Suncor Energy

The company aims to achieve zero scope 1 and 2 emissions by 2050. It is unclear if Suncor will use offsets to achieve this target. The company has a new scope 1, 2 and 3 target of a 10 Mt reduction across its value chain per year until 2030. However, this target lacks details and it is unclear how the company plans to achieve it. The company is expected to exceed its 1.5°C carbon budget by over 50% between 2022 and 2050. Suncor can improve its ambition by setting clear intermediate targets to drive ongoing accountability for managing emissions.

Suncor publicly supports the Paris Agreement and regional climate policies. However, its public stance is undermined by its CEO’s position on the board of the Canadian Association of Petroleum Producers (CAPP), who lobbied to exclude upstream oil and gas from Canada’s Clean Fuels Standard and funded social media advertisements attacking carbon pricing in the run-up to 2018 elections in Ontario. Suncor can show leadership by withdrawing from trade associations known for negative positions on climate policies or by actively using its position to drive support for climate policy.

Suncor plans to invest 10% of its total CapEx on low-carbon mitigation technologies between 2022 and 2025. The company invested USD 340 million in 2022 to replace coke-fired boilers with natural gas-fired cogeneration units at its oil sands base plant. The company’s planned CapEx, however, is far below the sectoral expectation for oil and gas companies to direct 77% of their total CapEx towards low-carbon technologies to align with a 1.5°C scenario. The company should look to increasing its commitment to CapEx for low-carbon businesses.

Suncor has conducted a climate scenario analysis using three scenarios until 2050 and a 2°C scenario until 2100. The company’s 2°C scenario considers the impact of a shift in energy mix, technologies and policies, alongside a carbon price that is aligned with the International Energy Agency (IEA) Net Zero Emissions (NZE) Scenario by 2050 based on a 1.5°C temperature rise. Suncor qualitatively links its scenario analysis to its transition plan, but it can improve by stating clear financial and long-term business impacts that it anticipates in these scenarios. Suncor is currently reviewing the use of a 1.5°C scenario, which will better prepare the company in the near-term for a low-carbon transition.

Suncor has implemented a low-carbon transition plan and aims to achieve zero scope 1 and 2 emissions by 2050. It is unclear if Suncor will use offsets to achieve this target. Under the Pathways Alliance, Suncor aims to reach net-zero oil sands emissions by 2050. The company has also introduced a new target to reduce all emissions scopes by 10 Mt per year across its value chain until 2030. However, this target does not have a base year and it is unclear how the company plans to achieve it.

The company’s low-carbon transition strategy focuses on achieving zero scope 1 and 2 emissions by 2050 and the expansion of low-carbon businesses. Suncor plans to achieve this through improving energy efficiency, technology improvements, increasing fossil gas (cogeneration), renewable power production, fuel switching, distribution and blending optimization, renewable fuels, refinery coprocessing, carbon capture and storage (CCS), development of low-carbon hydrogen capacities and production of sustainable biofuels through collaboration with other companies.

Suncor is still developing its 200 megawatt (MW) wind power project and is progressing with plans to replace decommissioned coke-fired boilers with natural gas-fired cogeneration units. The company has entered partnerships to develop sustainable biofuels and hydrogen from renewable energy. However, the company’s plans equate to just 10% of total CapEx on low-carbon businesses between 2022 and 2025. This falls significantly below the 77% of CapEx for low-carbon businesses that is required from oil and gas companies under a 1.5°C pathway.

Suncor has several wind power projects amounting to a capacity of 111 MW. The company’s scope 1 and 2 emissions intensity increased between 2017 and 2021 and is expected to remain static over the next five years. Suncor needs to reduce its scope 1 and 2 emissions intensity by around 4% annually to be aligned with its 1.5°C pathway. In addition, the company is expected to exceed its scope 3 carbon budget by over 50% between 2022 and 2050.

Suncor does not indicate plans to transition away from oil and gas in the future. The company has recently divested its wind assets and has acquired new oil sands capacity. This is inconsistent with a 1.5°C pathway and unsanctioned under the IEA NZE Scenario. The company needs to rapidly scale up its low-carbon businesses to reduce dependency on fossil fuel activities. In addition to this, the company’s transition plan lacks sufficient intermediate targets to achieve its long-term 1.5°C pathway ambitions.

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 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 just transition planning.

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. No public commitment by the company was found stating its intention to re- and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

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.

While the company commits to respecting human rights and the ILO fundamental rights at work, no evidence was found that it expects its business relationships to respect the ILO fundamental rights at work. Further, 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.

While the company expects its business relationships to respect the health and safety of their workers, no evidence was found that it demonstrates the same commitment. Further, no evidence was found of the company having a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. Moreover, 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. Furthermore, no relevant disclosure was found of the company’s global tax strategy and the corporate income tax it pays in each relevant jurisdiction. The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. However, no evidence was found that the company has a lobbying and political engagement policy or that it specifies it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.