Suncor Energy Inc. | Suncor Shareholder Proposal No. 2 Climate accounting

Status
AGM passed
AGM date
Previous AGM date
Proposal number
2
Resolution details
Company ticker
SU:CN
Resolution ask
Report on or disclose
ESG theme
  • Environment
ESG sub-theme
  • Climate change
  • Net Zero / Paris aligned
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Energy
Company HQ country
Canada
Supporting materials
  • Suncor Climate Accounting Investor Memo 2024 final.pdf Download
Resolved clause
That Suncor disclose audited results assessing a range of climate transition scenarios on the assumptions, costs, estimates, and valuations underlying its financial statements, including those related to long-term commodity and carbon prices, remaining asset lives, future asset retirement obligations, capital expenditures, and impairments. The results should be released no later than the publication of the 2025 Annual Financial report and be produced at reasonable cost and omitting proprietary information
and omitting proprietary information.
Supporting statement
Suncor faces greater uncertainty and risk from the energy transition than ever. Current implemented climate action has changed future energy scenarios with predicted global demand for oil peaking this decade and a faster decline if more ambitious climate action results in an even faster decline in oil demand.

The looming peak in oil demand changes the longstanding assumption of a never-ending growth in global demand for oil. Investors now need Suncor to provide more robust financial reporting to account for the risks, challenges, and potential opportunities of a changing market.

As the investor-led CA100+ Climate Accounting and Audit Assessment found, Suncor has significant room to improve its financial reporting on “the financial effects of climate-related risk and the global move onto a 2050 (or sooner) net zero greenhouse gas (GHG) emissions pathway.”

Suncor is highly focused on its oilsands business at a time when those assets face heightened cost and carbon risks relative to conventional oil. Suncor is proposing carbon capture and storage as a solution, yet there has been a lack of disclosure on feasibility, cost, specific emissions reductions, and regulatory compliance for this technology.

Suncor discloses in its 2023 CDP report that its refining business faces a “more likely than not” medium term financial risk of $1.89b – a 33% decrease in revenue – to its refining business from “decreased revenues due to reduced demand for products and services.” This potential risk raises questions about transition risk to other parts of Suncor business and underlines the need for Suncor to provide investors with more robust financial reporting on the assumptions, costs, estimates, and valuations from a range of potential energy transition scenarios in its financial statements.

Reporting is needed to provide more clarity and transparency on the impacts to the company in the short term (1-5 years) and medium term (5-10 years) of a changing energy market.

Shareholders therefore request that Suncor provide more robust disclosure in its financial statements to enable investors to better assess the risks and opportunities that Suncor faces in the energy transition. We respectfully request that shareholders vote FOR this proposal.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
NEI Investments For While we agree with the company that it has shown industry leadership in advancing sustainability-related disclosures and acknowledge the challenges of navigating a changing disclosure landscape, we believe that companies should be disclosing on the material impacts of climate change under existing disclosure requirements and that the requested information would help investors better understand the resilience of the company's strategy. Further, the company already reports in its non-financial reporting that it uses a range of climate scenarios to stress-test its business across several key dimensions, and we believe the insights gained from this exercise would be beneficial for investors as well.

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