Home ESG Strategy

Highlights

  • Target of reducing GHG emissions intensity by 25% by 2025, from our 2015 level
  • Aspire to achieve net zero emissions by 2050
  • Carbon management plans and climate targets included in performance contracts for operational EVPs and SVPs
  • Third-party reviewed scenario analysis confirms long-term plan resilient to escalations in carbon pricing

Governance

Husky’s ESG Steering Committee guides the implementation of our environmental, social and governance strategy. Members of the ESG Steering Committee are those who are responsible for performance on each of the priority topics. The Chair of the ESG Steering Committee reports to Husky’s Board of Directors through the Corporate Governance Committee of the Board. In November 2019 the Board discussed ESG performance and disclosure. As of 2020, ESG is a standing agenda item at all corporate Governance Committee meetings.

Our ESG strategy is integrated with the Company’s business plans and risk matrix, and aligned with the Husky Operational Integrity Management System. The Audit Committee of the Board reviews Husky’s risk register quarterly.

Husky’s ESG strategy and performance is assessed by other executive committees as appropriate. For example, the Executive Health, Safety and Environment Committee has oversight for the topics of Safety and Operations Integrity, Water Use and Availability, Climate-Related Risks and Air Emissions and Land Use and Reclamation.

To ensure management accountability for ESG performance, the 2020 performance contracts of our operational Executive Vice Presidents and Senior Vice Presidents require carbon management plans to support Husky’s carbon target.

Some of our key metrics, including total energy use, Scope 1 and 2 GHG emissions and fresh water withdrawal, are verified through independent, limited assurance. Due to COVID-19 restrictions, assurance over selected performance indicators will be performed and published later in 2020.

Responsibly Producing the Energy the World Needs

We are an integrated, Canadian-based company with operations in Canada, the United States and the Asia Pacific region. Our first priority is safe and reliable operations. We employ more than 4,800 people across our operations and head office, generating returns for shareholders and governments from investments in a deep portfolio of projects across our Integrated Corridor and Offshore businesses.

The Integrated Corridor includes bitumen from thermal projects in the Lloydminster area of Saskatchewan and Alberta, along with the Tucker Thermal Project near Cold Lake, Alberta and the Sunrise Energy Project located northeast of Fort McMurray, Alberta. This oil production is integrated into Husky’s downstream operations, which includes upgrading, refining and marketing of refined petroleum products.

The Offshore business includes crude oil production offshore Newfoundland and Labrador and natural gas liquids production offshore China and Indonesia. Our Asia Pacific natural gas production provides cleaner-burning energy (compared against coal) to high-demand Asian markets.

Our approach to ESG issues, and the metrics we measure and report, evolves to align with what is important to the Company, our investors and our stakeholders. In 2019 we increased reporting focus on safety and operations integrity, and climate-related risks. Our 2020 ESG Report provides more detail about the actions we’ve taken to manage the risks and improve performance, and identifies opportunities to implement continuous improvement.

Map of Equity Production & Throughput

Husky's Map of Equity Production & Throughput

We have established the goal of achieving global top quartile performance in process and occupational safety as measured against industry-standard metrics by the end of 2022. In 2019 we made strong progress towards this goal.

Total Recordable Injury Rate (TRIR)

Lost Time Incident Rate (LTIR)

Process Safety Events Tier 1 & Tier 2 Combined

Another priority area is climate-related risks, including understanding physical risks to our business, changes to market demand for our products and the financial impacts. In 2019 we undertook scenario analysis and stress-testing of our business plans and improved our climate change strategy. In 2020 we set our first near-term carbon emissions reduction target, with the long-term aspiration to achieve net zero emissions from the energy we produce by 2050.

At Husky, whether it’s delivering energy each day, improving occupational and process safety, addressing climate change or promoting diversity, we aim to make a positive contribution to society.

We strive to make a positive impact in the communities where we operate: creating well-paid jobs, paying taxes and royalties to governments, using local suppliers, and supporting educational, environmental and other community not-for-profit groups.

To us, a resilient and responsible business is one where we ensure the safety of our people and communities while delivering value for our customers and shareholders. In other words, our role is to responsibly produce the energy the world needs and this report details our progress.

Approach to Climate Change

We support the Paris Agreement goal to keep the rise in global average temperature this century to well below two degrees Celsius above pre- industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius.

We are acting to reduce emissions from our operations and to provide cleaner-burning energy products such as natural gas and ethanol to our customers.

We believe more renewable energy such as solar and wind is needed in the future, and that the world will continue to use oil and gas. As such, the oil and gas sector has a large role to play in achieving the Paris Agreement goal, and accelerated innovation and investment in clean technology is required to address climate-related risks while we transition our energy systems and our economies, achieving net zero emissions production over the long term.

Emissions Targets

Husky has set a target to reduce its Scope 1 greenhouse gas emissions intensity by 25% by 2025, from our 2015 level.

To meet objectives under the Paris Agreement we, along with several other energy companies and governments, aspire to achieve net
zero emissions by 2050. Achieving our 2025 target is a start while we continue to invest in new technologies and carbon offsets that will bring us closer to this goal.

Climate Change Management

Starting in 2020, all Husky business units will maintain a carbon management plan, including requirements to meet or exceed our 2025 25% Scope 1 emissions intensity reduction target. Reporting to the CEO, each operational Executive Vice President and Senior Vice President performance contract includes carbon management plans and climate targets, which are directly linked to executive pay-for-performance compensation.

Scenario Analysis

Scenario analysis helps assess our resiliency against different oil and gas demand scenarios, including one where global warming is limited to a less than two-degree Celsius temperature rise. In 2019 we undertook a portfolio-wide assessment, referencing the International Energy Agency’s Sustainable Development Scenario as interpreted by the Canadian Energy Regulator.

Husky supports the work of the Task Force on Climate-related Financial Disclosures (TCFD). Using the TCFD’s categories, our analysis focused on the two elements we deemed most likely to potentially be material: carbon price and commodity price.

As a two-degree scenario suggests the potential for rising carbon prices, we incorporated assumptions about probable carbon pricing into our long-range planning, acquisition and divestment, and investment decisions. Our scenario analysis tested an alternate set of prices and application, based on the International Energy Agency and Canadian Energy Regulator cases. We found that over its 10-year life, our current long-range plan is resilient to escalations in carbon pricing.

While the two-degree scenario shows a plateau in oil demand out to 2050, it doesn’t reflect the significant price volatility possible in the near term, as witnessed over the last few years and particularly in early 2020. Our scenario analysis indicated that the commodity price assumptions we use for planning and investment are conservative, and adequately ensure our production is resilient in low commodity price environments. Maintaining our strong balance sheet and preserving optionality for future capital investments protects us from more severe short-term fluctuations.

Our climate scenario analysis work was third-party reviewed, and we will address recommendations and implement what we have learned as we continue to improve our scenario analysis process.

Priority Topics

ESG topics which can significantly affect Husky’s performance and long- term sustainability and/or inform investor assessments and decisions are considered priority topics. We first formally identified topics in 2018 through interviews with internal subject matter experts, facilitated by third-party experts and later confirmed using an internal survey.

Our internal interviews include employees who regularly engage with our stakeholders, including investors, analysts, financial institutions, rating agencies, Indigenous Peoples and other community members, and governments and regulators. We use this input to inform our priorities, which are reviewed by senior executives and approved by our ESG Steering Committee.

Each priority topic is further assessed through the development of a maturity scale, with all nine maturity scales expected to be completed by the end of 2020. The maturity scales document the current status of each topic and identify priority actions to improve performance. We plan to continue refining these topics to focus more closely on those deemed to potentially be material.

We detail in this report our programs that support each of the priority topics, as well as information on our performance. Our performance data table provides quantitative information and is aligned with the voluntary sustainability reporting guidance developed by IPIECA, the International Association of Oil & Gas Producers (IOGP) and the American Petroleum Institute (API). This year we have also indicated where our disclosure aligns with the expectations of the Sustainability Accounting Standards Board (SASB) and the United Nations Sustainable Development Goals (SDGs). We highlight actions in the report where our efforts support the SDGs, illustrated with a symbol, and describe how our strategy is aligned.

Husky continues to monitor the development of external frameworks and supports efforts to standardize and reach consensus on key performance indicators.

Boundary and Approach

This report includes all operated assets within our Integrated Corridor and Offshore businesses, which are detailed in this section, unless otherwise noted. We do not operate the BP-Husky Refinery, the onshore gas plant associated with our Liwan Gas Project, the BD Project in Indonesia nor the Terra Nova oil field in the Atlantic region.

Topic Definition
Safety
Safety and Operations Integrity

Become global top quartile in process and occupational safety by the end of 2022.

Promote a safety culture through embedding the principles of a High Reliability Organization and applying our systems, processes and continued learning to prevent employee and contractor injuries and illnesses.

Design, maintain and operate facilities and assets focused on process safety and asset integrity to realize strong operational performance.

Prepare, plan and practice to respond effectively to incidents with worker and community safety and environmental protection as priorities.

Economic
Business Resilience Maintain strong financial discipline, with a focus on generating free cash flow and returns, while investing in higher-margin growth opportunities.
Innovation and Advanced Technology Identify, evaluate and invest in technology advancements to improve environmental and financial performance.
Environmental
Climate-Related Risks and Air Emissions Target to reduce Scope 1 GHG emissions intensity by 25% by 2025.

Maintain ongoing management and governance of climate-related risks, with the goal of reducing greenhouse gas emissions and other air pollutants through the development and application of new technology and energy efficiency measures.
Water Use and Availability Comply with regulations and explore innovative opportunities to responsibly reduce, recycle and re-use as much water as is economically feasible.
Land Use and Reclamation Manage land use through mitigation and restoration, and avoidance of disturbance.
Talent Management and Culture of Inclusion Attract, develop and retain top talent and ensure an inclusive, diverse and respectful workplace.

Target of 25% women in executive roles (VP and above).
Community and Indigenous Peoples’ Engagement Contribute positively to quality of life in communities where we operate by reducing negative impacts and creating benefits.
Governance
Business Ethics and Transparency Obey the law, report accurately to investors and stakeholders, and act ethically in accordance with the principles of good governance.

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Safety and Operations Integrity
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