Suncor Energy : 2023 Climate Report

Climate Report 2023

		Introduction	Strategy and
			objectives
Table of contents
n Introduction		3
	Executive message		3
	Data restatements		5
	Our purpose and report highlights		7
n Strategy and objectives		8
	Greenhouse gas objectives		8
	Reduce emissions in our base business	11
	Expand low-emissions businesses		16
	Work with others to reduce emissions		21
n Governance and risk management		23
	Climate governance		23
	Climate risk management		26
n Performance and metrics		32
	Relative performance of energy products	32
	GHG emissions		33
n Appendix		38
	Glossary		39
	Performance data		42
	Performance data footnotes		45
	Advisories		49

Governance and	Performance	Appendix
risk management	and metrics

Suncor Energy Inc. | Climate Report 2023 | 2

Introduction	Strategy and
	objectives

Governance and	Performance	Appendix
risk management	and metrics

Introduction

Executive message

• Executive message
• Data restatements
• Our purpose and report highlights

Kris Smith

Chief Financial Officer and	Arlene Strom
Executive Vice President, Corporate Development	Chief Sustainability Officer

Suncor's climate objectives depend on decarbonizing our operations and expanding low-carbon businesses. In this way, we are supporting the energy transition in line with social and consumer expectations and contributing to global energy security, which is underpinned by all forms of energy. Both responsible and secure energy is needed to create a more resilient business - and world.

The strength of Canadian energy is that it is abundant, reliable and backed by achievable climate goals put forward by industry. In fact, within an 18-month period, the oil sands sector announced its ambition to be net zero in its operations and then developed a pragmatic plan to achieve it.

Critical to meeting our climate objectives is the right mix of incentives and fiscal frameworks to make our investments in decarbonization and energy expansion economically viable. Government plays a critical role here in implementing broad-based carbon pricing with effective

credit mechanisms, providing economic incentives, and streamlining policies and regulations. Canadian climate policy is challenging, with a multitude of layers not found in other countries and a focus on regulatory measures. On the other hand, we've seen a strong push for financial incentives in jurisdictions that are keen to promote all forms of low-carbon domestic energy supply, such as Europe and the United States. Simplicity of regulations and fiscal frameworks, balanced with strong economic incentives, will drive certainty for the investment needed to achieve net-zero emissions by 2050.

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Introduction	Strategy and
	objectives

Executive message

Governance and	Performance	Appendix
risk management	and metrics

Without this investment and regulatory certainty, there is a real risk of capital flow and carbon leakage outside of Canada, which would diminish the robustness of our industry and our overall Canadian competitiveness. Canada risks falling behind the US, our largest trading partner, especially as it relates to the acceleration of carbon capture and storage (CCS) projects. We need to act, we need to act quickly and we need to act together.

An area of unprecedented collaboration, in terms of shared costs and shared public benefits, is the Pathways Alliance. It is a consortium of Canada's six largest oil sands producers working together with federal and provincial governments to find ways to decarbonize our sector and help Canada meet its climate goals. The Pathways Alliance achieved a critical milestone early in 2023 when it was selected by the Government of Alberta to advance exploratory work for a proposed CCS network in northern Alberta. The project could see more than one billion tonnes of CO2 stored safely underground. Significant upfront work has been critical but much more work needs to be done, including engagement with more than 20 Indigenous communities. Detailed engineering and field work is progressing rapidly to support a regulatory application later in 2023. This kind of collaboration is key given

Kris Smith

Chief Financial Officer and

Executive Vice President, Corporate Development

the scale of investment required in CCS initiatives. The opportunity to demonstrate global leadership within the energy sector and contribute in a meaningful way to reducing Canada's overall greenhouse gas (GHG) emissions is even more profound.

Our seventh Climate Report and our latest Report on Sustainability show how pivotal this past year has been for Suncor in taking focused action to achieve our climate objectives. With respect

to energy expansion, we've lasered in on technologies that fit our core business. This meant we sold our wind and solar assets and prioritized investments in low-carbon fuels and hydrogen - businesses and technologies that connect to our core strengths and which, with prudent investments, offer great potential for growth and scale. Suncor's decarbonization plan for our core business continues to take shape with several large projects identified - anchored on CCS - that will be achieved through collective and Suncor-specific action. We've taken the additional step of linking executive compensation to climate objectives by incorporating enhanced performance metrics centred on the health of the GHG portfolio, the allocation of capital and the achievement of emission reductions. We invite you to read on for more information on our plans, performance and progress.

Arlene Strom

Chief Sustainability Officer

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Introduction	Strategy and
	objectives

Governance and	Performance	Appendix
risk management	and metrics

Data restatements

We are changing the way our data is presented within our reports to better represent our integrated model and reflect full operatorship of the Syncrude Project.

Suncor is an integrated energy company focused on oil sands mining and in situ operations, refining and upgrading, and crude and product marketing. We upgrade and refine bitumen into synthetic crude oil and refined products, and sell bitumen and synthetic crude oil to other producers for refining and upgrading. The scale and strength of our physical integration across the value

chain, from production to retail sales, is difficult to replicate. Our oil sands base business is supplemented by offshore oil production and we have made strategic investments in low-carbon power and biofuels to complement our base business. Our energy trading activities focus primarily on the marketing and trading of bitumen, crude oil, refined products and power.

Suncor's production activities and resulting products

Hydrocarbon business

Power business

Cogeneration	Oil sands mining	Upgrading	Refining
and in situ

Bitumen

Electricity Offshore crude Refined products Renewable fuels Synthetic crude

Third-party refining feedstock

Offshore	Renewable	Retail/Market
fuels

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