Canadian oil sands firm Suncor backs proposal from shareholder NEI on climate resilience

Fossil fuel giant says greater disclosure will benefit shareholders

Suncor Energy, the giant Canadian energy company that pioneered the development of the Athabasca oil sands basin in Alberta, has come out in support of a shareholder resolution on long-term energy resilience filed by asset management firm NEI Investments, the mutual fund company with more than C$6bn (€4bn) under management.

The resolution will go to the vote at the company’s annual general meeting next month and Suncor is advising shareholders to support it.

It’s the latest support for a shareholder climate resilience proposal at a fossil fuel firm in the wake of the ‘Aiming for A’ breakthroughs at BP, Shell and Statoil last year and comes amid a collapse in oil prices that has seen Suncor freeze salaries. It also comes as Calgary-based Suncor is acquiring rival Canada Oil Sands in a C$6.6bn deal.

Suncor specialises in synthetic crude from oil sands – although it is involved in six operational wind facilities, with a current generating capacity of 287MW.

NEI is asking it to provide “ongoing reporting on how it is assessing, and ensuring, long-term corporate resilience in a future low-carbon economy”.

The motion says Suncor’s reporting could be stand-alone or integrated into current company reporting mechanisms. It could address Suncor’s technology pipeline, emission reduction targets and performance, innovation and energy diversification strategies as well as provide a “narrative” on any stress-testing against external low carbon scenarios.

“Suncor appreciates that shareholders and other stakeholders benefit from understanding how the company is addressing these challenges,” the company says in its new proxy circular argues the additional disclosures sought will help it to “engage with shareholders” and others about its initiatives in a “meaningful and informative” way. “Therefore, the Board and management recommend shareholders vote FOR this proposal.”

Jamie Bonham, Manager, Extractives Research & Engagement at NEI, said: “We are very encouraged that the Suncor board and executive teams are in agreement that this is a material issue that will define success (or lack of) for the company as a whole.

“We are encouraging all Suncor shareholders to support the resolution, but further than that we hope that shareholders will reach out to the company to commend it for supporting the resolution.” Bonham said it’s important for the company to hear positive feedback from shareholders – and that they will be looking intently at the new disclosures.

Sustainability is already a component in executives’ annual incentive plans and in 2015 one of CEO Steven Williams’ 2015 goals was to improve performance in support of long-term sustainability goals.

However, Suncor is advising shareholders to vote against a second shareholder proposal at the AGM. The motion, from an unnamed group of shareholders, calls for disclosure of lobbying payments. The company, though, says it’s confident its lobbying activities are “aligned with its shareholders’ long-term interests”.

The three largest institutional shareholders in Suncor include Fidelity, Royal Bank of Canana and Capital Research Global Investors, according to Morningstar data. Also high up the list are TD Asset Management, Invesco, Warren Buffett’s Berkshire Hathaway and Wellington. Suncor holds its AGM in Calgary on April 28.