Our Targets & Metrics

Sustainability- and Climate-Related Risks and Opportunities

Our reporting describes significant economic, environmental, social and governance measures, which are reported with reference to SASB/ISSB and GRI. These include but are not limited to:

These metrics contribute to a sustainability contribution of 10% of the Corporate Performance Scorecard for our Long-term Incentive Plan, comprised of progress towards our 2025 emission intensity reduction target and 2027 ARO liability reduction target, along with select ESG rating agency scores.

HSE metrics also comprise 10% of the scorecard for our Short-Term Incentive Plan. These are industry-typical leading and lagging indicators reflective of responsible, safe and sustainable operations:

These plans apply to all employees, including our executive team. Thus, sustainability- and climate-related performance is linked not only to executive but to all employee compensation. We report on this externally through our Information Circular each year.

We also track carbon pricing, and have identified actual and likely pricing scenarios for all of our operations based on current government policies and published research relating to the Paris Agreement. For example, in Canada, the 2022 carbon tax was $50 per tCO2e, and in Ireland, carbon pricing was 81 € per tCO2e.

We also gain an external perspective on our performance via third-party ESG rating agencies, including:

Scope 1, 2 and 3 GHG Emissions Disclosure

We report Scopes 1, 2 and 3 emissions, which are externally verified under ISO 14064-3. Historical, corporate and business unit data can be found in our Performance Metrics section.

Targets and Performance

Vermilion has two emission-related targets:

We developed, and the Board approved, these targets following our climate scenario analysis and extensive internal assessment. There are significant inherent uncertainties in how the energy transition will accelerate over the next three decades. Our intention is to manage these by focusing on responsible production of essential oil and natural gas for as long as these forms of energy are needed, while developing opportunities in other areas that are an economic and synergistic fit for our business.

Committing to an aspirational net zero target was important, but setting a company-wide nearer term target as the first step in creating a clear pathway was even more so. We looked at our own operations – from how we manage emissions data to options for emission reduction – and at how our peers and the majors are approaching this. From, this, we identified emissions intensities and opportunities for reduction within our business units, and set our second target.

This is being achieved, starting with our business units with higher emissions intensities, with an initial focus on efficiency, including process changes, venting reductions, instrumentation upgrades from gas to air and power efficiency options, along with improved metering and field measurements.

All of these factors are now being considered as we work on our net zero transition plan through 2023. Based on our scenario analyses, we have identified four key pillars to support both a Net Zero by 2050 target for Scope 1 and 2 emissions, and the establishment of our mid-term 2030 Scope and 2 emission intensity reduction target:

Technology use is already driving significant operational efficiencies.

We anticipate that our plan will be complete in 2024, and that it will constitute a living document - one that will be updated as economic, technological and regulatory landscapes evolve.

Vermilion has two emission-related targets:
Progress (see Energy and Emissions Reduction page for details)
Scope 1 – flaring and venting
Set in 2014: Reduce flaring emissions at our light-oil assets in southeast Saskatchewan acquired in 2014 by 50% by 2020
Achieved above target: 88% reduction in annual emissions as of end 2020
Scope 1 – methane
Set in 2014: Methane reduction target included in the target above to reduce flaring emissions at our light-oil assets in southeast Saskatchewan acquired in 2014 by 50% by 2020
Achieved above target: 86% reduction in annual methane emissions as of end 2020
Scope 1 – flaring and venting
Set in 2014: Reduce flaring emissions at one of our major facilities in France by 65% by 2015
Achieved: 65% reduction in emissions (avoiding the flaring of 14,500 tCO2e annually) by implementing a gas export system
Scope 2 – renewable energy
Set in 2015: Exceed 5% of our total power consumption coming from renewable sources (replacing traditionally generated electricity) by 2017
Achieved above target: Reduced Scope 2 emissions in Netherlands from 41% of our 2015 gross Scope 2 emissions to 2% in 2016 and 0% in 2017. This program has been extended through 2023, and has now been adopted in our Ireland and Germany business units.
Renewable Heat Energy Target
Set in 2015: Generate 31,380MWh of renewable geothermal energy annually in our France Business Unit from our Parentis battery’s tomato greenhouse project until at least 2035
Above Target: 2022 production was 59,144 MWh of geothermal energy from four sites
Scope 1- flaring and venting
Set in 2018: reduce the flaring and venting emissions, including methane, associated with the Spartan assets acquired in 2018 by 50% by 2024
Target exceeded in 2021 and assets partially divested in 2023.
Scope 1 – methane
Set in 2018: Similar to our 2014 acquisition of Elkhorn, this is a proportional target associated with our program to reduce methane emissions for our 2018 acquisition of Spartan by 50% by 2024.
Target exceeded in 2021 and assets partially divested in 2023.
Scope 1 GHG emissions
Set in 2021: Reduce Scope 1 intensity by 15-20% from our 2019 baseline year by 2025.
On track: 10% reduction achieved in 2022

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