Helping business toserve shareholders AND society

SIMULTANEOUSLY

-by Wayne Dunn

Canadian Oil Sands

the lesser of several evils

Canadian Oil Sands the lesser of several evils

Clumsy government support of

Canadian Oil Sands industry

is hindering the industry’s

development and risking its social

license

Which is better for the planet

Originally published in

Triple Pundit - http://bit.ly/1NgKIkJ

Oil sands with an environmental impact that can be improved?

Or

Middle East energy with a conflict and human rights impact that is a lot more difficult to deal with.

If Canada wants the oil sands industry to develop and thrive, and produce the economic value and benefits we all need, then we need to rethink both industry environmental regulation AND Canada’s overall approach to climate change and global environmental issues.

Page 02

If not, the industry risks losing an increasingly tenuous social license and the Canadian economy risks losing tens of thousands of jobs and tens of billions of future investment.

And the world risks trading carbon intensive energy for war, strife and human abuse intensive energy.

The Canadian Oil Sands industry is under global pressures from social and environmental fronts. And this at a time of plunging global prices that is eroding the industry’s financial license.

Foreign governments, markets, NGOs, celebrities and others are actively protesting the operation and expansion of the industry, focused mainly on the carbon cost that is embedded in the energy from carbon intensive production and processing methods.

It is interesting that these groups are targeting Canadian oil sands production when energy from other areas like the Middle East comes with unacceptable levels of human rights, conflict, military and other costs.

Few seem to be doing the calculus that would objectively compare the socio-environmental cost of Canadian oil sands and Middle East energy production. I strongly suspect that it is much easier to address the carbon and environmental impact of the oil sands than it is to address the human rights, conflict and military costs of Middle East energy.

I also suspect that part of the reason that the carbon calculus vs the human rights and conflict calculus isn’t done is (at least partly) because Canadian government ‘support’ and Canada’s emergence as a climate change dawdler has helped to make the oil sands an easy international target.

Canadian Oil Sands the lesser of several evils

Page 03

Despite, or as a result of, a national government and regulator that has been a strong cheerleader for nearly ten years, the industry is in much difficulty. It is facing global activism and opposition and has not been able to get its production to global markets. Pipelines are stalled and market access looks increasingly difficult.

These are directly related and have created an, at best, very tenuous social license for the industry. The Canadian government, who is also the national regulator, has supported the industry in ways that have undermined its environmental credibility globally.

Recent revelations in the Guardian (Canadian government spent millions on secret tar sands advocacy) put more strain on the government’s role as an objective regulator and give fuel to opponent’s arguments.

A robust industry requires technical and economic viability as well as some level of societal acceptance. An industry with international and global markets requires societal acceptance; requires an industry social license.

While individual projects and companies can, and do, develop their own project or brand level social license, many industries also need some level of industry social license.

In order to achieve societal acceptance (social license) industry must be seen to be making a net positive contribution to society and have an acceptable environmental risk and cost. Notice I said ‘be seen to be making a net positive contribution’. Perception is reality.

The Oil Sands is a carbon intensive industry and carbon and climate change are increasingly critical global issues.

In the case of the Canadian Oil Sands there is a public perception (domestic and global) that the industry is a global environmental bad-boy.

Canadian Oil Sands the lesser of several evils

Page 04

Canadian government’s support for the industry, including considerable tinkering with environmental regulation, coupled with the carbon intensive nature of the industry, has given industry critics plenty of ammunition and credibility.

Canada’s increasing laggardness on the global climate change file has further eroded the perceived credibility of our environmental regulatory system, and, as a direct consequence, the trust that the Canadian and global public has in the environmental performance of key industries such as the Oil Sands.

If Canada wants to see the socio-economic benefits of a socially and environmentally responsible oil-sands industry it needs to start by rethinking how it is supporting the industry and how it is engaging in the global climate change issue.

It may be counter-intuitive, but more stringent and credible environmental regulations will help the industry rather than hurt it.

And, hopefully, force opponents to do the hard, but important work of comparing the socio-environmental costs of energy from Canada’s oil sands with energy from the conflict ridden Middle East.

I suspect that comparison would favour Canada’s oil sands and also push them to better address their carbon intensity - and at the same time take a small bit of fuel from the Middle East tinderbox.

Canadian Oil Sands the lesser of several evils

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Four Strategies forLocal Content Success

Professor Dunn brings a practical and realistic approach to CSR, blending theory and practice to develop realistic models and approaches to address real-world challenges

Dr. Ellis ArmstrongFormer CFO, BP Exploration

…coherent, thoughtful, stimulating and insightful… state of the art! The network of participants from the public, private and civil society sectors was incredible, some of the leading experts in the field.  

Kojo Busia, Ph. D.Snr. Mineral Sector Governance AdvisorUnited Nations Economic Commission for Africa/UNECA

…pragmatic blend of theory and practice, very applicable to helping organizations meet real-world challenges.

Frank McShaneManager, Corporate Responsibility Policy and Ethics, Talisman Energy

… readily available to provide support to organizations like Amref that are seeking partnerships, and looking to bring about positive change in a collaborative and concrete way. Wayne and the CSR Training Institute helped us to identify and connect with potential partners and are always available. The training, the expertise, the network and the overall support are world-class.

Onome AkoDirector of Strategic Partnerships, Amref Health Africa

“The program enhanced the CSR knowledge and strategic skills of our Kosmos Energy Ghana team, and offered the participants a platform for networking with professionals from other organizations across Africa and Ghana.” 

Reg ManhasSr VP Kosmos Energy

Very much helpful Wayne; some of the tips and questions you gave will be an extremely helpful guide in the process of developing a CSR Strategy for my company.

Emmanuel AubynnRegional Social Responsibility Manager, Newmont Africa

The CSR Program was excellent. A key aspect of my work is to encourage and support private sector development that contributes to Ghana’s overall socio-economic growth. The learning that I and my staff take away from attending this program will help us immensely with this responsibility. I highly recommend this program.

Hon. Rashid Pelpuo (MP)Minister of State for Private Sector Development and Public Private Partnerships (Ghana)

New and exciting insights into the theory and practice of CSR… great faculty and participants, very diversified. An excellent learning experience, very practical and useful. I’m very happy I was able to participate in it.

Hon InusahFuseini (MP)Minister of Lands and Natural Resources (Ghana)

WHAT OTHERS SAY ABOUT OUR WORK

Should Business Serve

Helping business to serve society andshareholders, SIMULTANEOUSLY.

Should Business Serve

WAYNE DUNN, PRESIDENT AND FOUNDER

SHAREHOLDERS?

SOCIETY?IT SHOULD SERVE BOTH.

Wayne Dunn is President & Founder of the CSR Training Institute and Professor of Practice in CSR at McGill. He’s a Stanford Sloan Fellow with a M.Sc. in Management from Stanford Business School.

He is a veteran of 20+ years of award winning global CSR and sustainability work spanning the globe and covering many industries and sectors including extensive work with Indigenous Peoples in Canada and globally. His work has won major international awards

and has been used extensively as ‘best-practice’ by industry and academia.

He’s also worked oil rigs, prospecting, diamond drilling, logging, commercial fishing, heavy equipment operator, truck driver and underwater logging, done a couple of start-ups and too many other things to mention.

Wayne’s career includes big successes, and spectacular failures. He hopes he’s learned equally from both.

www.csrtraininginstitute.com