CDP. Module: Introduction. Page: Introduction. CDP 2015 Climate Change 2015 Information Request CC0.1

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1 CDP CDP 2015 Climate Change 2015 Information Request Suncor Energy Inc. Module: Introduction Page: Introduction CC0.1 Introduction Please give a general description and introduction to your organization. In 1967, Suncor Energy pioneered commercial development of Canada's oil sands one of the largest petroleum resource basins in the world. Since then, Suncor has grown to become a globally competitive integrated energy company with a balanced portfolio of high-quality assets, a strong balance sheet, and significant growth prospects. Suncor s operations, located near Fort McMurray, Alberta, in the Athabasca region, extract and upgrade oil sands into high-quality, refinery-ready crude oil products and diesel fuel. Across Canada and in Colorado, Suncor markets the company's refined products to industrial, commercial, and retail customers. In Canada, its network of more than 1,450 Petro-Canada stations is one of the most customer-recognized, top-volume retailers in the country. Suncor Energy has refineries in Edmonton, Alberta; Sarnia, Ontario; Montreal, Quebec; and Commerce City, Colorado. Suncor s lubricants business is the largest producer of quality lubricantbased stocks in Canada, with customers worldwide. In western Canada, across the East Coast of Canada, and internationally, Suncor explores for, develops, and produces conventional oil from both onshore and offshore developments. Suncor is also investing in clean, renewable energy sources. Suncor has seven wind power projects in operation with a total capacity of 295 megawatts, enough to power about 115,000 Canadian homes per year. Suncor also operates Canada s largest ethanol facility in St. Clair, Ontario, which has a current production capacity of 400 million liters per year. The ethanol is blended into its Petro-Canada gasoline and contributes to avoiding up to 600,000 tonnes of carbon dioxide emissions per year. CC0.2 Reporting Year Please state the start and end date of the year for which you are reporting data. The current reporting year is the latest/most recent 12-month period for which data is reported. Enter the dates of this year first. We request data for more than one reporting period for some emission accounting questions. Please provide data for the three years prior to the current reporting year if you have not provided this information before, or if this is the first time you have answered a CDP information request. (This does not apply if you have been offered and selected the option of answering the shorter questionnaire). If you are going to provide additional years of data, please give the dates of those reporting periods here. Work backwards from the most recent reporting year. Please enter dates in following format: day(dd)/month(mm)/year(yyyy) (i.e. 31/01/2001). 1

2 Enter Periods that will be disclosed Wed 01 Jan Wed 31 Dec 2014 CC0.3 Country list configuration Please select the countries for which you will be supplying data. If you are responding to the Electric Utilities module, this selection will be carried forward to assist you in completing your response. Select country Canada United States of America CC0.4 Currency selection Please select the currency in which you would like to submit your response. All financial information contained in the response should be in this currency. CAD ($) CC0.6 Modules As part of the request for information on behalf of investors, electric utilities, companies with electric utility activities or assets, companies in the automobile or auto component manufacture sub-industries, companies in the oil and gas sub-industries, companies in the information technology and telecommunications sectors and companies in the food, beverage and tobacco industry group should complete supplementary questions in addition to the main questionnaire. If you are in these sector groupings (according to the Global Industry Classification Standard (GICS)), the corresponding sector modules will not appear below but will automatically appear in the navigation bar when you save this page. If you want to query your classification, please respond@cdp.net. If you have not been presented with a sector module that you consider would be appropriate for your company to answer, please select the module below. If you wish to view the questions first, please see 2

3 Further Information Advisories Forward-Looking Statements Forward-looking statements in these responses include references to: benefits of Suncor s sustainability initiatives; plans and expectations for projects and initiatives undertaken by Suncor or in which Suncor is involved; Suncor s strategies; expected regulatory changes and the impact of regulations; plans and expectations around technologies; and Suncor s environmental goals. Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to our company. Suncor's actual results may differ materially from those expressed or implied by our forward-looking statements and you are cautioned not to place undue reliance on them. Suncor's Earnings Release, Quarterly Report and Management's Discussion & Analysis for the first quarter of 2015 and its most recently filed Annual Information Form/Form 40-F, Annual Report to Shareholders and other documents it files from time to time with securities regulatory authorities describe the risks, uncertainties, material assumptions and other factors that could influence actual results and such factors are incorporated herein by reference. Copies of these documents are available without charge from Suncor at 150 6th Avenue S.W., Calgary, Alberta T2P 3Y7, by calling , or by request to info@suncor.com or by referring to the company's profile on SEDAR at sedar.com or EDGAR at sec.gov. Except as required by applicable securities laws, Suncor disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Non-GAAP Measures Certain financial measures in these responses namely cash flow from operations and EBITDA are not prescribed by Canadian generally accepted accounting principles (GAAP). Cash flow from operations is defined and reconciled in Suncor s Management s Discussion & Analysis for the year ended December 31, 2014 and EBITDA for the purposes of the response to OG6.1 is defined as earnings before interest, taxes, depreciation and amortization. These non-gaap financial measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other companies. These non-gaap financial measures are included because management uses the information to analyze business performance, leverage and liquidity, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. BOEs Certain natural gas volumes have been converted to barrels of oil equivalent (boe) on the basis of one barrel to six thousand cubic feet. Any figure presented in boe may be misleading, particularly if used in isolation. A conversion ratio of one barrel of crude oil or natural gas liquids to six thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value. Module: Management Page: CC1. Governance CC1.1 Where is the highest level of direct responsibility for climate change within your organization? Board or individual/sub-set of the Board or other committee appointed by the Board 3

4 CC1.1a Please identify the position of the individual or name of the committee with this responsibility i. Committee Name: The Environment, Health, Safety and Sustainable Development Committee of the Board of Directors (EHS&SD). ii. Position in Corporate Structure: The committee chair holds the highest level of direct responsibility for climate change. CC1.2 Do you provide incentives for the management of climate change issues, including the attainment of targets? Yes CC1.2a Please provide further details on the incentives provided for the management of climate change issues Who is entitled to benefit from these incentives? Chief Executive Officer (CEO) Corporate executive team Business unit managers Facility managers The type of incentives Monetary reward Monetary reward Monetary reward Monetary reward Incentivized performance indicator Energy reduction project Energy reduction project Energy reduction project Energy reduction project Comment Annual incentives are linked to overall corporate performance. Energy efficiency and reduction projects provide a line of sight to Suncor s input costs and overall GHG performance. Annual incentives are linked to overall corporate performance. Energy efficiency and reduction projects provide a line of sight to Suncor s input costs and overall GHG performance. Annual incentives are linked to overall corporate performance. Energy efficiency and reduction projects provide a line of sight to Suncor s input costs and overall GHG performance. Annual incentives are linked to overall corporate performance. Energy efficiency and reduction projects provide a line of sight to Suncor s input costs and overall GHG performance. 4

5 Further Information Page: CC2. Strategy CC2.1 Please select the option that best describes your risk management procedures with regard to climate change risks and opportunities Integrated into multi-disciplinary company wide risk management processes CC2.1a Please provide further details on your risk management procedures with regard to climate change risks and opportunities Frequency of monitoring Six-monthly or more frequently To whom are results reported? Board or individual/sub-set of the Board or committee appointed by the Board Geographical areas considered Multiple jurisdictions (Canada & U.S.)/Enterprise Wide Approach: Suncor manages climate change risk through its corporate enterprise-wide risk management process (ERM). The ERM process addresses the scope and how risks/opportunities are managed at a company and asset level. It is viewed as a principal risk. The EHS and Sustainable Development committee of the Board of Directors, plus the Governance Committee of the Board of Directors both have an oversight role. How far into the future are risks considered? > 6 years Comment EHS&SD Board Committee: 1)meets quarterly to review effectiveness in meeting our EHS obligations & review effectiveness of EHS policies; 2)on a bi-annual basis, reviews energy intensity performance to goals & GHG regulatory compliance 3)oversees management systems that support policy compliance The CEO holds top exec responsibility for sustainability.. VP Sustainability & Communications and leadership team work with business units & internal technical reps to set operational sustainability goals & assess progress, including energy efficiency, across all areas of the business. The Sustainability group provides guidance/support to business units in measuring, monitoring, forecasting & reporting emissions performance, as well as implementing & stewarding targets, including energy intensity. Business units manage their own GHG regulatory compliance w/ support from the Sustainability team. Resp for managing env t & climate change related issues is a shared resp across the entire co. 5

6 CC2.1b Please describe how your risk and opportunity identification processes are applied at both company and asset level i. Company level Our Enterprise Risk Mgmt (ERM) process, a Finance function, assesses key strategic risks including climate change (CC) risks. Output is reported annually to the EHS & SD Committee of the BOD. The Sustainability team leads a Strategic Issues Management process to manage stakeholder & reputational issues of CC. The Env Excellence & Climate Strategy (EECS) team is resp. for: 1) coordinating company-wide strategy for managing CC risks/opportunities; 2) articulating CC public policy context & corresponding risks/opps to the business over the near ( ), med. ( ) & long term ( ); 3) assessing/advising on the regulatory & reputational risks; & 4) incorporating risks/opps related to potential consumer behaviour changes. The EECS team uses an internal GHG strategy "roadmap", a scenario-based approach to provide potential future CC risks/opps, and develops an internal forecast price on carbon emissions, to (a) support the corporate level Business Planning process & evaluation of growth projects & (b) articulate the broader long-term economic, societal & political context. Additionally, the Corporate Strategic Planning group guides Suncor s long term strategic focus/outlook. This group is resp. for scenario planning and assessing risks/opps in the broader energy system. ii. Asset level Business units annually assess key business risks/opportunities at the facility level, including CC. The output of this process escalates to the corp. ERM process. Potential physical risks posed by the effects of CC are more adequately addressed at a facility level due to the wide regional dispersion of our assets/facilities. GHG emission forecasts are also developed at the facility level to understand regulatory & product standard risks/opps. Using GHG & carbon price forecasts, business units are provided feedback on the potential impact of identified risks allowing them to adjust & optimize their planning. CC2.1c How do you prioritize the risks and opportunities identified? Suncor s ERM process employs a corporate risk matrix to assess and prioritize all risks using a common measure of impact and consequence; these risks include reputational, financial and environmental. The output of the ERM process is reviewed annually. To prioritize mitigation projects and rank specific opportunities Suncor uses internal and external marginal abatement cost curves. In addition, Suncor also uses a strategic issues management process tool that provides more insight into the non-financial risk related to climate change. The EHS&SD meets quarterly and receives, as required, climate change public policy updates necessary for this committee of the Board to make decisions or provide guidance. The Executive Leadership team receives monthly updates on energy costs and other efficiency indicators that relate to energy efficiency goals and as required, climate change public policy updates. 6

7 CC2.1d Please explain why you do not have a process in place for assessing and managing risks and opportunities from climate change, and whether you plan to introduce such a process in future Main reason for not having a process Do you plan to introduce a process? Comment CC2.2 Is climate change integrated into your business strategy? Yes CC2.2a Please describe the process of how climate change is integrated into your business strategy and any outcomes of this process i.suncor s business strategy has incorporated aspects of climate change (CC) since the adoption of our CC action plan in This requires us to manage our GHG emissions, develop renewable energy sources, invest in environmental research, use offsets, collaborate on policy development, educate employees/the public, & increase transparency of GHG emissions via effective measurement & reporting on progress. Information about these initiatives is reported internally/externally through our sustainability reporting process. The Environmental Excellence & Climate Strategy group is responsible for coordinating our strategy for managing CC risks & opportunities (e.g. articulating the likely CC public policy context, assessing regulatory & reputational risks, & potential consumer behavior changes). ii. Emerging carbon regulations, policy frameworks, incentives for lower carbon technology have influenced our strategy and/or created opportunities, evidenced by Suncor s investment in renewable & clean energy, & scientific/technological research. Suncor applies an internal carbon price to assess the economic viability of all projects.through our diversified portfolio of energy investments, we are able to apply emission performance credits from cogeneration and wind offset credits to set off against the emissions from our other operations. Adaptation requirements from potential CC related water supply stresses in the Athabasca river basin (our oil sands operating region) have also led to implementation of water reduction/recycling processes, & pilot projects on industrial wastewater treatment technologies on tailings water. Additionally, risk of potential restricted mkt access from carbon reg has also influenced our strategy toward upgrading & refining in Alberta (AB). Analysis of life cycle carbon intensity (CI) shows that oil sands crudes, our primary production, have a CI that is 5-15% higher than a conventional crude barrel. Closing this CI gap will result in increased ROI through energy cost savings, & invest in tech R&D. iii. Short term strategy components that have been influenced by climate change include: A) Energy Management System (EMS) implementation - energy use is a major input cost & accounts for the majority of our GHG emissions. Our corporate-wide EMS process is an energy audit of each facility to understand improvement opportunities and apply real-time monitoring for accurate/informative decision making. This resulted in large decreases in energy use & reduced GHG emissions at our refineries. EMS was introduced at Oil Sands in 2012, and will be completed at 7

8 remaining major facilities in B) Performance against our corporate Energy Efficiency target to reduce energy input by 10% by 2015 (2007 baseline), with annual incentives stewarded against this goal. C) Regulatory compliance - the AB regulation (SGER) requires compliance to a 12% carbon intensity reduction target from a historical facility baseline, or a payment of $15/tonne, incenting investment in efficiency and GHG reduction technologies. D) Community investment strategies Our community investment program (Suncor Energy Foundation) supports outreach initiatives by non-profit organizations in energy efficiency & energy literacy. The program provides funding & other resources to energy literacy projects, and supports academic research, think tanks, and advocacy. iv. The primary long term (2021+) strategy components driven by CC are A) our parallel path strategy of directing wealth, generated by responsible development of Canada s oil sands & other conventional energy sources, toward emerging energy solutions for the future. Our investments in emerging areas help us to understand the operational, commercial & policy frameworks necessary for success, & are driven by our recognition that climate change is real and new sources of renewable energy are critical to meet low carbon global energy supply. We operate Canada s largest ethanol facility, by volume, & are partner/operator in 7 winds farms, with 1 new wind project planned to commence operations later in 2015); Generation of wind offsets & emission production credits are used to offset compliance costs; B) CC regulation has encouraged installation of cogen (combined heat/steam for power) at our oil sands facilities through allowing us to earn offset credits for export of surplus power to the grid and displacing coal power with cleaner more efficient power from natural gas; AB s intent to reduce coal based power generation is expected to increase the role of cogen and renewables; C) targeted innovation strategy focused on technologies that reduce the carbon intensity of in situ production which includes industry collaboration leadership within the COSIA formed in 2011 between 12 corporations to share innovation & IP related to environmental improvement, with a focus on GHG reduction technologies; D) supporting CCS technology, advancement of research to make CCS cost-effective, & policy support implementation Suncor manages a pilot project evaluating application of oxy-fired boilers to CCS projects, which presents an opportunity to enhance the technology s economic viability & benefit the env t. v. Suncor s strategic competitive advantage opportunities include: (1) our strong position as a producer of low carbon power generation, supplying cogen & wind power to the AB grid, and a dedicated power trading group that can help advance this strategy may provide an advantage as policy frameworks evolve toward incenting low carbon power; (2) our ability to implement CCS as and when economic & technological factors allow; (3) our investment in early-stage low carbon technology builds options for the future. vi. Substantial commitments of resources within Suncor & as a member of COSIA toward innovative tech development/commercialization that will decrease emission intensity were made during the reporting year. This was influenced by short & long-term strategy to prepare for policy frameworks, regulatory changes & renewable/clean energy incentives. Also, in 2013, to comply with Quebec s C&T program, we created an allowance & offsets strategy to invest in the carbon offset mkt, allowing us to benefit from lower cost compliance while supporting continued sustainability & viability of the offset mkt. CC2.2b Please explain why climate change is not integrated into your business strategy 8

9 CC2.2c Does your company use an internal price of carbon? Yes CC2.2d Please provide details and examples of how your company uses an internal price of carbon (i) Suncor s emissions from its Alberta based oil sands operation measures Scope 1, 2 and 3 sources. (ii) The rationale for applying an internal price on carbon is to determine how a change to Alberta s current greenhouse gas regulation may impact our oil sands projects (which represent the majority of our compliance obligations). Suncor applies an internal carbon price that is above current regulatory costs and applies a stress test to that price. (iii) The actual price used ranged from $ $55.00, plus a range of CO2e intensity reduction targets were also considered. (iv) Internal carbon price is modelled over the life of the project. Prices vary across the different geographies and jurisdictions in which Suncor operates. As a result, a similar analysis is performed in Quebec where our Montreal refinery purchases allowances under the QC, California Western Climate Initiative starting with the floor price of approximately $15. In addition, we also explored various regulatory scenarios. (v) The Environmental Excellence & Climate Change Strategy group is responsible for establishing the annual internal carbon price outlook as one component of a comprehensive annual corporate forecast exercise. (vi) Example: Internal carbon pricing helps our operations identify not only our potential compliance costs, but energy efficiency opportunities which lowers our GHG emissions and operational costs. The impact of higher carbon penalties is just one of many risks that are evaluated as part of our rigorous project economic assessment process. CC2.3 Do you engage in activities that could either directly or indirectly influence public policy on climate change through any of the following? (tick all that apply) Direct engagement with policy makers Trade associations Funding research organizations Other 9

10 CC2.3a On what issues have you been engaging directly with policy makers? Focus of legislation Other: Alberta Specified Gas Emitters Regulation Cap and trade Corporate Position Support with minor exceptions Support with minor exceptions Details of engagement Suncor from time to time has been engaged with various levels of the Alberta Government within the Energy and Environment Ministries. Individuals include Ministers, Assistant Deputy Ministers, Executive Director of the Climate Change Secretariat and other bureaucrats. Suncor continues to engage directly with the Government of Quebec related to cap-and-trade system for greenhouse gas (GHG) emission allowances that went into effect in December The Quebec regulations are based on those guiding the Western Climate Initiative (WCI), and economy-wide emissions trading system. The WCI partners (incl Ontario, Manitoba, British Columbia & California) have agreed to cut GHG emissions by at least 15% below 2005 levels by Quebec, (annual avg GHG emissions of about 80 mill tonnes) has its own target to cut emissions by 20% below 1990 levels by Consistent with an approach taken by Calif, Quebec will include transporation emissions (vehicle tail-pipe emissions) under its emissions cap in Fuel suppliers will be accountable for covering those emissions through the purchase of allowances. Proposed legislative solution Since 2008, Suncor has advocated for an economy wide price on carbon that treats all carbon the same. Recently, in collaboration with Canada s EcoFiscal Commission, Suncor s CEO has advocated for a broad-based carbon price. Suncor supports the overall intensity base-line architecture of the Specified Gas Emitters regulation for the oil sands industry and have proposed that increases to carbon compliance be moderate and predictable in step with other jurisdictions to ensure that our products can remain competitive with global oil prices, Canada s oil and gas industry competes with American crude oil production. The US is also Canada s largest trading partner and market for our crude products, but the US does NOT impose any form of carbon tax on its oil and gas producers. Commencing 2017, Alberta s carbon levy will double to $30/t with an emissions reduction target of 20%. For our refining industry, Suncor has advocated for a Solomon Index Complexity Weighted Barrel approach be used to establish a baseline for regulation related to the refinery sector. Suncor has advocated for this individually and in collaboration with the Canadian Fuels Association. Suncor supports the Quebec cap and trade system and proposes that government regulations ensure the competitiveness of the industries it seeks to regulate while providing predictability and certainty pertaining to compliance. Energy Support Suncor is a member and a board director of the Alberta Suncor supports AEEA s position. 10

11 Focus of legislation efficiency Clean energy generation Other: Renewable Fuels Corporate Position Support Support with minor exceptions Details of engagement Energy Efficiency Alliance (AEEA), an organization that seeks to identify and promote opportunities for energy efficiency implementation. This includes advocacy for policy frameworks and programs that support energy efficiency. Through AEEA, Suncor has supported using compliance payments made by industry under Alberta's GHG regulation (Specified Gas Emitters Regulation) for incenting energy efficiency. In , through a coalition of industry and environmental organizations, Suncor engaged Federal and Provincial policy makers on a recommendation to review and prioritize energy efficiency opportunities nationally and determine an action plan to implement. Suncor remains active in progressing wind energy policy discussions. In 2013 (and ongoing), activities are focused on supporting efforts through the Canadian Wind Energy Association (CANWEA). CANWEA is progressing policy work in Alberta that examines various clean electricity policies already in place in other jurisdictions, and conducting work towards a made-in Alberta solution, tailored to Alberta s deregulated electricity market. Suncor engages both directly with Provincial regulators, as well as through associations such as CANWEA. As one of Canada s largest biofuel producers, Suncor is an active voice in biofuel policy advocacy. Through both direct engagement with regulators and through leadership at the Canadian Renewable Fuels Association, Suncor continues to support key policy instruments to promote the advancement of a sustainable biofuels industry. Canada has Renewable Fuels Standards at both a Federal and Provincial level. Canada s renewable biofuels industry is quickly maturing and is working to improve its long-term viability as current government support programs directed at first generation biofuels decline. Suncor advocates that new policy support is critical to attracting the investment required to develop advanced renewable energy options and build a self-sustaining advanced biofuel industry in Canada to complement the existing biofuel industry. Proposed legislative solution Suncor supports CANWEA`s position. Suncor supports a Renewable Fuel Standards (RFS) that recognizes the "blend wall" limitations that exist in current vehicle fleets. Additionally, the regulation needs to allow flexibility to deal with regional limitations on blending biodiesel in the winter. Suncor has advocated for a "Smart RFS" that would assign different LCA values to first and next generation biofuels, incenting incremental blending of advanced biofuels. CC2.3b 11

12 Are you on the Board of any trade associations or provide funding beyond membership? Yes CC2.3c Please enter the details of those trade associations that are likely to take a position on climate change legislation Trade association Canadian Association of Petroleum Producers Canadian Fuels Association Is your position on climate change consistent with theirs? Consistent Consistent Please explain the trade association's position Canadians expect responsible development of our oil and gas resources. The Canadian oil and gas industry fully recognizes that it must continue to do its part in addressing GHG emissions and advocates several key principles to guide the development of Canadian climate policy in Canada. Balanced 3E policy should deliver Economic growth, Environmental protection, and a secure and reliable Energy supply. Policy should be designed to drive efficient actions required to achieve emission objectives. Policy should stimulate investment in the technologies necessary for significant reductions in GHG emissions in Canada. Predictable policy built on stable principles should support long term capital investments in the upstream oil and gas sector and create jobs for Canadians. Policy should maintain competitiveness of Canadian industry, ensure compatibility with major trading and economic partners (particularly with the U.S., our largest trading partner), and compliance should be achievable within the context of growing production. Policy should distribute cost burden equitably among sectors and jurisdictions across the economy. Policy should be harmonized across jurisdictions within Canada, to an extent that is reasonable and practical. Policy should be simple and minimize the administrative burden on industry to the greatest extent possible. The Canadian Fuels Association supports climate change/ghg emissions reduction strategies and policies that allow for a clear price on carbon and ensure robust and well-functioning trading/market mechanisms. Policies must maintain a level playing field between How have you, or are you attempting to, influence the position? Suncor is an active participant in the development of policy positions at CAPP. We have over 65 employees representing various working groups and committees, several of which relate to energy efficiency and climate change. Suncor is an active participant through member participation in the development of policy positions at the Canadian Fuels Association. 12

13 Trade association Canadian Council of Chief Executives Canada's Eco Fiscal Commission Is your position on climate change consistent with theirs? Consistent Consistent Please explain the trade association's position jurisdictions, between sectors and within sectors. Refining is an energy intensive trade exposed sector. Maintaining Canadian refining industry competitiveness must be a key principle underpinning any GHG emissions reduction policy. This is best accomplished with a national approach, rather than the current federal/provincial patchwork, and one that is aligned with approaches implemented by our major trading partners, in particular the United States. Moreover, carbon pricing should be instituted as broadly and uniformly across the economy as feasible, with market-based, viable compliance options that provide flexibility and effective cost-containment. The Canadian Council of Chief Executives has recommended that a carbon price signal is the most powerful incentive for both industry and consumers to conserve energy and enhance efficiency. Coupled with the appropriate policy framework, carbon pricing can lead to innovation and new technologies that have positive outcomes for consumers and position Canadian firms to be suppliers of less carbon-intensive products and services. Its recommendations and principles with respect to carbon policy include: A clear, nationally consistent carbon price across the economy; Start at relatively low levels so as to give time for adjustment and to avoid unnecessary impacts on competitiveness; Revenue raised should fund reductions in other taxes, both to assist vulnerable consumers and to support the competitiveness of Canadian industry, as well as a portion devoted to the development of new technologies; Revenue distribution should be designed to avoid an undue cost burden on any particular region or sector; Transparent costs to Canadians are essential to stimulate smart consumer energy choices. Formed to broaden the discussion of ecofiscal policy reform beyond the academic sphere and focused on practical policy application. The Ecofiscal Commission and its Commissioners are fully independent and aim to serve policy-makers across the political spectrum, at all levels of government. They promote practical fiscal solutions for Canada that can lead to the innovation required for increased economic and environmental prosperity. How have you, or are you attempting to, influence the position? Suncor is an active participant in the development of policy positions at the CCCE. A senior leader participates and contributes to the outcomes at council meetings. Suncor s CEO is a member of the commission s advisory board and has supported the work of the commission without exception. Canadian Mixed The CRFA does not have a position on climate change legislation. Suncor, as developer of renewable energy projects, 13

14 Trade association Is your position on climate change consistent with theirs? Please explain the trade association's position How have you, or are you attempting to, influence the position? Renewable Fuels Association However, it supports those areas of regulation and policy that incent and accelerate the development and deployment of renewable fuels. generally agrees with regulations and policy positions that support this business. Where such policies result in unduly punitive or operationally impractical consequences for conventional fuels, Suncor generally seeks to educate and propose alternative solutions. International Emissions Trading Association (IETA) Consistent IETA s mandate is to facilitate the establishment of a functional international framework for trading in greenhouse gas emission reductions. Suncor is a regular member and a board director of the International Emissions Trading Association (IETA). Suncor actively participates within various IETA working groups. They include the Canadian Working Group, Ontario Working Group, California Working Group, and International Working Group. Suncor participates through monthly industry member calls as well as regular quarterly meetings established by IETA to bring government officials from all environmental ministries of the Federal and Provincial Governments from across Canada together with industry members in a forum to discuss climate change initiatives. In 2014, the IETA membership continued to collaborate with all provinces and territories to harmonize their respective GHG reporting systems with assistance as requested from an ad-hoc working group in which Suncor is a member. AEEA s does not have a position on climate change legislation. However, it supports those areas of regulation and policy that incent the maximization of energy efficiency by being an inclusive and diverse forum for communication, collaborative problem solving, coordinated action and a common voice to enhance the economic and environmental success of Alberta. Suncor is an active participant in the development of policy positions at IETA and contributes to the outcomes at meetings. Alberta Energy Efficiency Alliance (AEEA) Consistent Suncor is an active participant in the development of policy positions at AEEA and contributes to the outcomes at meetings. CC2.3d Do you publicly disclose a list of all the research organizations that you fund? No 14

15 CC2.3e Do you fund any research organizations to produce or disseminate public work on climate change? Yes CC2.3f Please describe the work and how it aligns with your own strategy on climate change Support of academic institutions, think tanks & other progressive organizations aligns with our climate change (CC) strategy by providing Suncor with research, analysis, data dissemination & other info that can be used to improve our sustainability performance and develop policy positions. Suncor is a sponsor of the following orgs that produce public work on CC: MIT Joint Initiative on Science & Policy of Global Change - an interdisciplinary team of natural & social scientists & policy analysts that integrate the various components of global system change & potential policy response.to 1) Improve knowledge of interactions among human & natural earth systems, with a focus on climate & energy/forces that drive global change; 2) Prepare quantitative analyses of global change risk & its social & enviro consequences; 3) Provide independent. assessments of potential responses to global risks, through emissions mitigation & anticipatory adaptation, contributing to improved understanding of these issues among other analysis groups, policy-making communities & the public, & 4) Augment the pool of people needed for work in this area by the education of students in relevant disciplines of economic & earth science analysis & methods of policy assessment. The Institute of International Sustainable Development (IISD) who provides progressive policy solutions in N.America, supported by individuals, companies & gov ts that have the capacity to take action. Its work includes: 1) Developing well-designed, market-based mechanisms such as effective emission trading systems to reduce costs of emission reductions, incentivize deployment of low-carbon energy tech & encourage tech transfer to less developed countries; 2) Identifying ways in which trade policy can contribute to climate mitigation efforts & areas of potential conflict between the global climate & trade regimes; 3) Promoting sustainable agriculture & forestry practices to enhance carbon storage & reduce vulnerability to the impacts of CC; 4) Providing intelligence, advice & analysis to govts & private sector on the continual evolution of nat l & int l climate policy 5) Designing & implementing tools, actions & policies to help communities & govts in developed & developing countries prepare for & respond to the impacts of CC; 6) Understanding the potential for CCs to exacerbate social tensions & violent conflicts including the role that adaptation actions may play in either promoting or undermining peace-building efforts. The World Business Council for Sustainable Development (WBCSD) - we participate in several focus areas, including their Energy & Climate Focus Area which delivers business input to the design & implementation of the post-kyoto climate architecture through an active involvement into international processes. The WBCSD informs the debate through policy & practice focusing on two key areas: 1) Bus. solutions for moving toward a low-carbon economy with tools that help companies deliver solutions, internalize carbon costs of mitigation & adaptation, as well as meas. & report the impacts of their activities; 2) Policy negotiations to adv. the international climate policy debate through an active involvement into multilateral processes, particularly the UNFCCC, but also other orgs such the OECD, the International Energy Agency or the World Bank. Suncor supports WBCSD as a means to engage with industry leading peers & stakeholders in energy & climate, to address critical ind. issues & to share ways to solutions. Exchange of best practices & specific studies are also a helpful way for WBCSD members to progress efficiently in their company specific approaches. Pollution Probe - CC Programme activities, designed to help Canada achieve its current & future CC targets. Program & research activities focus on 1) Maximizing the dev. of renewable sources of energy, such as wind, solar, small hydro, biomass, geothermal power & electrification of vehicles; 2) Forest mgmt to remove CO2 from the atmosphere; 3) the relationship between CC & health; 4) Emissions trading as a cost-effective approach to dealing with pollution, 5). the dev. of standards 15

16 for GHG reporting. The Natural Step in the development of an Energy Futures Lab (EFL) in Alberta, bringing together innovators & influencers to collectively address current & future energy challenges. Focus is on how can Canada s leadership position in today s energy system serve as a platform for the transition to the energy system that the future requires of us. Goal of EFL is to shift the public narrative around energy from polarization to new conversations focused on outcomes & a strategic transition from today s energy system to one that is fit for the future. CC2.3g Please provide details of the other engagement activities that you undertake Alberta Innovates Energy and Environmental Solutions (AIEES) Sustainable Clean Power Generation Project. In 2014, Suncor s Environmental Excellence and Climate Change Policy Strategy (EECCS) team introduced the idea of collaborating with AIEES to bring together a wide stakeholder group to jointly explore the potential merits of optimizing Alberta s electricity grid applying sustainable clean power technologies. In doing so, three objectives needed to be met: (1) achieve competitive electricity costs, (2) environmental performance and (3) possess high grid reliability. The project is divided into three segments: (1) Stakeholder workshop, (2) Scenario Modelling and Quantification, and (3) Technology Roadmap Development. Technology readiness is also separated into three time periods (1) near term opportunities ( ), medium term ( ) and long term ( ). The stakeholder workshop took place in February This is expected to be a multi-year broad based collaboration project. Through Suncor and the Suncor Energy Foundation, we ve invested in: o Canada Science and Technology Museum collaborated in the development of a national community of practice for energy literacy. o The Walrus Foundation sponsorship of a speaker series called The Walrus Talks Energy. In 2014, Talks were held in Vancouver and Ottawa highlighting various perspectives on the current and future energy system. o The Pembina Institute, supporting an initiative called Green Energy Futures, which profiles videos and stories of real people and their experiences with using green energy technologies in their homes and communities through an online multi-media platform. o Student Energy (University of Calgary) and their global activities to educate and connect people and ideas around the future of energy development o Alberta Council for Environmental Education and its efforts to develop and introduce environmental and energy literacy into the Alberta education curriculum o GreenLearning s development of an educational dialogue for high school students on the sustainable development of Canada s oil sands o Suncor employees through its Green Ambassador Program, promoting and empowering individual accountability for reducing waste and improving energy efficiency as part of our employee engagement initiative. This initiative extends from lunchtime sessions on energy conservation to recognizing employees for energy efficiency and GHG emission reduction projects through our President s Operational Excellence Awards. Quality Urban Energy Systems of Tomorrow (QUEST) is a non-profit org. that conducts research, engagement and advocacy to advance Smart Energy Communities in Canada by working with govt, utilities, the energy industry, the real-estate sector, economic regulators, and the product and prof. service sector. In working with QUEST, we seek to foster an integrated, community-based approach to resolving energy and enviro challenges. Suncor is a member and chairs the board director. 16

17 CC2.3h What processes do you have in place to ensure that all of your direct and indirect activities that influence policy are consistent with your overall climate change strategy? Suncor s Environmental Excellence and Climate Change Strategy (EECCS) team has accountability for energy and climate change policy to ensure that all engagement is consistent with overall strategy. This team coordinates all policy related activities, whether direct engagement, or engagement through trade associations. The team has clear principles for climate change policy engagement, and also documents and provides guidance and key messages across organizations. Periodically, where internal conflicts of interest arise between different business units, this team supports reaching an aligned policy position. In addition to cross-functional team collaboration the team also uses the following Suncor tools: stakeholder information management system (SIMS); strategic issues management process (SIMP); operational excellence management systems (OEMS); risk matrix; environmental excellence program (EEP); and other internal policy guidelines and standards, The EECCS team also has an internal network, supported by an internal web site. The teams meet periodically to review climate change policy related activities. CC2.3i Please explain why you do not engage with policy makers CC2.4 Would your organization's board of directors support an international agreement between governments on climate change, which seeks to limit global temperature rise to under two degree Celsius from pre-industrial levels in line with IPCC scenarios such as RCP2.6? CC2.4a Please describe your board's position on what an effective agreement would mean for your organization and activities that you are undertaking to help deliver this agreement at the 2015 United Nations Climate Change Conference in Paris (COP 21) Further Information CC2.4 - Our organization s board of directors could potentially support an international agreement between governments on climate change assuming that such an agreement is broad based and supported by all oil producing countries and embraces equitable treatment to ensure the competitiveness of our industry is not compromised. 17

18 Page: CC3. Targets and Initiatives CC3.1 Did you have an emissions reduction target that was active (ongoing or reached completion) in the reporting year? Intensity target CC3.1a Please provide details of your absolute target ID Scope % of emissions in scope % reduction from base year Base year Base year emissions (metric tonnes CO2e) Target year Comment CC3.1b Please provide details of your intensity target ID Int1 Scope Scope 1+2 % of emissions in scope 90% 10% % reduction from base year Metric Other: GJ/m3 of production Base year Normalized base year emissions Target year Comment Suncor s energy intensity goal was publically disclosed in The baseline year chosen was 2007 as 2008 was an inefficient production year which would have made goal achievement easier. This provided a realistic stretch goal for the organization. 18

19 CC3.1c Please also indicate what change in absolute emissions this intensity target reflects ID Direction of change anticipated in absolute Scope 1+2 emissions at target completion? % change anticipated in absolute Scope 1+2 emissions Direction of change anticipated in absolute Scope 3 emissions at target completion? % change anticipated in absolute Scope 3 emissions Comment Int1 Decrease 9 No change 0 Energy intensity goal would impact scope 1 and scope 2 emissions by approximately 90% when translated to tonnes CO2e (from GJ) CC3.1d For all of your targets, please provide details on the progress made in the reporting year ID % complete (time) Int1 83% 95% % complete (emissions) Comment The intent of this goal is to incent each of Suncor s business units to improve its energy efficiency by 10% or greater. Growth production is in our energy intensive business units therefore our corporate energy intensity grows over our goal period, even though each BU is expected to improve its efficiency. CC3.1e Please explain (i) why you do not have a target; and (ii) forecast how your emissions will change over the next five years CC3.2 Does the use of your goods and/or services directly enable GHG emissions to be avoided by a third party? Yes 19

20 CC3.2a Please provide details of how the use of your goods and/or services directly enable GHG emissions to be avoided by a third party i: How emissions are avoided by third parties: A. Cogeneration: Suncor is amongst the largest independent power producers in Alberta. Some Suncor facilities use cogeneration to produce combined heat for steam and power, providing them with considerable energy efficiency gains. These facilities also export a surplus of power to the Alberta provincial power grid, reducing scope 2 emissions of end user power customers by displacing coal power generation with cleaner natural gas generation. B. Wind Energy: Suncor produces renewable wind energy. The use of this power enables end users to avoid scope 2 emissions that would have otherwise been consumed through reliance on fossil-fuel power generation. The wind projects in Alberta, Saskatchewan and Ontario reduces the regional grid intensity factor. C. Biofuels: Suncor s St. Clair, Ontario ethanol plant produces biofuel that is blended into gasoline to reduce the carbon intensity of the fuel purchased by our customers in our downstream operations, thus reducing their scope 2 emissions. Suncor avoids close to 0.6 million tonnes of CO2e per year through the development, deployment and operation of renewable energy facilities. ii. An estimate of the amount of emissions avoided over time: Close to 1 million tonnes of CO2e are avoided by Suncor per year through our Renewable Energy business. This number is made up of our wind operations (approx. 400,000 tonnes CO2e) and ethanol operations (600,000 tonnes CO2e). The emissions avoided have increased over time with the commissioning of our wind farms: and ethanol plant. Our wind facilities started in 2002 with Sunbridge (SK) at 11MW in 2002, Magrath (AB) at 30MW in 2004, Chinchute (AB) at 30MW in 2006, Ripley (ON) at 76MW in 2007, Kent Breeze (ON) at 20MW, Wintering Hills (AB) at 88MW and Adelaide (ON) at 40MW. The Ethanol plant was commissioned in 2006 and expanded in However, as the Alberta grid becomes less GHG intensive with the shift from coal to natural gas, the number of GHG emissions avoided due to the operation of wind located in Alberta will decrease over time. This is related to the AB GHG grid intensity factor which was recently restated by Environment Canada at a lower value than in past years. In addition to the emissions avoided by our renewables business, our cogeneration facilities avoided approximately 2.3 million tonnes CO2e in 2014 based on the difference in GHG intensity between the AB grid and natural gas combined cycle. As the AB grid approaches a GHG intensity equivalent to natural gas, this number will also decrease over time. iii. Methodologies, Emission Factors and Global Warming Potentials: Electricity Grid Factors Environment Canada National Inventory Report, , Part 3, Annex 13 Electricity in Canada: Summary and Intensity Tables Global Warming Potentials Environment Canada Global Warming Potentials For the 2013 reporting year we have used the updated GWP s released in the IPCC fourth assessment report (2007). Assumptions Capacity factors for each contributing wind farm are assumed/calculated to be 35% (average of all wind farms). iv. Whether you are considering generating certified emissions reductions (CERs) or emissions reduction units (ERUs) within the framework of CDM or JI (UNFCCC): These avoided emissions are not eligible for generating CERs or ERUs as they occurred in Canada and Canada is not a party of the Kyoto Protocol. The wind projects that are situated in Alberta are eligible to produce offsets under the Specified Gas Emitter Regulation and Suncor has developed these offsets and used them as part of our compliance obligation for our Oilsands operation. 20