Back to Top
Values Matter
2016 Sustainability Report
Values Matter
2016 Sustainability Report
Download our
2016

Discussion of Management Approach

Under GRI’s G4 framework, each of Vermilion’s nine identified Material Aspects under the Specific Standard Disclosures section requires a Discussion of Management Approach, or DMA, which in turn requires three main elements:

  1. What makes the Aspect material?
  2. How do we manage the Aspect?
  3. How do we evaluate our management approach, and does this lead to adjustments?

Much of this information is contained in our Materiality Analysis and within the report text. However, to make this easier to locate in the report, we have summarized the DMAs for each Aspect below. These include why we selected the Aspect as material, how we manage, evaluate and adjust as needed, where operational responsibility lies within Vermilion, and where to find additional details about our management approach within the Sustainability Report. They also include not only the general DMAs expected for every Aspect, but also Aspect-specific DMAs where they apply. 

ASPECT: ECONOMIC PERFORMANCE, INCLUDING INDICATORS FOR RESERVES AND COMMUNITY INVESTMENT
Materiality
  • Critical to Vermilion’s continued operation, and to stakeholders who depend on the company’s success, including investors, staff, partners/suppliers, and communities
Manage
  • Commitments: consistently strong return on capital, reliable growth and access to strong markets
  • Approach: short, mid- and long term milestones outlined in internal business strategy mapped out to 2020
  • Target: production growth of 30% between 2014 and 2016
  • Focus: operational excellence leading to greater efficiencies and effectiveness
Evaluate
  • Departmental quarterly reviews of commitments and progress within the strategy and reporting to the executive and Board of Directors
  • Quarterly executive and Board reviews of strategy and milestones reached 
  • Monitoring of investor relations trends and issues
Adjust
  • Changes to strategy as needed to adapt to macroeconomic changes
  • Changes to internal processes or technologies as needed to fulfill production targets and shareholder returns
  • Acquisitions as needed to fulfill production targets
Responsibility

Chief Operating Officer, Chief Financial Officer, Director Business Development

More detail
ASPECTS: ENVIRONMENT, INCLUDING ENERGY, WATER, EMISSIONS, EFFLUENTS AND WASTE, (DMA SIMILAR FOR ALL, ENCOMPASSES SAME POLICIES)
Materiality
  • Presents as critical operational risk from an adverse environmental incident, but also as important opportunities to improve technology and processes to both protect the environment and contribute to operational excellence and return to shareholders
Manage
  • Commitments: to fully integrate Health, Safety and Environment into our business, creating a culture recognized as a model by industry and stakeholders.
  • Approach: integrated management system that includes HSE and Asset Integrity, focused on five pillars: HSE Culture, Communications and Knowledge Management, Technical Safety Management, Incident Prevention and Operational Stewardship and Sustainability. Supported by HSE Policy with 10 focus areas. 
  • Target: zero adverse environmental incidents; improvement of process effectiveness and efficiencies to minimize environmental impacts of our operations; continuous improvement in four areas: improving energy efficiency, reducing greenhouse gas emissions, minimizing water use, caring for the land (especially protecting against spills and releases)
  • Focus: establishment of comprehensive climate and environmental risk matrix analysis; continual examination of technology and processes, annual assessment of legislative and regulatory changes and their potential impacts; GHG Quantification Methodologies study and Carbon Liability Analysis completed
  • Measurement: use of Event Management Information System to track health, safety, environmental, regulatory and public complaint incidents or near misses, their root causes, actions taken and preventive measures
  • Aspect specific DMA for Energy and Emissions: country, regional and industry regulations/policies for energy can be found in Our Commitment to HSE – Our Regulatory and Reporting Framework
  • Aspect specific DMA for Emissions: numerical targets for GHG reductions are described in CDP Report
Evaluate
  • Established baselines for key performance indicators through Carbon Disclosure Project and sustainability reporting in 2012 and 2013.
  • As reporting progresses from baseline into trend analysis, identify additional areas for improvement
  • Internal review of sustainability policy
Adjust
  • Changes to sustainability policy as needed
Responsibility
  • Chief Operating Officer, via Director, HSE
Details
Aspect: Employment
Materiality
  • Vermilion and its stakeholders recognize that staff are key to achieving operational goals, including in the areas of economic, environmental, safety and social issues
Manage
  • Commitments: to maintain Vermilion’s position as a workplace of choice, to enable the company to attract and retain high quality staff
  • Approach: competitive compensation and benefits packages; provision of a safe and respectful work environment
  • Target: low turnover rate, ease of finding qualified candidates
  • Focus: strong two-way communication between management and staff; launch of new intranet in 2013; launch of Workday system in 2013 to streamline employee information for both staff and management
  • Aspect specific DMA for Employment: Vermilion is not aware of any work that is done within our supply chain that is not subject to appropriate institutional and legal frameworks, including but not limited to social and labour protection, fair working conditions and compensation, or disguised employment relationships. We rely on our legally constituted contracts and supplier agreements to ensure that work and products comply with all labour laws and regulations. However, we recognize that we may not be aware of all suppliers in our extended supply chain. This is an area that we need to review and research in order to determine action needed to ensure the integrity of our supply chain once it is removed from those working with us directly.
Evaluate
  • Analysis of results from Great Place to Work® staff survey, including department workplans to respond to staff concerns and suggestions
  • Monitoring of/action in response to staff suggestions via the intranet
  • Analysis of Workday statistics in key areas such as turnover to ensure competitive position
  • Gap analysis for performance metrics
Adjust
  • Adjustments to work/employee policies as needed
  • Increased communication via intranet and other internal communication channels
  • Increased data gathering to close gaps in performance metrics
Responsibility
  • EVP People & Culture
Details
Aspect: Occupational Health and Safety, including Process Safety
Materiality
  • First priority for company and its stakeholders: nothing is more important than the safety of staff, partners, suppliers, communities and all those who work with us
Manage
  • Commitments: to fully integrate Health, Safety and Environment into our business, creating a culture recognized as a model by industry and stakeholders
  • Approach: integrated management system that includes HSE and Asset Integrity, focused on five pillars: HSE Culture, Communications and Knowledge Management, Technical Safety Management, Incident Prevention and Operational Stewardship and Sustainability. Supported by HSE Policy with 10 focus areas.
  • Target: zero safety incidents
  • Focus: integration of existing HSE Management System and Asset Integrity Management System with newly developed Process Safety Management System
  • Measurement: use of Event Management Information System to track health, safety, environmental, regulatory and public complaint incidents or near misses, their root causes, actions taken and preventive measures
Evaluate
  • Analysis of results from staff HSE Perception Survey
  • Analysis of safety metrics
  • Analysis of audit and compliance reviews
Adjust
  • Continued implementation of Fair Culture policy across business units
  • Complete Implementation of Process Safety Management System
  • Continued implementation of competency and training program
  • Continued focus on increasing internal communication of safety programs
  • Further development of OH&S within supply chain
Responsibility
  • President and Chief Operating Officer, via Director, HSE
Details
Aspect: Training and Education
Materiality
  • Considered a critical element of employee engagement, building productivity, and contributing to staff attraction and retention
Manage
  • Commitments: engage Vermilion in assisting staff to identify and achieve career and development goals
  • Approach: lifelong learning approach, combined with annual identification of specific development goals for all permanent employees
  • Target: 100% of permanent employees participating in an annual performance review and development plan
  • Focus: provision of informal and formal training and development opportunities that fulfill both company and employee needs
Evaluate
  • Gap analysis of company and staff training needs
Adjust
  • Strengthen training offerings in personal development training and key health and safety courses
Responsibility
  • EVP People & Culture
Details
Aspect: Anti-Corruption
Materiality
  • Critical ethical, reputational and legal risk for the company, which could jeopardize economic performance and negatively impact not just Vermilion but also key stakeholders
Manage
  • Commitments: zero tolerance for corruption on the part of our Board, staff, suppliers and any other entity related to Vermilion
  • Approach: clear anti-corruption policy is part of Vermilion’s Code of Conduct; advice can be sought or infractions noted anonymously to our Corporate Secretary
  • Target: 100% compliance on the part of the Board, staff, suppliers and any other entity related to Vermilion
  • Focus: annual sign-off by members of the Board and staff
  • Aspect specific DMA for Anti-Corruption: We assess the risk for corruption based on geography during our business development due diligence. We specifically operate in geographical regions noted for their stable, well developed political regimes and fiscal and regulatory policies regarding oil and gas exploration and development. We have developed a clear and comprehensive Code of Conduct that includes policies specific to anti-corruption and anti-bribery, with which all staff must comply. Community investments such as charitable donations and sponsorships are approved through either Business Unit community investment committees and managers, or through several levels of review (such as the Senior Community Investment Advisor, Team Lead Community Investment, Managing Director and the EVP People & Culture and CEO, depending on location). They are granted using specific and detailed parameters that minimize the risk that they could be used as bribery. We have identified none of our governance body members, employees or business partners as having a high risk of incidents of corruption. We provide specific anti-corruption training when required, but do not participate in collective action initiatives related to anti-corruption.
Evaluate
  • Evaluate based on percent of Board and staff who certify their compliance annually (currently 100%). Compare Vermilion current practices with industry best practices to determine gaps
Adjust
  • Ensure continued communication of expectations and monitoring of compliance
  • Best practices indicate the need for contractor and supplier certification in addition to Board and staff. Review process needed to put this into practice.
Responsibility
  • CEO, CFO, and EVP People & Culture
Details
Values Matter
Vermilion Energy