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Sustainability Report
Values Matter
2016 Sustainability Report
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Our Targets & Metrics

Our sustainability reporting provides a platform to assess current performance, trending and comparisons to industry peers. Our Performance Metrics include significant economic, environmental, social and governance measures, and are reported with reference to TCFD, SASB (Value Reporting Foundation) and GRI Standards.

Climate-related metrics include but are not limited to:

We use these and other metrics in several key ways to monitor our progress, including:

Emission Reduction Targets: Net Zero by 2050, with first interim target in 2025

In April 2021, following our climate research scenario analysis and extensive internal assessment, we announced two new emission-related targets. The first is our commitment to net zero emissions in our own operations, including Scope 1 and Scope 2 emissions, by 2050. We are transparent that this is an aspirational goal, and that we will build the plan to achieve this target over time. There are significant inherent uncertainties in how the energy transition will accelerate over the next three decades. Our intention is to manage these by focusing on responsible production of essential oil and natural gas for as long as these forms of energy are needed, while developing opportunities in other areas that are an economic and synergistic fit for our business.

Committing to an aspirational net zero target was important, but setting a company-wide nearer term target as the first step in creating a clear pathway was even more so. We looked at our own operations – from how we manage emissions data to options for emission reduction – and at how our peers and the majors are approaching this. From this, we identified emissions intensities and opportunities for reduction within our business units, and set a second target, to reduce Scope 1 emissions intensity from our operations by 15 to 20% by 2025, using a baseline year of 2019.

This will be achieved, starting with our business units with higher emissions intensities, with an initial focus on efficiency, including process changes, venting reductions, instrumentation upgrades from gas to air and power efficiency options, along with improved metering and field measurements. Going forward, we will be setting new targets every five years, building on this foundation while exploring broader options, including the potential to reduce Scope 3 emissions.

Details of our continued progress against other targets are provided here:

CategoryTargetProgress (See Energy and Emissions Reduction Page for Details)

Scope 1 – flaring and venting 

Set in 2014: Reduce flaring emissions at our light-oil assets in southeast Saskatchewan acquired in 2014 by 50% by 2020 

Above Target:  88% reduction in annual emissions as of end 2020

Scope 1 - methane

Set in 2014: Methane reduction target included in the target above to reduce flaring emissions at our light-oil assets in southeast Saskatchewan acquired in 2014 by 50% by 2020 

Above Target: 86% reduction in annual methane emissions as of end of 2020

Scope 1 – flaring and venting

Set in 2014: Reduce flaring emissions at one of our major facilities in France by 65% by 2015  

Achieved: 65% reduction in emissions (avoiding the flaring of 14,500 tCO2e annually) by implementing a gas export system 

Scope 2 – renewable energy

Set in 2015: Exceed 5% of our total power consumption coming from renewable sources (and replacing traditionally generated electricity) by 2017

Above Target: Reduced Scope 2 emissions in The Netherlands from 41% of our 2015 gross Scope 2 emissions to 2% in 2016 and 0% beginning in 2017. This program has been extended through 2021

Renewable Heat Energy Target

Set in 2015: Generate 31,380MWh of renewable geothermal energy annually in our France Business Unit from our Parentis battery’s tomato greenhouse project until at least 2035 

Above Target: 2020 production was 59,319 MWh of geothermal energy primarily from the Parentis site, with additional input from the La Teste site

Renewable Heat Energy Target

Set in 2016: Begin generating renewable geothermal energy annually in France from our La Teste eco housing site in 2017

Achieved: Eco housing geothermal heat technology installed to support 550 housing units

Emissions Intensity

Set in 2016: Top quartile emissions intensity (lowest emission rate on a per BOE basis) when compared against our peer group annually 

On Target: Vermilion’s emissions reduction initiatives and activities have resulted in top quartile performance in our peer group with similar production weightings. 

Scope 1- flaring and venting

Set in 2018: reduce the flaring and venting emissions, including methane, associated with the Spartan assets acquired in 2018 by 50%  by 2024

Progressing: 36% reduction achieved as of end of 2020

Scope 1 – methane

Set in 2018: Similar to our 2014 acquisition of Elkhorn, this is a proportional target associated with our program to reduce methane emissions for our 2018 acquisition of Spartan by 50% by 2024. 

Progressing: 47% achieved as of end of 2020

Link to Employee and Executive Compensation

We believe there is a direct link between sustainability performance and overall business performance, including shareholder return. Moreover, we expect sustainability performance to be a very significant factor in the long-term viability of our economic model. We therefore include  sustainability- and climate-related measures to incentivize all members of our staff to focus on sustainability performance.

Our sustainability goals are reviewed regularly at the Executive Committee and Board levels to assess and confirm progress. We connect this to compensation through a pay-for-performance philosophy, combining base compensation with short-term and long-term incentive opportunities that are directly tied to operating and financial results, including fulfilment of sustainability- and climate-related commitments.

Thus, sustainability and climate-related performance is linked not only to executive but also all employee compensation, given that we use the same scorecard for every staff member. We report on this externally through our Proxy Statement and Information Circular each  year.

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Vermilion Energy