Sustainability Governance and Stewardship

Corporate Responsibility

Sustainability Governance and Stewardship

Our Corporate Management Committee, a group comprised of Canadian Natural’s senior executives who share the responsibilities normally associated with a Chief Executive Officer position, approves the Stewardship Report to Stakeholders as delegated by the Board of Directors. Three members of the Management Committee are also directors of the Company — the Executive Chair, Executive Vice-Chair and the President.

Our teams work together with management and all operating areas to ensure safety, asset integrity and environmental stewardship are factored into our decision-making process. Senior Management supports our teams by ensuring adequate resources are in place to implement programs, maintain documentation and conduct training. Training is essential to ensure knowledge on critical procedures for Canadian Natural’s staff at all levels.

Our governance structure, including our Board, Management Committee and Operations Committees, is supported by policies and controls (including performance standards) that influence our decisions at every level of the Company.

Canadian Natural’s Health, Safety, Asset Integrity and Environmental Committee (HSAI&E) of the Board of Directors meets every quarter to discuss stewardship matters. The Directors in the HSAI&E Committee oversee and monitor company-wide efforts to support, manage and improve our performance, and ensure the effectiveness of health, safety, asset integrity, environmental risk and social programs. The HSAI&E Committee also reviews internal stewardship reports about objectives, performance and key performance indicators. The Health and Safety, Asset Integrity, Environment, Stakeholder Relations and Community Investment groups report on a regular basis to Senior Management, who in turn provide updates to the HSAI&E Committee.

Canadian Natural’s Board of Directors brings a mix of experience, knowledge and understanding gained through senior level positions held in the public and private sectors. Our directors bring expertise from a range of sectors, such as oil and natural gas, energy storage solutions, technology, legal, finance, health, and retail, where leadership and governance over corporate social responsibility matters have been a longstanding priority. Specifically, seven directors have relevant experience in the area of climate change/carbon policy, and eight directors have relevant experience in the areas of health, safety and environment.

Canadian Natural’s Board Committees are described in detail in the most recent Management Information Circular, including the Board’s expertise and experience in Schedule A. Governance policies are available on this page.

Managing climate risk and governance

Aspects of climate change risk that most influence the Company’s business strategy are: future compliance costs/regulatory changes, access to markets, social preferences/reputational risk and technology development. Canadian Natural provides ongoing reporting on how we are addressing climate and environmental related financial risks.

Canadian Natural uses a multi-disciplinary risk management process, which considers climate change risks and opportunities as part of our business evaluation. Our business strategy is influenced by incorporating knowledge of climate-related risks and opportunities, including current and potential policies and regulations, into decisions made by our Management Committee. Several bodies take part in this governance approach, including:

  • Management Committee is responsible for the identification, assessment and management of climate change risks.
  • Management Committee and the Greenhouse Gas (GHG) Operations Strategy Committee provide direction and guidance to business units on climate-related risk assessment and project implementation.
  • GHG Operations Strategy Committee is responsible for climate change strategy and issue prioritization. This Committee oversees our working groups that manage and coordinate GHG reduction and technology projects across the Company, such as the cross-functional Methane Working Group. The GHG Committee also assesses and provides input on current and developing GHG policy and regulation.
  • Nominating, Governance and Risk Committee of the Board reviews the status of risk monitoring activities, including climate-related regulatory and operational risks, and the steps Management has taken to implement mitigating actions.
  • HSAI&E Committee of the Board is responsible for ensuring that Management has effective design and implementation of environmental risk programs, controls and reporting systems.
  • Board of Directors is responsible for overseeing and ensuring that the Management Committee has appropriate and effective measures in place to manage climate-related risk.

Climate risk management also occurs at the asset level through recurring projects and reviews, as well as economic evaluations, including forecasting GHG intensity and compliance costs, and reviewing abatement projects. Internal quarterly management reviews are completed to monitor GHG emissions performance. As per regulatory requirements for specific facilities and/or jurisdictions where we operate, GHG emissions reports are submitted annually.

Executive compensation is linked to the Company’s annual performance targets, which include emissions intensity and safety metrics. This helps align executive officer performance with the Company’s objectives and shareholder interests, driving continuous improvement year over year. For more information on the Corporate Performance Scorecard, read our Management Information Circular, pages 36 and 37.

Resiliency in a lower carbon emissions economy

The world is transitioning to lower carbon emissions methods of producing and consuming crude oil and natural gas. Canadian Natural’s large, diversified and balanced portfolio is well positioned to be resilient in a lower carbon emissions economy. With a portfolio that consists of long life low decline assets, we will continue to create long-term value and opportunities to drive lower GHG emissions through continuous improvement and investments in technology.

Canadian Natural reviews external climate change scenario analyses from energy firms/agencies, which incorporate a wide range of assumptions on markets, policy, technology, efficiency, and other key variables. On that basis, Canadian Natural developed two internal scenarios to assess potential business risks and opportunities, and test resilience: a “Reference Scenario” based on current policies, and a stricter “Constrained Scenario” aligned with the Paris Agreement’s long term-goal of holding the increase in global average temperature “well below two degrees Celsius”.

Across the range of ambitious climate change scenarios, it’s expected that crude oil and natural gas demand will continue to be a significant part of the energy mix, and Canada is well positioned to be a global supplier of a premium, low carbon emissions intensity product for decades to come. As a result of Canadian Natural’s GHG management strategy, our reserves face limited risk even under more ambitious climate change scenarios. For example, to meet the IEA 2018 Sustainable Development (most stringent) climate scenario, we would still have oil demand close to 70 million b/d in 2040.

Canadian Natural, and industry as a whole, is working hard to respond to environmental challenges. Industry investment in technologies and research has increased more than 10 times in the last 20 years, reducing environmental footprint and costs to be leaders in creating the cleanest upstream products in the world.

Further details on environmental risks, GHG emissions management strategies and climate change policies and regulations can be found in our Annual Information Form and Management Information Circular, as well as in our 2019 CDP Climate Change Submission.