When the United Nations released its Sustainable Development Goals in the fall of 2015, it generated an unprecedented focus on collaboration between nations, civil society and business to create a sustainable future for people and the planet. The Conference of the Parties in Paris last November made the need for working together even clearer.
At Vermilion, we have always been committed to the priorities of health and safety, the environment, and economic prosperity – in that order. Nothing is more important to us than the safety of our communities and those who work with us, and the protection of our natural surroundings. And while our communities rely on us to conduct business responsibly, we believe in reaching beyond, ensuring that our investors, our people, our partners and our communities share in our success.
The past year has continued to present significant economic challenges for the energy sector, but we did not retrench from our determination to effect positive change for all stakeholders during this industry downturn. Instead, we remain committed to our vision of disciplined, long-term growth and of delivering shareholder value by operating in an economically, environmentally and socially sustainable manner.
As we release our third annual sustainability report, I am honored to share how we are moving forward with this vision. In 2015, we recognized Integrated Sustainability as one of our six key business drivers, and we established internal champions with mandates to advance our objectives. Our employment of the phrase “Integrated Sustainability” reflects our belief that every facet of Vermilion’s business, beginning with our physical operations and encompassing our financing, human resources and community relations, must advance our overarching goal of advancing global sustainability. We understand that as a careful and socially conscious energy producer, we contribute to the economic and environmental strength of the communities and countries where we operate, particularly as the planet moves toward a low-carbon economic model.
The displacement of coal by natural gas is an important part of this energy transition, and is recognized as such by many of the governments where we conduct our operations. In 2015, for example, our natural gas would have offset nearly 1.9 million tonnes of greenhouse gas emissions compared to a coal-based energy source. We expect this offset to further increase in 2016, given that we have already moved from a 60/40 oil-gas production balance at the end of 2015 to a 50/50 split in mid-2016. We are also continuing to pilot the generation of renewable energy within our operations, including expanding geothermal applications in France to an entire eco-neighbourhood, and assessing our geothermal potential in The Netherlands.
We are focused on the transparent reporting of our sustainability performance. In keeping with this, we are taking 2016 as a foundational year to analyze the data we have compiled since 2012 and to compare it to feedback from key stakeholders, including investors and socially-responsible investment agencies, and to industry benchmarks. As a result, we will progress this fall to include climate change policy, science-based target setting approaches, and restructuring our reporting to make it even more useful to our stakeholders. This is critical work, and we are investing both the time and resources that are required to get it right. Please stay tuned for our future announcements in these key aspects of our sustainability program.
Vermilion contends that the oil and gas sector has an essential role to play in the achievement of the UN Sustainable Development Goals, especially on the issues involving energy and the environment. We intend to make an outsized contribution to this effort. We take on this mantle not out of inwardly-directed self-interest, but instead because it is the right thing for an internationally-focused, well-governed company to do. In fulfilling our commitment, we will have clear expectations for both our results and the manner in which we achieve them. We are proud of our broad emphasis on Integrated Sustainability, and we hope that this 2016 Sustainability Report clarifies our commitment to this key part of Vermilion’s mission.
Finally, I ask that you, as our stakeholders in this critical venture, provide us honest feedback in your assessment of this Report and our overall efforts. And I ask that you join us in our commitment to global sustainability.
Yours very truly,