In recent years, global consumers have become increasingly aware of the social implications behind the products they buy. As a result, companies around the world are focusing intently on sourcing more raw goods and materials from Environmental, Social, and Governance (ESG) leaders to appeal to their clientele base and paint an eco-friendly picture for investors.
In essence, a high ESG score reflects sustainability and low societal impact related to the extraction and production of a given resource.
Canada’s oil and gas industry, for example, ranks number one for ESG practices among nations with the largest oil reserves, and of the world’s top 20 producers, 2nd for governance and social progress and 4th on the environment. Our ESG record shows that we are home to one of the most environmentally conscious and sustainable oil and gas industries in the world.
So, the question remains: if the world truly is moving towards a "sustainable first" awareness when it comes to supply and investment into industry, then why is Canada seemingly not a supplier of choice for crude oil? For example, while the U.S. accounts for more than 95 per cent of our petroleum exports, shutting down pipelines like Keystone XL and potentially Line 5 suggests that our southern neighbour would rather import these products from South America or the Middle East.
Canada is a Global ESG Leader
Canada’s natural resource sector – a major global supplier of energy, agricultural, forestry, and mining materials and products – already enjoys a world-class record on overall ESG performance.
With strong ESG reporting, Canadian resource companies should have the opportunity to maintain their production in an increasingly competitive global trading system while growing their market share and becoming suppliers of choice for buyers looking to get their oil and gas from a sustainable source.
But is that what's actually happening?
Recent events like the cancellation of the Keystone XL pipeline, the attempt to shutdown Line 5 and continued resistance from “environmental” groups against Line 3 and the Trans Mountain Expansion would suggest otherwise.
Protesting and shutting down Canadian pipelines carrying Canadian oil does not keep one barrel of oil in the ground. All it does is cede market share to less responsible oil producers who score much lower than Canada on ESG metrics.
What we are left with is three important questions:
#1 - Where’s the global focus on the social implications related to sourcing oil and gas from less environmentally responsible producers, some of whom have abysmal records when it comes to regulatory transparency and upholding human / worker's rights?
#2 - Where's the global focus on sourcing raw goods and materials from responsible suppliers with exemplary ESG scores?
#3 - Why can’t anti-oil and gas development protesters see how their activism adversely affects the global human rights and the environment by displacing oil supply from Canada to less environmentally responsible nations?
Canada’s ESG Record Deserves Praise
Here’s just a few examples as to why Canada's resource industries deserve praise when it comes to Environmental, Social, and Governance metrics. Canada:
- ranked 2nd on the Global Cleantech Innovation Index 2021
- ranked 5th on the Democracy Index 2020
- ranked 6th on the Global Peace Index 2020
- ranked 7th on the Social Progress Index 2020
- ranked 9th on the Rule of Law Index 2020
- ranked 11th on the Corruptions Perception Index 2020 (to clarify, the lower score, the less corrupt a nation is)
- ranked 11th on the Women, Peace, Security Index 2019/20
- placed 14th out of 76 global economies on the Green Future Index 2021
- ranked 16th on the Global Press Freedom Index 2020
- tied for 20th place on the Environmental Performance Index 2020
- ranked 21st on the Sustainable Development Index 2020
How Canada's Oil & Gas Industry is Taking Climate Action
Canada’s oil and gas industry is also a global leader on emission intensity, water use and gas flaring reductions, as shown in a handful of our recent blogs highlighting the sector’s ESG performance:
- Yes, We Can Have Both Canadian Oil & Gas and Climate Action
- Canada’s Oil Sands Sector an ESG Leader: Report
- Why Does the World Need More Canadian Oil?
Canada Should Be a Global Supplier of Choice
Canada is losing out on an opportunity to grow oil production and account for more market share on the world stage due to false narratives surrounding the Canadian oil sands and the energy sector as a whole. This does not only hurt Canadian families, government revenues and our economy, but also the global effort towards a more sustainable future.
While the oil and gas industry in Canada can always do better, it deserves to be recognized as the global ESG leader it is – nothing else.
When will buyers start acting on their "sustainable first" initiatives and start choosing Canada as a global supplier of choice for oil and gas? That's the real question.
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The ESG-related indexes above all point to one thing: that Canada should be a global supplier of choice for the raw materials and goods that fuel our global society whenever possible.
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Canadians don’t have to choose between supporting climate action and backing our oil and gas industry. It’s in our best interest to build bridges and work together, for the good of our national economic prosperity and the global environment. Each of us has a responsibility to...
Key Points Canada ranked 2nd on the Global Cleantech Innovation Index 2021, behind the U.S. but in front of Germany, France, and the U.K. 11 out of 100 companies listed are Canadian, the second highest amount for any country Canada is a global leader in clean technology and i...
Key Points • Canada ranked 14th on the Green Future Index 2021 globally, and the 2nd highest out of the world’s top 15 oil exporters • Canada's exceptional performance on the index is supported by the revenues from Canada’s natural resources sector • Canada is a global leader ...