P1252428268zSPer

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Suncor Energy Inc.
Globepreneurs James Huberts Kelvin
Malpartida Gwen Robak Lepine Suzanne
Samborski Mike Williams
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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

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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

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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

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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

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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

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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

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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

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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

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Sustainability Drivers

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

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Sustainability to Date
Measuring up against the Triple Bottom Line

• Environmental Sustainability
• Social Sustainability
• Economic Sustainability

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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

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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

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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

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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

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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

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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

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Sustainability to Date
Economic Sustainability

• Transparency
• High degree of disclosure
• Use of independent auditors
• 24 hour integrity hotline for employees

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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

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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

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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

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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

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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)

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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

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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

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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