Our Approach to Governance
As a responsible energy producer, Vermilion believes that we can best deliver long-term value by operating in an economically, environmentally and socially sustainable manner that recognizes the importance of all our stakeholders.
We believe that integrating sustainability principles into our business increases shareholder returns, enhances development opportunities, reduces long-term risks, and supports the wellbeing of key stakeholders, including the communities in which we operate.
Vermilion has established a leadership position in sustainability performance and disclosures since 2013, aligned with the Global Reporting Initiative (GRI). We have since integrated the Task Force on Climate-related Financial Disclosure (TCFD) and the Sustainability Accounting Standards Board (SASB) frameworks, and are moving toward the International Sustainability Standards Board (ISSB) S1 and S2.
Our discussion of Governance is also included in our annual Information Circular, with the discussion of Strategy, Risk Management, and Metrics and Targets also contained in our Annual Report. This recognizes the importance of climate-specific disclosure while reflecting its intersectionality with other environment-related risks and opportunities, social factors such as safety and community engagement, and governance-related matters.
Integrated Sustainability is one of six strategic objectives that link together in our long-range business plan (see Our Approach to Business). The Board has responsibility for overseeing Vermilion’s sustainability- and climate-related strategy and performance, including direction, goals and targets, with Board committees providing additional sustainability-related expertise in their areas of focus:
-
Audit
Risk management and internal control systems, including cybersecurity -
Governance and Human Resources
Executive and director compensation; talent management, succession planning and development of senior management and critical skill employees; governance practices and processes, including director training and development; and human resources including culture and employee engagement -
Health, Safety and Environment (HSE):
Occupational, process and asset safety; environmental stewardship; risk management; and HSE-related sustainability initiatives;
-
Technical Reserves
Reserve reporting; operational excellence; portfolio technical risk -
Sustainability
Energy transition, including emission reduction targets; and social impacts, including human rights, community investment and government and other stakeholder relations.
Board and Commitee mandates, available on our external website, include sustainability-related roles and responsibilities.
The Board and Sustainability Committee receive briefings and performance reports quarterly that include ESG performance, sustainability activities, updates from business unit leaders, environmental and social trends, and strategic community investment activities. These are augmented with continuing education from third parties in fields such as climate change and the energy sector, the energy transition, and ESG factors in institutional investment.
The Sustainability Committee provides oversight for the long-range sustainability strategy, its implementation, progress including key performance indicators, and methods of communicating sustainability policies and performance. The committee also identifies and reviews emerging risks and opportunities associated with sustainability issues, and their integration into Vermilion’s enterprise risk management framework and policies.
The committee Chair reports to the Board on the committee’s work; in addition, reflecting the holistic way in which sustainability issues impact the Company, most members of the Board attend Sustainability Committee meetings. Thus, sustainability- and climate-related information is considered when the Board oversees major decisions, such as long-range planning, budget and capital allocation, and mergers, acquisitions and divestments. In 2021, for example, the Board used the results of Vermilion’s climate-related scenario analysis to inform its guidance and approval of our emission reduction targets.
The President and CEO has responsibility for sustainability, including climate-related risks. Our Vice President, Sustainability reports to the President, and is responsible for developing sustainability strategy and reporting, including identifying, assessing and overseeing management of sustainability- and climate-related issues, working in partnership with corporate teams and business units to ensure the Company’s approach reflects the goals within our long-range business plan.
The Vice President, Sustainability also provides updates to and receives guidance from the Board and/or the Sustainability Committee at least quarterly, and the Executive Committee monthly, on strategy, issues, performance and reporting.
Our Vice President, North America and our Vice President, International and HSE lead the operationalization of sustainability, with business unit leaders responsible for strategy and activities, including managing climate-related risks and opportunities, with the support of sustainability leads in each business unit. The sustainability leads, along with the corporate sustainability team, meet as needed to discuss related issues, trends and learnings. In addition, various departments within the Company report sustainability- and climate-related priorities and progress as frequently as weekly to management, and quarterly to the full Board or Board committees, on issues such as governance and ethics, HSE targets and performance, risk management, regulatory changes, and public and government relations.
The Sustainability Committee
The Sustainability Committee provides oversight for the long-range sustainability strategy, its implementation, progress including key performance indicators, and methods of communicating sustainability policies and performance.
Corporate Sustainability Team
The corporate sustainability team provides a centre of excellence approach, advising the business on all aspects of sustainability, including environmental, climate and social issues, based on extensive research and inputs from the business. The team is also responsible for external sustainability reporting, based on data from our HSE, People and financial information systems.
