One of Vermilion’s defining strengths is our belief that sharing our success is essential to being a success. We have embedded this philosophy in our mission, and we continue to live it today. Our objective is to ensure that our stakeholders, our shareholders, employees, communities, and partners, benefit from our achievements.
This approach, based on the concepts of inclusive and sustainable growth, frames our business strategy and guides our role in the energy transition. As the energy transition continues to advance, two avenues of action have become increasingly important to us.
First, it is of course critical that we continue to develop and expand the implementation of reliable, secure and cost-effective sources of renewable energy. Our geothermal projects in France, in which we provide heat from our produced water to agricultural and residential sectors, are already demonstrating that oil and gas companies such as ours can not only participate in renewable energy production, but lead it. We are now seeking to extend geothermal development in concert with hydrocarbon production to The Netherlands as well.
Second, because oil, and particularly natural gas, will be required until the energy transition is completed, we believe that citizens, governments and investors should turn to best-in-class oil and gas operators. We will need to continue safely and responsibly producing the oil and gas that is still needed to fuel essential products and services. In particular, natural gas has a role to play by replacing high-carbon fuels such as coal for electricity generation, which will become increasingly important as the number of electric vehicles increases. In 2016, our natural gas offset more than 4.8 million tonnes of greenhouse gas emissions in Canada alone, as compared to coal consumption. We expect this offset to further increase in 2018, given that we are capturing a greater share of the global natural gas market, and will increase the share of natural gas in our production mix to 56%, up from about 50% in 2017.
In our operating regions of North America, Europe and Australia, we comply with some of the world’s most stringent health, safety, environmental and human rights regulations. We voluntarily report to international frameworks such as GRI and CDP. Our CDP results demonstrate how Vermilion is contributing to reducing carbon emissions. We were only one of five energy companies in the world to earn “A” List recognition in 2016, and we achieved an A- score in 2017, placing us in the top 3% of energy companies.
Vermilion remains a conventional producer in Europe, not employing hydraulic fracturing in any of our European operations. In North America, we do utilize hydraulic fracturing of horizontal wells to develop oil and gas reservoirs. However, I would point out that even in North America, we use fracturing only in semi-conventional clastic reservoirs, and we do not develop shale reservoirs. Our semi-conventional development activities in North America are much less frac intensive than shale development, requiring much lower volumes of sand and water. Based on independent economic assessments, we also have derived better returns for shareholders as a result of developing this expertise in semi-conventional reservoirs as opposed to shales. We believe this is an example of the strong correlation, and in fact, causality between sustainability and profitability.
Environmental responsibility is only a part of our sustainability focus. We have seen firsthand that inclusive growth, which we see as ensuring that everyone has an opportunity for economic advancement, is fundamental to community wellbeing and long-term democratic stability. We are therefore committed to ensuring that we produce energy in the most socially responsible manner possible, respecting worker rights and community engagement. Our geothermal energy partnerships in France, for example, have reduced carbon emissions and, at the same time, developed co-industries with great longevity. These projects have led to substantial increases in employment, particularly in rural areas that are often bypassed by the global economy. Our eco-neighborhood project in southern France specifically has economic inclusivity as an objective, with 30% of its units designated for social housing.
Strategic Community Investment is an area that Vermilion has traditionally excelled in, taking the time to assess the unmet needs in our operating areas, and then focusing our financial contributions, and most importantly, our employees’ volunteer time to meet those needs. Over the past year, we have expanded our community investment programs to focus on youth mentorship, advancing the goal that every youth will have the opportunity for productive, sustainable employment.
We took Strategic Community Investment another step further last year by incorporating public safety through our Global Emergency Responder Program, our first Vermilion-wide community investment program. In so doing, we combined our operating expertise in Health and Safety with our assessment of critical community needs in each one of our operating areas. We funded equipment and training for community providers of helicopter medevac (Canada and Australia), marine rescue (Netherlands and France), volunteer fire departments (United States and Germany), and landmine removal (Croatia).
This broad focus on sustainability (environmental, economic and social) is why we have integrated our sustainability strategy with the UN’s Global Goals for Sustainable Development (SDGs). The SDGs provide a common focus and language for the planet, stating a clear vision for our collective future. We recognize that our capabilities in health and safety, environmental stewardship, long-term economic growth generation, and creation of shareholder value provide us with opportunities, and in fact, the responsibility to move the SDGs forward.
You’ll see us referring to the SDGs throughout the report. The SDGs we feel are particularly significant are highlighted on the landing page of each major section, and our home page provides links to them all, demonstrating the interconnection of the goals.
In addition, we recognize that stakeholder expectations are evolving, with requests for increasing information over a greater number of topics. To meet those needs, we are changing the nature of our reporting, adding updates regularly to our sustainability website rather than waiting to collect them in an annual report. Updates will be flagged under the “What’s New” ribbon on the home page, to make them easy to access. We will also provide an annual refresh of all pages, with an associated PDF, to meet the needs of all stakeholders.
In last year’s message, I said that we intend to make an outsized contribution to the achievement of the Global Goals, especially on issues involving energy and the environment. While we feel that we are on our way, my colleagues and I commit to you that we will redouble our efforts to make progress on the SDGs. We know that it will take partnership between business, civil society, academia and government to truly achieve these goals. In the spirit of SDG 17, I invite you, our stakeholders, to join us as partners in this global campaign to leave no one behind.