Canadian Natural Resources

CNR has targets to reduce scope 1 and 2 emissions intensity for its oil sands and thermal operations by 25% by 2025 compared to 2019, and by 100% by 2050. It also aims to reduce its absolute methane emissions by 50% by 2030 compared to 2016. Further, CNR aims to reduce absolute scope 1 and 2 emissions for all operations by 40% by 2035 compared to 2020 levels. However, its current targets do not cover any scope 3 emissions. CNR should set long-term decarbonisation targets for 2050 or earlier, covering all emissions, with interim targets to incentivise near-term action on its long-term goals.

The company reports spending USD 70 million on “greenhouse gas (GHG) emissions reduction technology”. However, it does not disclose the breakdown of this total spending. It was therefore not possible to assess if the reported amount was spent on low-carbon technology and the maturity level of the technology the company invested in. Moreover, the reported amount still does not meet the sectoral-level expectation that at least 77% of total research and development (R&D) investments should be dedicated to low-carbon technologies.

CNR reports relying on “emerging technology” such as direct air capture (DAC) for a large proportion of its scope 1 and 2 emissions reductions from 2040 to 2050. Emerging technologies are unproven and cannot be relied upon to reduce emissions. Furthermore, there is no evidence that CNR is investing in the R&D of emerging technologies, such as DAC, despite its future reliance on it. The company views fossil gas as an integral part of its strategy and a pathway to lower its carbon emissions.

CNR has increased its emissions reduction targets since the previous benchmark assessment. It has a number of emissions reduction targets focusing on methane emissions and scope 1 and 2 emissions. However, the company does not have any scope 3 targets despite these accounting for around 90% of the company’s emissions. It also does not have a net-zero target. Furthermore, the company’s targets for scope 1 and 2 emissions only cover 30-40% of these emissions.

The company has a plan for zero scope 1 and 2 emissions by 2050 using electrification of operations, “emerging technology” and offsets. CNR also plans to use carbon capture, utilisation and storage (CCUS), but alongside enhanced oil recovery (EOR). This means greater oil production and increased emissions linked to the use of the company’s products. The company does not plan to address or reduce scope 3 emissions. CNR has conducted climate scenario analysis using 1.5°C-aligned scenarios, carbon pricing and a long-term timescale. However, the company views fossil gas as a key element of its transition plan and has not committed to phasing out fossil fuels.

Currently, it is unclear how much CNR has invested in low-carbon R&D. It has focused on energy efficiency measures such as retrofitting pneumatic devices and optimising machinery. It is a member of the Pathways Alliance which looks to reduce scope 1 and 2 emissions from oil sands operations. The company is not developing any low-carbon business models, and it has recently acquired Storm Resources, a gas exploration company, to expand its oil and gas exploration activities.

CNR’s scope 1, 2, and 3 emissions intensity has remained static between 2017 and 2021. Projecting until 2027, these emissions are expected to remain relatively static. This contrasts with the annual 4% reduction required by its 1.5˚C pathway.

CNR’s transition plan is based entirely on scope 1 and 2 emissions reduction while increasing its oil and gas exploration activities. The company has not developed any low-carbon business models and does not allocate any capital expenditure (CapEx) towards low-carbon technologies. The company shows no signs of strategically repositioning itself.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company discloses the actions it takes to explore potential employment opportunities by working with local and regional contractors. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the actions it takes to provide upskilling and training opportunities for workers and affected stakeholders. For instance, it provides online and classroom-based training and professional development opportunities to its employees. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to re- or up-skill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights. However, no evidence was found that it respects the ILO fundamental rights at work and that it expects the same commitment from its business relationships. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and in its supply chain. Furthermore, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

While the company commits to respecting the health and safety of its workers, no evidence was found that it expects the same commitment of its business relationships. Further, o evidence was found of the company having a time-bound target for paying all workers a living wage. No evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements and the company’s required working hours. Moreover, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

No evidence was found that the company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data. No relevant disclosure was found of the company’s global tax strategy and the corporate income tax it pays in each relevant jurisdiction. While the company includes clauses prohibiting bribery and corruption in its business relationship contracts, no evidence was found that it has a policy prohibiting bribery and corruption. Further, no evidence was found that the company has a lobbying and political engagement policy and that it specifies that it does not make political contributions. Additionally, no relevant disclosure was found of the company’s expenditure on lobbying activities.