nicer than a demand letter,” Lynes said she issued two LinkedIn posts – one on the TRI page, the other on her own professional profile – that explained the situation without calling Suncor out by name. “We are shocked to learn that one of our major donors has informed us of a decision to renege on a multi-year pledge,” she wrote. “We had no advanced warning, no chance to prepare. It is our understanding that many other charities across Canada are suddenly experiencing the same circumstance from this same donor. The corporation is known for its integrity and business ethic so, we are hoping that they will do the right thing.”

The two posts received just a handful of responses.

“It is not ok to turn your back on commitments, period. Especially with charities and even more appalling is with a charity that works with communities (Indigenous and non-Indigenous),” wrote TRI board member Justin Bourque, president and founder of Fort McMurray–based Âsokan Generational Developments. “I hope they realize this and do the right thing.”

“A poignant analogy and reminder, Laura,” wrote former SEF executive director Laurie Hewson, in response to Lynes’s personal post on the situation. “How to transition well, and with minimal impact to others, is something for all of us to be reminded of.”

“This is appalling, Richard Kruger,” added communications consultant Sofi Papamarko. “Do the right thing and donate $900,000 of your nearly $40-million annual salary to The Resilience Institute to make good on your promises.”

That’s when things got heated.

“Within 24 hours, their lawyer called our lawyer,” expressing concern about the institute’s social media activity, Lynes recounted. “Our lawyer said, ‘Are you talking about two posts that don’t even mention Suncor or SEF?’ And their lawyer said it’s a small community, and people can make inferences.”

When TRI responded that Suncor was fretting over its reputation when this was a matter of integrity, “the lawyer said we want you to know that your client is on our radar and they’re flying too close to the sun. End of conversation.”

“We were very clear in our messaging that we do not have any interest in making them look bad,” Lynes told The Energy Mix. “We have an interest in making sure this circumstance does not reflect poorly on our reputation and on us financially. What I would really love to see is for Suncor to say, ‘We made a mistake, we’re sorry, here’s the funding, and we all move forward in good ways.’ Maybe somebody made a mistake. But to double down on that and be defensive . . . who does this to charities?”

A month after he took over as CEO in April 2023, Kruger made it clear that Suncor’s operating philosophy was about to change. “I consider myself to be reasonably decisive and very competitive,” and “I play to win,” Kruger told analysts in May. “We are in the business to make money and as much of it as possible, and everybody starting with me needs to see how they do that.”

Suncor, which reported $1.6 billion in profits on record production for the first three months of this year, has not responded to a Friday-afternoon email and voicemails to its media team from The Energy Mix, requesting comment for this story. Suncor Energy Foundation sent an auto-reply indicating it can’t reply to all queries.

Suncor’s website still brags about the more than $24 million SEF distributed in 2023, and the more than $284 million it handed out in the 25-plus years since its inception. “The Suncor Energy Foundation (SEF) believes in connecting business and community strengths to make a positive difference in society,” the website states. “Through partnerships and relationships with those who are seeking solutions, we aim to spark change and propel progress for generations ahead.”

But a link to the foundation’s 2023 contributions report no longer points to the actual document. A link to its voluntary employee donations program, SunCares, states that “due to changes to the Competition Act, pending regulatory guidance, this document is provided for historical information purposes only and does not constitute an active or current representation of Suncor Energy Inc. Suncor fully disclaims any liability for the use of such information for any purpose.”

That was a reference to new anti-greenwashing provisions that prompted the Pathways Alliance, of which Suncor is a member, to scrub all messaging from its website after legislation passed Parliament in June 2024. Lawyers representing anti-greenwashing organizations have repeatedly responded that companies won’t face any pushback if they just tell the truth about their activities, and the federal Competition Bureau confirmed last month that the legislation allows any marketing claims that aren’t false.

Mitchell Beer is the founding publisher of The Energy Mix.

This article was first published by The Energy Mix. It has been edited to conform with Corporate Knights style. Read the original story here. 

The post Suncor abruptly cancels funding for Canadian climate-resilience charity appeared first on Corporate Knights.

While this move will not be popular among environmentalists, I expect it will please some investors, who would like to wring as much money as possible from these fossil fuel assets before they become stranded. 

Kruger’s walk-back away from clean energy comes after the CEOs of Shell and BP made similar moves. The former Imperial Oil CEO came out of retirement in May only to steer the company “back to being a good old-fashioned oil company,” as Western Standard noted. Suncor had already divested from solar and wind assets last year, reportedly to focus on hydrogen and renewable fuels. Now Kruger has made it clear that the company is returning to its oil sands roots. 

Why the change in tune? The fickle price of oil.  

A few years ago, when Western Canadian Select was trading at US$12 per barrel, oil companies were professing their commitment to clean energy; now it’s at US$56, down from a high of more than US$100 last June.  

It’s hard to find anyone willing to bet serious money that high oil prices will persist as a decadal trend – there are too many forces of disruption dampening long-term structural demand for oil. Given the situation, an oil company has two choices: it can focus on fundamentals, juice profits to the max and give the money to shareholders as the company disappears into the sunset, or it can leverage its various forms of capital to plow these proceeds from old energy into the new energy that will dominate the near future, reinventing itself to own and thrive in the low– carbon future. 

Not that long ago, this is exactly what Mark Little (the CEO of Suncor at the time), was calling for, noting in an article he co-wrote for Corporate Knights that making advanced materials (including lightweight carbon fibres) from the rich feedstock that is bitumen could “quadruple the revenue from Alberta’s current bitumen output.” 

With Big Oil incumbents bailing on clean energy, it will be up to other sectors and entrepreneurs to accelerate the energy transition and reap the rewards of leading the low– carbon economy, one that’s already rivalling – and will soon dwarf – fossil fuels.  

Let’s cheer them on and let’s stop wasting time by giving Big Oil a seat at the tables where we make important decisions about our future, starting with the COP28 climate summit in Dubai in November. More than 600 oil and gas lobbyists registered for last fall’s summit. 

It’s bad enough that this year’s summit is being chaired by an oil company executive. Let’s at least keep the rest of the dinosaurs out.  

The post Suncor is turning its back on a clean energy future; let’s turn our backs on them appeared first on Corporate Knights.

But although Canada is heralded as having one of the most ambitious prices on carbon in the world, rising from its current $40 per tonne to $170 by 2030, Suncor and other large industrial emitters pay only a tiny fraction of it.

That’s because Ottawa and most provincial governments grant heavy exemptions to a number of sectors, including oil and gas, chemicals, cement, steel and mining. That is not unusual: California and the European Union, which both have carbon markets, also give free credits to carbon-intensive sectors to protect them from foreign competitors who don’t pay a carbon price, and to stop factories from simply moving abroad.

However, with growing urgency to cut emissions, experts say the degree to which Canada – the world’s fourth-largest oil exporter – shields companies is threatening its climate targets.

It’s like wagging your finger with a cigarette in your hand, saying, ‘You shouldn’t smoke, kid!’

-Dave Sawyer, principal economist at the Canadian Institute for Climate Choices

Nearly 70 countries have implemented some form of carbon pricing, and, since 2019, every province in Canada has levied a carbon price through both a fuel charge and an output-based pricing system for large industries. Provincial governments can implement their own or, if they fail to do so or are found to lack ambition, resort to a federal backstop regime instead.

But generous exemptions mean that how much of a firm’s actual emissions are taxed varies widely by province, and, on average, companies end up paying for only 16% of the carbon actually produced. In an analysis prepared for the government in 2020, the Canadian Institute for Climate Choices (CICC), an influential Ottawa-based research group, found that the rate companies are charged as a result – the so-called average carbon cost – ranges from as high as $25.60 to as low as $1.80 per tonne, depending on the province – a far cry from the full carbon price.

Suncor, the oil and gas sector’s largest emitter, estimates that it paid $59 million in compliance costs in 2020, before using offsets – or an extra 16 cents on every barrel of oil it produces (Canadian oil prices have averaged between $27 and $80 per barrel over the past 15 years). Put another way, its average carbon cost was roughly $2.10 per tonne, about one-14th of the full carbon price. Canadian drivers, for instance, paid $30 per tonne (or 6.6 cents per litre) for the gas tax at the pumps that same year.

“The balance sheet impact is really, really low,” says Dave Sawyer, principal economist at the CICC. “It basically doesn’t signal that you need to change your production model very much.”

Companies are also driven to lower their carbon footprints by the money they can make through saving emissions and selling the resulting credits to others who are short of their compliance obligation. But this price signal – known as the marginal cost – merely nudges firms to make incremental emissions cuts, rather than the big investment decisions that will move the dial in the long run.

“They aren’t the kind of incentives that will motivate breakthrough innovation or decarbonization,” says Aaron Cosbey, an economist and senior associate at the International Institute for Sustainable Development, a think tank based in Winnipeg, adding that the low price signal also means carbon costs are not filtering down through the value chain.

Suncor and several top emitters in other sectors, including steelmaker ArcelorMittal Dofasco and chemicals producer NOVA Chemicals, did not respond to requests for comment for this story. A spokesperson for cement producer Lafarge Canada said the company could not disclose its own carbon cost and defended the current regime by pointing to the risk of carbon leakage – when stringent climate policies mean emitters move to other countries.

Although that concern is the main reason for the generous exemptions granted to industrial emitters, experts have questioned how the government evaluates trade sensitivity in the first place. A report by Canada’s Ecofiscal Commission found that Alberta’s oil sands operations, for example, face lower trade exposure than virtually every other industry in the province. Nevertheless, the CICC found that Canada’s oil and gas producers have among the lowest average carbon costs of any sector. This contrasts with producers in some other oil-rich countries, like Norway, which makes its oil companies pay a carbon tax on top of the EU’s emissions market.

They aren’t the kind of incentives that will motivate breakthrough innovation or decarbonization.

-Aaron Cosbey, economist and senior associate at the International Institute for Sustainable Development

Plenty of critics say the issues plaguing carbon pricing boil down to a single flash point: politics. They argue that provinces resenting the federal government’s hand in their affairs have been given generous leeway in designing their own systems – sometimes falling short of the federal benchmark but waived through nonetheless.

“They have very much handled the provinces with kid gloves,” says Chris Bataille, an associate researcher at the Paris-based Institute for Sustainable Development and International Relations.

In some cases, provinces have also rolled back more ambitious schemes. In Alberta, the United Conservative Party scrapped the system put in place by the one-term NDP government in favour of its own after winning power in 2019, rewarding higher-emitting plants in the process and saving companies $330 million in 2020 compliance costs, according to the administration’s own estimates. Similarly, Ontario’s repeal of its emissions system in 2018, when the Progressive Conservatives were elected, was projected to cost the province’s budget $3 billion over four years.

Saskatchewan, Ontario and Alberta have even challenged the federal carbon-pricing regulation all the way to the Supreme Court, although judges ultimately sided with Ottawa.

The federal government has said it will widen coverage of carbon pricing in some provinces when it updates the regime’s benchmark criteria in 2022. It is also suggesting provinces tighten the performance standards that determine free industrial allowances and have undermined the average carbon cost to date, according to Sawyer – but without actually mandating they do so.

“It’s like wagging your finger with a cigarette in your hand, saying, ‘You shouldn’t smoke, kid!’” he says. “These large emitter programs need to be cleaned up.”

This is where Canada’s ambition in decarbonizing heavy industry is seen to be lagging behind others, specifically the EU. Brussels revised its carbon market in 2021, making sure – among other things – that a higher share of free allowances is removed from the system each year to tighten the screws on carbon-intensive companies.

“There’s been no movement in Canada towards that yet,” says Sawyer.

A spokesperson from Environment and Climate Change Canada said in an email that the government expects its updated benchmarks “will create a strong incentive to reduce emissions” and pointed out that it is currently reviewing the system for large emitters, including options for raising its contribution toward the country’s climate goals.

They have very much handled the provinces with kid gloves.

-Chris Bataille, associate researcher at the Institute for Sustainable Development and International Relations

Even critics of the current system point out that carbon pricing isn’t Canada’s sole strategy for cutting emissions. Other federal policies, from methane regulations to clean fuel standards, are also working to cut greenhouse gases. The government also announced at the COP26 climate summit that it plans to mandate emissions reductions on oil and gas emissions by 2025, though details of how it will work are still scant. And some observers believe the Liberals’ fall re-election victory and the recent Supreme Court judgment will strengthen Prime Minister Justin Trudeau’s hand on climate policy going forward.

“The federal government is now in a much stronger position in any negotiation,” says Kathryn Harrison, a professor of political science at the University of British Columbia. “They’re in the driver’s seat.”

But the prime minister still has to contend with heavy opposition from some provinces after decades of consensus-based politics on environmental issues. He also faces another stumbling block: the lack of similar policies in the U.S., Canada’s largest trading partner and the destination for many of its exports, including oil.

Although the Biden administration is pursuing more ambitious climate policies, the country still lacks industrial carbon pricing outside of California and Washington or other policies that would mean Canadian companies facing a higher tax at home would not be disadvantaged.

One solution, which is already pursued by the EU, is a carbon border adjustment – a tax on imports that would allow the government to charge domestic companies the full carbon price while protecting them from foreign competition. It would also refund the carbon tax on exports to keep domestic products competitive in global markets.

While carbon border taxes are complex to put in place and politically explosive, Canada may not have many other options if it wants to get serious about cutting emissions, according to Cosbey.

“Let’s face it – they’ve got to do something,” he says. “The status quo is unsustainable.”

Yannic Rack is a journalist based in London. He writes about climate change and the environment.

The post Canada’s biggest emitters are paying the lowest carbon tax rate appeared first on Corporate Knights.

“If that doesn’t tell you a story about how the math has changed, nothing will,” says Andrew Grant, the head of Oil, Gas and Mining at Carbon Tracker, a London-based not-for-profit think tank that researches the impact of climate change on financial markets. “I think it’s become very clear that the world is different now.”

The contours of that new world were mapped out in BP’s 2020 Energy Outlook, which the company released in mid-September. Gone was its bullish scenario from the previous year’s forecast that suggested oil demand could rise to 130 million barrels per day by 2040. Instead, it thought the best that oil producers should hope for is that demand levels recover to approximately 100 million barrels per day and flatline there for the next decade or so. But in both its “rapid” and “net-zero” scenarios, where climate policy is adopted around the world to varying degrees of ambition, demand falls off much more rapidly.

BP’s net-zero scenario made headlines around the world for suggesting that demand for oil has already peaked, and the company is acting like it believes that will happen. In addition to announcing that it will reduce its oil and gas production by 40%, it also pledged to cut its refining output by 30% within 10 years, all while shifting approximately one third of its new investments to low-carbon energy.

BP isn’t the only European oil and gas company that has recently announced a shift toward a lower-carbon business model. In April, Royal Dutch Shell committed to reaching net-zero emissions by 2050, with CEO Ben van Beurden noting that “global society, overall, may have until around 2060 to reach net-zero emissions. But Shell recognizes that it stands within a section of society that needs to move faster. And so that is what we intend to do.” France’s Total SE has also pledged to eliminate greenhouse gas emissions associated with its operations by 2050, while Italy’s Eni went even further by committing to hitting that target by 2040. But BP’s pledge to reduce its actual production, rather than simply eliminate the greenhouse gas emissions associated with it, is a major step forward. “It’s been a bit of an arms race, or so it seems, over the last year or so,” Grant says. “And BP has really jumped into the lead in that race.”

“It’s been a bit of an arms race, or so it seems, over the last year or so, and BP has really jumped into the lead in that race.”

–Andrew Grant, head of Oil, Gas and Mining at Carbon Tracker

Here in Canada, though, the race has been slower to get underway. Take Enbridge, which has one of the biggest renewable energy portfolios in Canada. In a June piece in the Financial Post, CEO Al Monaco said his company would take a “gradual” approach to increasing its exposure to renewable energy, which currently makes up approximately 5% of its total assets. Large companies like Suncor, Cenovus, and Canadian Natural Resources have all signalled their intention to reach net-zero emissions by 2050, but they haven’t fleshed out how they’re actually going to do that. Instead, there’s been a lot of hand-waving toward technological innovation and the ability of the industry to rise to challenges, with a focus on things like improved extraction processes and the replacement of coke-fired boilers with higher-efficiency cogeneration units.

These are the sorts of improvements that have helped drive the per-barrel emissions associated with oil-sands production down by 21% between 2009 and 2017. But they haven’t prevented the industry’s overall emissions from rising, as soaring production has swamped these efficiency gains. For all the recent talk about low-carbon innovation, some industry watchers point out that Canadian oil companies haven’t really taken any meaningful risks yet. Suncor, for example, recently announced a $15-million investment in LanzaJet, a new venture that will make lower-carbon jet fuel and renewable diesel; the company also added $50 million to the $76.3 million it had already invested in Enerkem’s biofuels. But those figures are only a fraction of Suncor’s revised 2020 capital budget, which is expected to range between $3.6 and $4 billion.

“I think our pseudo-national oil companies are the least innovative national oil companies in the world,” says Sean Collins, founder of Terrapin Geothermics and an Energy Futures Lab fellow. “Even your Saudi Aramcos of the world are putting billions of dollars into direct renewables, and we’re nowhere to be seen.”

“I think our pseudo-national oil companies are the least innovative national oil companies in the world.”

–Sean Collins, Energy Futures Lab fellow

The idea of reducing production, rather than just the emissions associated with it, to meet net-zero goals remains largely taboo among industry leaders. When asked by the Financial Post back in February if his company would consider letting its production decline in the face of growing environmental concerns, Suncor CEO Mark Little said, “We don’t think that’s a solution.” By June, however, Little had written an op-ed in Corporate Knights stating that energy companies are “best positioned to invest in and lead energy transformation,” noting that “now is the time to take a big step forward.”

Canadian companies have yet to really take those steps – or undertake the same transformations that are proving profitable in Europe. In November 2017, for example, Italy’s ERG received €270 million for selling off its share of a joint venture that included 2,600 service stations and a minority stake in an oil refinery. That completed its transition from a company that owned refineries, pipelines and gas stations to one that invested primarily in wind, solar and hydroelectric projects – and since then, its shares are up nearly 50%. Earlier that year, Denmark’s Ørsted (formerly the Danish Oil and Gas Company) completed a similar transformation by selling its oil and gas business to petrochemical company Ineos for €$1.05 billion. Its shares have more than doubled since then. And the value of an investment in Finland’s Neste, which began as that country’s state oil company but has built a growing fleet of renewable diesel plants in recent years, has tripled over the same period. By comparison, the S&P Commodity Producers Oil & Gas Exploration & Production Index has been cut in half.

That sort of pivot would be harder to make for Canada’s oil and gas companies, which have many decades worth of reserves on their books (and nobody to sell them to). But they may not have to pivot as aggressively as their European peers. Instead, they could tap into those reserves and put them to uses other than combustion, from the creation of high-strength carbon fibre (which can displace steel) to the production of lower-carbon blue hydrogen. “That feels like a much different proposition than getting into solar or wind,” says Jamie Bonham, the director of corporate engagement at NEI Investments. “It feels like something that’s more in their wheelhouse.”

But if Canada’s oil and gas companies aren’t keeping up with the European supermajors, they’re at least ahead of their peers south of the border. The climate pledges of large integrated companies like ExxonMobil and Chevron are conspicuously modest, while the ones made by shale producers are effectively non-existent. Canadian oil companies have largely accepted the nature of the challenge and the need for tools like carbon pricing to help meet it. “The existence of this trajectory is something that’s no longer a debate,” Bonham says. “That puts the industry in a better place than its U.S. peers.”

Husky Energy, for example, recently announced that its executives will now be paid in part based on how effective the company is at achieving its target of reducing greenhouse gas emissions by 25% by 2025. “The conversation is beginning to occur in Canada,” says Janet Annesley, Husky’s senior vice-president of corporate affairs and human resources. Meanwhile, the relatively concentrated nature of Canada’s industry, both in terms of the number of companies and the geographic footprint of the assets they control, gives it an edge when it comes to deploying new technology. “When you have the world’s second-largest oil resource in one place, and projects that have a 30- to 50-year lifespan, you have the ability to focus on finding those solutions – versus some of the shale plays that are much shorter in life-span and are more dispersed and make the cost of applying those solutions so much greater,” Annesley says. “They can’t even really capture their methane down there because they don’t have the pipeline network.”

The big question now is whether those Canadian companies will take advantage of these relative strengths or squander them if and when oil prices recover. “The Canadian companies will say the words,” says Collins. “But do they believe it in their souls – that it’s the future? Because if you don’t, then as soon as prices rise again it’s back to your comfort zone.” Even if they continue moving in the right direction, Bonham worries that it’s not fast enough. “I feel like they’re on the right path, and they’re attacking some of the right issues. But it’s not entirely clear to me that the urgency of the moment is being fully embraced.”

Max Fawcett is a freelance writer and the former editor of Alberta Oil magazine.

Big Oil’s clean investments are still small fry

With oil companies committing to net-zero targets, Corporate Knights decided to follow the money to see exactly how much has been allocated to low-carbon investments so far. We tallied spending in R&D, capital expenditures, acquisitions and other investments (including joint ventures and share purchases in other companies). Here’s how it breaks down:

What % of their investments were clean in 2019?

BP: 0.77%
Chevron Corp.: 0.0%
Exxon Mobil Corp.: 0.0%
Royal Dutch Shell: 0.07%

Total SE: 0.0%

METHODOLOGY: Investments were determined to be clean if they corresponded with the Corporate Knights Clean Revenue Taxonomy. General commitments and future-oriented pledges were not included. If investments were spread over multiple years (e.g. a wind farm being built over three years) and the annual investment was not disclosed, the total investment was divided by the years the project would take to complete, determining an approximate annual expenditure. If no financial data was available, the investment value was marked as $0. All companies were contacted to verify the numbers.

The post Big oil, small ambition appeared first on Corporate Knights.

Alberta Innovates – a Crown agency – says the biggest opportunity lies in the production of carbon fibre, a high-strength material that can be used in wind turbines, automotive applications and the aerospace industry. The agency has launched a $15-million “Grand Challenge” in which 20 laboratories around the world are participating in research to commercialize the production of carbon fibre from the heavy asphaltenes contained in bitumen, in the so-called bottom of the barrel.

“We are finding new ways to use bitumen not as transportation fuel but as value-added non-combustion materials that are worth more than transportation fuel but with a low GHG emissions – products like carbon fibre,” said John Zhou, vice-president of clean resources at Alberta Innovates.

Zhou participated Wednesday in a virtual roundtable hosted by Corporate Knights and the German embassy in Canada, part of a series on rebuilding a cleaner, more sustainable economy as we recover from the COVID-19 pandemic.

He said that while technological challenges remain “very, very significant” to a commercializing bitumen-derived carbon fibre industry, progress is being made.

There are skeptics, however. Wolfgang Seeliger heads up Leichtbau BW, a German consortium of companies developing and deploying lightweight materials that reduce costs and greenhouse gas emissions in transportation and industrial processes. He said that carbon fibre production cannot compete with other lightweight materials on either cost or environmental footprint, noting that it takes more energy to produce auto parts from carbon fibre, for example, than is saved by the use of the lighter material.

Alberta Innovates estimates that diverting 30% of oil-sands production to industrial uses would reduce GHG emissions by 126 megatonnes (Mt) a year. That’s because the carbon from the thick, asphalt-like component of the bitumen would be locked in the industrial material, rather than combusted as transportation fuel or petroleum coke.

It also estimates the industry could earn $84 billion by 2030 from those industrial markets – including $44 billion from carbon fibres – while reaping $27 billion from the sale of the remaining crude.

However, the “bitumen beyond combustion” strategy would not lower emissions from oil-sands extraction and processing in Alberta. The sector currently produces more than three million barrels per day. It accounted for 77 Mt of GHG emissions in 2018, or 10.5% of the country’s total.

Canada has pledged to reduce GHGs by 30% from 2005 levels by 2030, and the federal Liberal government now says it will introduce an even-tougher 2030 goal along with its commitment to get to net-zero emissions by 2050.

Seeliger said carbon fibre will be relegated to a niche market for some time because carbon fibre is expensive and its introduction into markets like automotive, construction and aerospace will require complicated changes to certification standards. However, Zhou said the opportunities will expand dramatically if the province succeeds in driving down the cost and the environmental footprint of producing it. Alberta Innovates believes industry can reduce the cost of producing carbon fibre by more than 50% below that of current methods and reduce the carbon intensity of production by up to 90%. It estimates that a 50% cost reduction in carbon fibres would boost demand tenfold.

Suncor’s Carrie Fanai said Wednesday that Canada’s largest oil and gas producer is focused on the “need to transition to a greener economy.” Suncor has pledged to reduce the emissions intensity of its oil and petroleum products by 30% by 2030, while other companies, notably Cenovus Energy and Canadian Natural Resources Ltd., have set “aspirational” goals to have net-zero emissions at their oil-sands plants.

“For us at Suncor, that has meant not only focusing on improving the GHG intensity of our existing production but looking at new products, energy sources and related lines of business,” said Fanai, who is the company’s lead on bitumen value-chain optimization.

She noted that it is still early days in the journey to commercialization and that producers will have to work with chemical companies and manufacturers to ensure they maintain focus on potential customers.

Marcelo Lu, president of BASF Canada, said the opportunities for carbon fibre “are very large if we can crack the innovation to take the impurities out of the bitumen stream,” which is heavy in sulphur and metals. He said the massive bitumen resource represents a high concentration of low-cost feedstock for carbon fibre that could drive market developments in a way not seen before.

Alberta Innovates hopes to see a commercial-scale demonstration plant for producing carbon fibre from bitumen by the end of 2024.

If it succeeds in reducing the cost of production, the province could produce 326,000 tonnes per year of carbon fibres from the asphaltenes contained in one million barrels per day of bitumen, which would be worth an estimated $44 billion annually in today’s prices, the agency estimates. It says there is also potential to produce activated carbon and asphalt binder from the asphaltenes in another two million barrels per day of production.

The total value of the “non-combustion” products would be $84 billion. At the same time, industry would sell higher-quality crude, “de-asphalted” oil for $27 billion. Total value: $111 billion a year, compared to the $27 billion a year the sector expects to earn by selling three million barrels a day at $25 per barrel.

As part of its Build Back Better series last spring, Corporate Knights recommended that the federal government provide $1.4 billion in funding over five years to help the industry commercialize carbon-fibre production. Environmental groups have called for an end to subsidies for the fossil fuel industry, arguing that government efforts should be focused on the transition off oil.

Shawn McCarthy writes on sustainable finance and climate for Corporate Knights. He is also senior counsel for Sussex Strategy Group.

With the support of the Embassy of the Federal Republic of Germany in Canada.

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Dear Minister Bill Morneau,

As leaders of major corporations in Canada, we are focused on our country’s safe road to recovery. Canadians are experiencing significant economic hardship because of the COVID-19 pandemic – challenges that will continue for months and possibly years.

Around the world, countries have adopted unprecedented policies during this crisis. Canada’s federal and provincial governments have acted boldly and creatively with their emergency relief measures, with positive results. However, for a full-scale recovery, even bolder action will be needed.

We have the opportunity to emerge from this moment with a resilient economy that creates prosperity for more Canadians. We will get there by working together with all the industries that have led us to where we are as a nation today — from natural resources to telecommunications, manufacturing and financial services. We must build on and reinforce that foundation to set us up to thrive in the future. To get there, we must leverage our strengths and invest in our most promising assets that align with growing global markets. Canada already has a competitive advantage in four of them: low-carbon natural resource commodities, zero-emissions vehicles, smart buildings, and sustainably produced food. All are poised for explosive growth going forward.

On the natural resources front, Canada is a treasure trove for the low-carbon commodities that the world needs to decarbonize, and we are among the most carbon-efficient producers of those commodities. It’s well-known that we are the fourth largest oil producer in the world. It’s less well known that our vast supplies of bitumen are uniquely suited for producing carbon fibre for strong, lightweight materials that would be the top choice for manufacturing electric vehicles, and a host of other applications if we can crack the cost nut. Canada also generates more renewable electricity than any country except China, which creates a path for us to be a supplier of choice for the growing clean hydrogen market. In addition, Canada has an abundance of bio-based natural resources, the waste residues of which are ideal feedstock for renewable jet fuels, a market which is taking off.

On the vehicle front, we are a top-five exporter by value globally and a top-five producer of the minerals that are essential for battery production. We have the resources and industrial ecosystem to be a North American hub for battery production and zero emissions vehicles, including freight trucks and buses.

Looking at buildings, Canada is one of the world’s largest commercial landlords. Twelve of the top 50 real estate investors in the world are based in Canada, and we are recognized as global leaders in green building. With green renovations taking centre stage in recovery packages across the globe, Canadian real estate investors possess the know-how and property tech required to surf this long-term wave.

In food, Canada is the world’s fifth-largest agricultural exporter and is number one in pulses. By restoring soil carbon, we can feed a growing global appetite for sustainably sourced food, including plant protein.

If we invest in these tangible markets, it would also be a shot in the arm for Canada’s financial services and technology sectors. Toronto Finance International estimates there’s potential to grow annual revenues in low-carbon banking, insurance and investment by $110 billion in the next five years.

All of these markets are fast-growing but in a state of flux. Whether Canada becomes a supplier or a buyer in the coming decades depends on our decisions today.

Doing this will not be easy. It will require a significant burst of investment in the first couple of years buttressed with complimentary policies over the next five. Some will raise concerns about the costs, but if we learned anything from the last economic crisis, it’s that austerity is not a growth strategy, rather it leads to lost opportunities for people and businesses alike. Other countries have learned this lesson, and Canada’s industrial competitors will be investing boldly: South Korea is structuring its economic recovery plan as a “Green New Deal,” and the European Union is allocating 25% of its proposed €750 billion recovery package to green projects and strengthening connectivity networks.

We also recognize that building back better is an opportunity for all Canadians to work together. We need to engage broadly. This means forming meaningful partnerships with Indigenous communities in terms of equity ownership, employment, and procurement, and it also means breaking down systemic barriers that for too long have disproportionately held back women and people of colour.

Now is the time to be courageous and bold. We encourage governments to lead a collaborative and bold economic recovery building on the strengths of our existing economy and talent to capture the growth markets of the future.

As corporate leaders, we are committed to doing our part to build back better towards a more resilient — and inclusive — economy.

Sincerely,

Mike Andrade, CEO, Morgan Solar

Céline Bak, President, Analytica Advisors

Brian Bentz, CEO, Alectra Inc

Guy Bourbonnière, Vice President Trane Commercial HVAC – Eastern Canada, Trane Technologies

Christine Bergeron, Chief Member Services Officer, Vancouver City Savings Credit Union

Erica Brabon, Director, Energy & Sustainability, Black & McDonald

Kim Caron, President, Executive Mat Group

Jim Colthart, Chairman, C³ Global Technologies, Inc.  &  EnerSysNet Canada Inc.

Guthrie Cox, President, View Canada

Mike Crawley, CEO, Northland Power Inc

Darren Entwistle, CEO, Telus Corp

Jason Fitzsimmons, Chief Corporate Affairs and Customer Care Officer, Hydro One Ltd

Sabrina Geremia, Country Manager, Google Canada

Mike Gerbis, CEO, The Delphi Group

Michael Gonsalves, President, Carrier Enterprise

David Grinstead, CEO, Signify Canada

Anthony Haines, CEO, Toronto Hydro Corporation

Toby Heaps, CEO, Corporate Knights Inc.

Gord Hicks, CEO, BGIS

Matt Jamieson, CEO, Six Nations of the Grand River Development Corporation

Gord Johnston, CEO, Stantec Inc

Philippe Jetté, CEO, Cogeco Communications Inc

Faisal Kazi, CEO, Siemens Canada

Melissa Kennedy, EVP, Chief Legal Officer & Public Affairs, Sun Life Financial Inc

Laura Kilcrease, CEO, Alberta Innovates

Mark Little, CEO, Suncor Energy Inc

Marcelo Lu, President, BASF Canada

Karn Manhas, CEO, Terramera

Alex Lau, VP, Golden Properties Ltd

Don Lindsay, CEO, Teck Resources Ltd

Michael McCain, CEO, Maple Leaf Foods Inc

Carol McGlogan, CEO, Electro-Federation Canada

Dermot McMorrow, General Manager – HVAC Division, Mitsubishi Electric Sales Canada Inc.

Paul Mertes, CEO, Circuit Meter

Terri Lynn Morrison, Director of Strategic Partnerships, Indigenous Clean Energy

Thomas Mueller, CEO, Canada Green Building Council

Derek Nighbor, CEO, Forest Products Association of Canada

Nathalie Palladitcheff, CEO, Ivanhoé Cambridge

Josipa Petrunić, CEO, The Canadian Urban Transit Research & Innovation Consortium (CUTRIC)

Gregor Robertson, EVP, Nexii

Bill Strohecker, Country Managing Director, ABB Power Grids Canada

Sandra Stuart, CEO, HSBC Bank Canada

Ralph Torrie, President, Torrie Smith Associates

Susan Uthayakumar, CEO, Schneider Electric Canada

Nadeem Velani, EVP & CFO, Canadian Pacific Railway Ltd

Annette Verschuren, CEO, NRStor Inc.

Anthony Viel, Managing Partner and Chief Executive, Deloitte Canada

Tamara Vrooman, CEO, Vancouver City Savings Credit Union

Rob Wesseling, CEO, The Co-Operators

Dan Wicklum, CEO, The Transition Accelerator

Casey Witkowicz, CEO, RYCOM

Mary Ann Yule, CEO, HP Canada

Supportive quotes from business leaders

“The notion of ‘flattening the curve’ with coronavirus has taught us a valuable lesson when faced with a serious risk: act now or face dire consequences. It’s a similar warning with climate change, a seemingly slower moving problem when compared to COVID-19, but just as urgent for the present and future health of people and the planet.  This is why I believe investing in a bolder green initiatives is important.”

–Susan Uthayakumar, president, Schneider Electric Canada

We believe this crisis is an opportunity to reset our country’s assumptions, and to build a lower-carbon economy that also provides jobs and wealth for more people. That’s why Vancity is supporting Build Back Better. We believe a strong, prosperous economy requires strong local communities. As a member-owned, values-based financial institution, we’ve always put the needs of people and communities first. We believe that’s more important now than ever before.

–Christine Bergeron, incoming Interim CEO, VanCity

The post Open letter from business leaders calls for bold green recovery appeared first on Corporate Knights.

This story is more than 50 years old, a story of how the oil sands came to be an economically viable global scale resource development and Canadian success story. If we now focus on the low-carbon growth opportunities staring us in the eye, it could also be our future.

While Canadian oil and gas will remain a significant part of the global energy mix for some time, we have to take advantage of new opportunities that offer attractive growth prospects. The temporary economic lockdown triggered by the 2020 pandemic is giving us a glimpse into a not-too-distant future where the transformation of our energy system could disrupt demand on a similar scale. Disruption breeds opportunity and forward-looking companies and countries will need to step up and lead.

Now is the time to take a big step forward. As the history of the oil sands reveals, disruption and transformation are nothing new for Albertans and we’re optimistic that the Canadian energy industry is up to the challenge and best positioned to invest in and lead energy transformation.

Here’s why. The oil and gas industry is one of the largest markets for, and potentially investors in, clean technology in Canada.  The challenges faced by the sector, combined with an entrepreneurial culture and the motivation to thrive in tomorrow’s low-carbon economy provides a wealth of opportunity for clean technology investment by the sector. Canada needs to ensure these opportunities aren’t ignored.

Companies like Suncor not only conduct extensive internal technology development, they also monitor and invest in technologies developed by others. Consider Suncor’s partnership with Enerkem, which turns household garbage into biofuels. In addition to an equity investment, Suncor seconded a dozen operations experts. Working together, in the first month, Enerkem produced more cellulosic ethanol than it had in its history, demonstrating the potential for the energy industry to provide innovative technologies and processing expertise to help scale renewable production.  It’s partnerships like these that combine the expertise from different sectors that will lead to breakthroughs, significant growth opportunities and provide the greatest opportunity for Canada to succeed on the world stage.

Canada has an abundance of bio-based natural resources, the waste residues of which are ideal feedstock for biofuels. Beyond biofuels, there are other significant growth opportunities where we have all the ingredients needed to win on the world stage.

For example, the carbon density of Canada’s bitumen reserves make it uniquely suited for advanced manufacturing and materials processes that could create billions of dollars in additional value. Foremost among these Bitumen Beyond Combustion opportunities is carbon fibre, a strong, lightweight material increasingly important for producing lighter vehicles (including EVs) and building materials that store rather than emit carbon in their fabrication. Asphaltene makes up 15 to 20% of bitumen and is the feedstock for making carbon fibres. If we can figure out how to do this affordably at scale, it has the potential to quadruple the revenue from Alberta’s current bitumen output. Alberta Innovates estimates the added economic potential of carbon fibre, activated carbon and asphalt binder alone could be in the range of $84 billion annually.

The seeds for all of these ideas have already been planted in Alberta, nurtured by the Energy Futures Lab, Alberta Innovates, some leading energy companies and other collaborative efforts. It shows what’s possible when we seek common ground and use past and current strengths to build what the future requires of us. Those who can learn from the past are empowered to win the future.

Now is the time for the federal government to support disruptive innovation in the same spirit as the Alberta Oil Sands Technology and Research Authority (AOSTRA), which was launched in 1974 and made technological breakthroughs that unlocked hundreds of billions of dollars of value from the oil sands in subsequent decades benefitting all Canadians.

Three points to keep in mind:

1. Think big: Focus investments on disruptive technologies that can unlock value in global growth markets where Canada has a competitive advantage.
2. Empower a local public agency to get results: Fully fund an independent public agency to work with industry and academics to bring production of low-carbon options such as hydrogen, renewable jet fuel and carbon fibre to commercial scale.
3. Establish meaningful partnership with indigenous communities: This is the right thing to do, and the only way that large-scale projects will happen.

As we emerge from the COVID-19 crisis, the same approach that helped unlock the economic potential of the oil sands decades ago can now be reimagined to drive progress to the low-carbon growth markets of the future, leveraging the natural resources, highly skilled workforce and industrial infrastructure already found in regions that produce oil and gas.

We cannot predict the future, but we can shape it.

Mark Little is president and CEO of Suncor Energy Inc.

Laura Kilcrease is the CEO of Alberta Innovates.

The post Canada’s oil sands are best positioned to lead the energy transformation appeared first on Corporate Knights.

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They were there as part of the inaugural CK-Schulich Business for a Better World Case Competition. Having made it through two previous rounds, which whittled down a pack of 28 participating MBA teams, it came down to the final three – the Palumbo Donahue School of Business at Duquesne University in Pennsylvania, the Monterey Institute of International Studies at California’s Middlebury College and the Stockholm School of Economics in Sweden.

“To have got this far is a great compliment to you and the work you’ve done,” said Suncor chief executive Steve Williams before he and his fellow judges announced the winner. “Just for reassurance, I will take pieces from each of your presentations and they will be part of our plan of execution, and that is the greatest respect I can pay you.”

In addition to Williams, the judging panel included Dominic Barton, global managing director of McKinsey & Company; Robert Greenhill, managing director of the World Economic Forum; former State Street Global Advisors chief investment officer Sean Flannery, now vice-chairman of Corporate Knights; and Nicky Major, global corporate sustainability leader for Ernst & Young. Rounding out the panel was professor Dirk Matten, the Hewlett-Packard Chair in Corporate Social Responsibility at the Schulich School of Business at York University in Toronto.

Teams were required to assess Suncor’s global business operations, which are heavily weighted towards the oil sands, using the same 12 key performance indicators that Corporate Knights uses to determine its annual Global 100 Most Sustainable Corporations in the World ranking. They then had to identify which of the 12 were priority indicators and come up with a business plan that would turn Suncor into a top sustainability performer.

Given the location and high profile of the judging panel, all three teams entered the competition room a little nervous. When the clock started on each of their 10-minute presentations, all were impressively composed. But it was the professional touch from Team Stockholm – composed of Karin Bratt, Anja Huber, Johannes Julius Meder and Christopher Royle – that won over the judges.

Team Stockholm argued that Suncor should invest more into attracting diverse talent to its executive ranks. Reducing the gap between CEO and average worker compensation was highlighted as another way to up its score in the short term. The ratio, currently at 113:1, should be brought to within 30:1 and 50:1 to stay in line with top sector players, the team said.

Also, boosting investment in innovation was cited as crucial to improving Suncor’s resource productivity score – particularly related to energy use and emissions – over the longer term. “The competition was very well organized, and we very much appreciate the valuable feedback we received in the final stage,” said the team’s Christopher Royle.

Team Duquesne received $4,000 for second place, while third place Team Monterey was rewarded with $2,000. The prize money came from Suncor, which was the competition’s case sponsor. It was a close call for all three. For example, some judges were particularly impressed with the sophisticated sensitivity analysis (using the “Ginzu” model of firm valuation) carried out by Team Monterey.

The team looked at three scenarios – from business as usual to the International Energy Agency’s New Policies Scenario – to map out at what point it would be in Suncor’s financial interests from a future cash-flow perspective to divest from the oil sands altogether in favour of more profitable alternative energy.

Their answer: sometime between 2026 and 2038.

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