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Suncor Energy Inc.

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Globepreneurs James Huberts Kelvin Malpartida Gwen Robak Lepine Suzanne Samborski Mike Williams – PowerPoint PPT presentation

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Title: Suncor Energy Inc.


1
Suncor Energy Inc.
Globepreneurs James Huberts Kelvin
Malpartida Gwen Robak Lepine Suzanne
Samborski Mike Williams
2
About Suncor
  • Canadian based 80 year old company
  • Rick George, CEO since 1989
  • Over 4,000 employees
  • Growth oriented company
  • Extracts oil from sands of Northern Alberta
  • Other facilities in Colorado and Wyoming
  • Explores, develops, and markets natural gas under
    their Sunoco brand name
  • Develops renewable energy sources
  • Committed to Sustainable Development

3
Sustainability Vision
  • Suncors vision is to a unique, sustainable
    energy company dedicated to vigorous growth by
    meeting the changing needs of our current and
    future stakeholdersRick George, CEO
  • Being a sustainable energy company means
    managing our business in a way that enhances
    social and economic impacts to society, while
    striving to minimize the environmental impacts
    associated with resource developmentSuncor
    website

4
Competitive Strategy
  • Developing Suncors large, well-defined oil sands
    resource base
  • Investing in technology to expand our upgrading
    operations and increase crude oil production
  • Linking production to the growing North American
    energy market through term supply agreements and
    their own refining operations

5
Competitive Strategy
  • Believes in free enterprise
  • Healthy and unhampered competition is essential
  • Complies with and supports competition law
  • Wants to eliminate special treatment of protected
    businesses and economies
  • Wants to ensure economy and market work well and
    run smoothly within a sustainable context
  • Developed their own competition act
  • Act contains reviewable practices
  • Exclusive Dealing
  • Market Restriction
  • Delivered Pricing

6
Reviewable Practices
  • Exclusive Dealing describes method of product
    distribution, a condition of supplying products
    to a customer or supplier requires or induces a
    customer deals only in the suppliers products or
    the customer not deal in products of any of
    suppliers competitors
  • Market Restriction distribution practice, a
    supplier requires its dealers and distributors
    sell only to certain persons or only in a
    restricted geographical area
  • Delivered Pricing it is prohibited that a
    supplier engage in a practice of refusing to
    permit customers to buy and take delivery of an
    article at any locality where supplier makes
    deliveries to other customers on same terms and
    conditions that are available to customers whose
    business are found in the locality

7
Sustainability Drivers
  • If you are going to be in business and prosper
    for 50 years, then reducing environmental
    footprint has to come front and centre.Rick
    George, CEO

8
Sustainability Drivers
The Triple Bottom Line
  • Builds stakeholder support for a companys growth
    plan
  • Decreases costs of business
  • Positions the company to meet consumer demand
    with less environmental impact

9
Sustainability Drivers
  • Attract and retain a more talented workforce
  • Improve relations with regulators
  • Prosper and provide long-term shareholder value
  • Improve access to borrowed capital

10
Sustainability Drivers
  • Recognition that fossil fuel resources are finite
  • Helps maintain a good reputation
  • Relationship building with environmental groups
  • New regulations (Kyoto)

11
Sustainability to Date
Measuring up against the Triple Bottom Line
  • Environmental Sustainability
  • Social Sustainability
  • Economic Sustainability

12
Sustainability to Date
Environmental Sustainability
  • 1.5B spent on RD to reduce environment damage
  • 2002 - first wind power project in Saskatchewan
    with Enbridge - 11 megawatt
  • 2003 - partner in 30 megawatt wind power project
    in Alberta to triple their wind capacity
  • Member of Cumulative Environmental Management
    Association (CEMA)
  • Protected Alberta regions of wildlife and
    backcountry

13
Sustainability to Date
Environmental Sustainability
  • 2002 - GHG management
  • better measurement and recording to enhance
    energy efficiency
  • Reduced emission intensity by 18
  • Provided Ontario consumers with lower sulphur
    gasoline
  • well ahead of the regulated 2005 deadline
  • Reduced emissions of CFCs by 65

14
Sustainability to Date
Environmental Sustainability
  • Life Cycle Value Assessment (LCVA) Initiative
  • evaluates projects start to finish from
    manufacturing to disposal
  • assess social, environmental, and economic
    impacts to make decisions on triple bottom line
  • Participant in US 24 million CO2 Capture Project
  • 95 of water used in extraction of bitumen is
    recycled back into steam generator

15
Sustainability to Date
Social Sustainability
  • Held meetings for community to ensure plans meet
    the needs of the community
  • Journey to Zero
  • program eliminates all occupational injuries and
    illnesses
  • Matches employees in United Way donations
  • Works with other industry and local partners
    including Wood Buffalo Municipality

16
Sustainability to Date
Social Sustainability
  • Signed Industry Relations Agreements with First
    Nations groups
  • 13 of workforce is comprised of Aboriginal
    workers through education, training, and
    recruitment
  • Promoted Cultural Awareness
  • in-house Aboriginal awareness workshops

17
Sustainability to Date
Economic Sustainability
  • Diversification of operations through new energy
    sources (wind power and ethanol)
  • Net Earnings doubled from 2001-2002 to 761m
  • 50 Year Operating Plan

18
Sustainability to Date
Economic Sustainability
  • Transparency
  • High degree of disclosure
  • Use of independent auditors
  • 24 hour integrity hotline for employees

19
Link to Overall Strategy
  • Suncor is committed to growing its energy
    business in a way that generates value for
    shareholders. To achieve our financial goals, we
    realize we must constantly strive to improve the
    performance of our operations and products,
    engage our employees in finding new and better
    ways of doing things, and work with all of our
    stakeholders to realize social, environmental and
    economic benefits.2003 Whats at Stake - Report
    on Sustainability

20
Link to Overall Strategy
  • Committed to delivering shareholder returns,
    while providing social and economic benefits to
    stakeholders and reducing environmental impacts
  • Focused on generating shareholder value by
    developing huge resources of Athabasca oil sands
    using sustainable processes
  • Uses best available manufacturing technology to
    increase oil production while protecting the
    environment

21
Link to Overall Strategy
  • Meeting customer needs for quality products (i.e.
    ethanol fuels)
  • secure a balance of stable, long-term commercial
    and industrial contracts with sustainability-minde
    d businesses
  • improve the efficiency of sustainable retail
    network
  • investigate opportunities to expand responsible
    refining operations
  • Developing wind power because it provides
    business opportunities and minimizes economic
    footprint
  • Higher rates of responsible production

22
Link to Overall Strategy
  • Committed to working with employees,
    shareholders, stakeholders, communities,
    environmentalists, and aboriginal peoples to
    ensure the rights, safety (Journey to Zero), and
    quality of life are protected
  • Pursues alternate power sources as a financial
    and environmental commitment the corporation
    which embraces triple bottom line
  • Only oil and gas company to produce cost analysis
    for business case to comply with Kyoto accord

23
Recommendations
  • In walking his talk, Rick George should leverage
    his experience and credibility by having 50 of
    all members of the Canadian Council of Chief
    Executives producing sustainability strategies
    and reports by 2010
  • Suncor needs to commit to generating 50 of its
    revenues from alternative renewable resource
    energies by 2015 possible mix (30 Wind/20
    Ethanol)

24
Recommendations
  • The annual report should make references to
    sustainability to underline its company-wide
    commitment
  • Provide comparative analysis with other oil and
    gas corporations in the global market to
    benchmark their performance
  • Increase RD and further expand the ethanol
    projects
  • Improve social responsibility in communities were
    transfer credits are purchased

25
Recommendations
  • Provide more "measurability" in their initiatives
    with specific targets
  • Increase the wind power by 30 of their current
    output
  • Invite local environmental groups to act as
    "watchdogs" in each country they operate to
    attain the corporate goal for transparency
  • Set up a "green hotline" for those seeking
    specific information and advice

26
References
Canada NewsWire, February 13, 2004, Financial News, Attention Business Editors, Suncor announces preliminary federal ethanol funding approval
Canadian Business, Features, Oil and Gas, Saint or Sinner, by Andrew Nikiforuk
Competitive Strategy, Quick MBA website - www.quickmba.com
Fort McMurray Today, September 5, 2003, Final edition, Suncor Wind Power Project Approved
Global News Wire, Europe Intelligence Wire, Investors Digest, January 24, 2003, Kyotos Impact on Investors, by Anne Papmehl
National and Global Perspectives, Business Council on National Issues, Canadian Council of Chief Executives, Speech from Richard George, Suncor, Spring 2002
Perspectives, Spring 2002, Excerpts from recent speeches by members of the Canadian Council of Chief Executives
Suncor Website - www.suncor.com
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