Over the past decade, Vermilion Energy has consciously pursued the integration of environmental and social sustainability into our mission to be the “Best Energy Company in the World.” This focus on sustainability has grown substantially over the past five years, to the extent that I can now proudly state that sustainability – environmental, social, and economic – lies at the heart of our company’s strategy.
Our objective is to deliver responsibly-produced energy to meet the world’s evolving needs. Implicit in this objective is doing what we can to meet the needs of our broadly defined stakeholders, ranging from our shareholders to our communities to our global environment. We are determined that the work that we do to serve these stakeholders will be delivered within the context of our four core values of Excellence, Trust, Respect, and Responsibility.
This is why we have positioned Vermilion purposefully within the energy transition, seeking to have our energy and creativity build a better future for our stakeholders through enhanced economic, environmental and community wellbeing. I know that our worldwide staff – now numbering in excess of 1,000 dedicated individuals – has a growing commitment to this honorable task. Our employees and contractors recognize that we can and must meet both internal business objectives and those of our broad stakeholder group, and that our business success and our stakeholders’ success are inextricably linked and mutually reinforcing.
It is therefore critical that we work with our government and community stakeholders to employ our oil and gas assets as strategic resources. Predictions differ about the precise manner and pace of the energy transition. Nonetheless, our own scenario analyses make it clear that Vermilion can best contribute by focusing on producing energy safely and responsibly – and also reliably and cost-effectively. We are already deploying our strategic oil and gas resources in the service of the energy transition and, indeed, the even more fundamental framework for our planet’s health and wellbeing represented by the United Nations Sustainable Development Goals (SDGs). I want to relate a few examples of how we are successfully achieving this dual aim of serving both the energy transition and the SDGs.
We are expanding our development of geothermal-related energy, actively working with community partners to leverage traditional oil and gas assets not only for environmental benefits, but for social benefits as well. In France, we are providing heat from the produced water in our oil operations to develop sustainable agriculture and residential projects. Our first energy-recycling sustainability project, launched more than 10 years ago, jump-started a new tomato industry in a region underserved by capital investment. Our energy-reclaiming community-building projects – one underway and one in the planning process – specifically target economic inclusivity in the form of social housing: 30% of residences in the first project, and all residences in the new one, are reserved for those with lower incomes. In the Netherlands, we are continuing to develop a project to convert depleted gas wells to geothermal assets, supplying energy to a sustainable and scalable agriculture center.
These partnerships simultaneously reduce carbon emissions, contribute to community development, and support co-industries that should endure even after the energy transition is complete. We are proud to be a central contributor to these economic and social success stories, which positively impact several interconnected SDGs: SDG 7 on Affordable and Clean Energy, SDG 8 on Decent Work and Economic Growth, SDG 10 on Industry, Innovation and Infrastructure, and SDG 13 on Climate Change.
At the same time, we are focused on developing our oil and gas assets in North America, Europe and Australia with simultaneously positive economic and environmental impacts, by applying our expertise in mature field renewal. As an example, after we purchased the assets of a private company in southeast Saskatchewan in 2014, we spent the next two years collaborating with industry partners to capture previously flared or vented natural gas. The result was a 75% reduction in emissions at these locations between 2014 and 2016. We are now using the same best-in-class approach on an even larger scale to reduce emissions from additional Saskatchewan assets that we acquired as part of our merger with Spartan Energy in 2018.
These are examples of the content throughout this report, in which we have noted the projects and programs that are reducing our emissions while providing more energy to the world’s growing and increasingly prosperous population. We are very happy that for a third consecutive year, we have reduced absolute emissions while still increasing energy production. We strongly believe, and contend that we have demonstrated, that there is a real correlation between sustainability performance and value creation for shareholders. In fact, we believe that this correlation reflects causation and intention. This is because our Integrated Sustainability strategic objective requires unceasing discipline and innovation in our investment decisions and operations.
Reducing fossil fuel consumption while producing energy is a form of both energy efficiency and waste reduction, and is the right thing to do. We believe that our approach of lowering carbon emissions while improving the economic performance of our assets supports multiple desirable objectives: long-term economic viability of our company, preservation of employment and contracting opportunities, and climate stabilization.
Supporting the communities in which we live and work is also the right thing to do. Our focus on environmental improvements is mirrored in our Strategic Community Investment program, called Ways of Caring, which emphasizes employee volunteer time as well as company financial contributions. In just one example this year, 112 of our staff provided 562 hours to Wood’s Homes in our headquarters city of Calgary, Alberta. We assisted with landscaping, painting, furniture moving, window cleaning, and food preparation for their new Inglewood Campus, which has now opened its welcoming doors to Calgary’s homeless and at-risk youth. We have also implemented a worldwide program for Emergency Response, with flagship programs in each of our eight business units to assist with public and worker safety. This program improves the safety not only of Vermilion’s workers, but also of all members of the communities in which we operate.
We do not take our mission to be the “Best Energy Company in the World” lightly. This is why, as we increase our market share in global energy production through a disciplined approach to long-term growth, we also seek to improve the environmental and social performance of the energy sector overall by raising the bar for Best-In-Class sustainability performance. We call on you – our investors, communities, and governments – to work with us to share and support our commitment to deliver energy in an increasingly sustainable manner.