Now more than ever Canadian energy companies must create strategic and integrated CSR programs to survive: PwC

    Those able to foresee, understand and adapt their business to deal with
    long term change will emerge as leaders

    TORONTO, Aug. 19 /CNW/ - Despite reports that more and more energy
companies believe it is critical to integrate financial, social and
environmental programs, under the umbrella of corporate social responsibility
(CSR), to ensure future growth, a recent survey conducted by
PricewaterhouseCoopers (PwC) and JuneWarren-Nickle's Energy Group found just
the opposite.

    -  Only 12% of survey respondents believe the strength of CSR programs is
       critical to sustain their future growth and 28% feel that it is not
       important at all, according to Natural selection: evolution of
       sustainable companies, a 2009 Canadian Energy Survey Q1 Update.

    -  Attracting and retaining key talent was viewed by 68% survey
       respondents as critical for sustaining growth; access to capital and
       credit was picked by 67% of respondents as critical for long-term
       growth (multiple answers allowed).

    -  26% of respondents said scarcity of natural resources will have a
       significant impact on their businesses in the next three years.

    "During the economic downturn, improving financial and operational
performance clearly trumps CSR initiatives," says Christine Schuh, Associate
Partner and Leader of PwC's Climate Change Services group in Canada. "However,
climate change is the single largest issue within the broader topic of
sustainability. With increasing demand for water and other natural resources,
operations will invariably be affected. It is now more important than ever
that energy companies develop strategic and integrated CSR programs, and
increase fact-based communication with all stakeholders, including local
communities, to achieve sustainable growth."

    Corporate social responsibility

    While CSR does not have a universal definition, many describe it as the
integration of economic, social and environmental policies within business
operations. The interests of all stakeholders - including investors,
customers, employees and the community - are reflected in a company's values
and actions.
    The 2009 Canadian Energy Survey Q1 Update looks in more detail at issues
affecting companies' ability to sustain their operations in the broadest
sense. From harder-to-access natural resources to increasing costs for their
development to a growing legion of influencing stakeholders, Canada's oil and
gas companies face several significant challenges.

    Availability of natural resources

    In our survey, 26% of respondents said scarcity of natural resources will
have a significant impact on their businesses in the next three years.

    -  Canadian oil production (including oilsands) was down two per cent to
       3.24 million barrels per day in 2008 from 3.32 million barrels a day
       the prior year, while annual gas output fell 5.1% to 175.2 billion
       cubic metres from 184.1 billion cubic metres in 2007, according to
       BP's Statistical Review of World Energy 2009.

    -  At the same time the International Energy Agency (IEA) predicts crude
       oil consumption will rise 1.4 million barrels per day in 2010,
       reversing about half of the demand lost in 2008 (0.3 million barrels a
       day) and 2009 (2.4 million barrels a day), but still leaving
       consumption far below the 2007 peak (86.5 million barrels a day).

    -  On the supply side, the IEA says production from existing fields
       around the world is falling at seven per cent a year. Producers need
       to bring on almost six million barrels a day of new capacity each year
       just to ensure output remains stable.

    As conventional petroleum reserves are depleted around the world, new
production is coming from smaller fields in difficult geological settings or
expensive wells in the deepwater offshore.
    "Producers have also turned to the world's unconventional oil and gas
resources - including extra heavy bitumen in Canada, tight gas and shale gas -
that require increasing technological proficiency," says Stephen Marsters,
Editorial Director at JuneWarren-Nickle's Energy Group. "These plays are
capital and energy intensive."

    Costs to access natural resources

    Nearly the majority of survey respondents, 49%, said they believe their
operating costs will decrease somewhat over the next year, with eight per cent
saying they expect costs to decrease substantially. In addition, 14% of
respondents said costs will remain the same over the next 12 months, while 26%
believe prices will increase somewhat.
    Costs and expenditures associated with accessing oil and gas in Canada's
petroleum sector have risen this decade. While the recession has put a
temporary brake to that trend, national and global demand for these resources
will continue to increase and impact oil and gas operations.
    Most respondents (35%) also believe their land acquisition costs will
decrease somewhat over the next year, although 27% expect costs to stay the
same and 22% said prices will increase somewhat. About 40% of survey
respondents believe energy input costs will have a significant impact on their
operations within the next three years.
    The adoption of new technologies will help mitigate operating costs for
conventional and unconventional producers. What is unknown, however, are the
long-term costs attached to cutting greenhouse gas emissions or a
cap-and-trade system. When asked when producers anticipated deploying new
technologies in response to the issue of climate change, 30% did not
anticipate making any changes in the next year. Fifty per cent expected to
deploy new technologies within the next 24 months.

    Role of stakeholders

    John Williamson, Partner and Leader of PwC Canada's Energy Group adds,
"The industry should be prepared to see changes from the Canadian government
on how natural resources are managed going forward. Companies that are able to
foresee, understand and adapt to these trends will be better equipped to
sustain their operations over the long term."
    Most respondents feel shareholders and investors, along with domestic
governments and regulators have the most influence on decisions made at their
    About 40% of survey respondents said domestic governments/regulators play
a very influential role on decisions made in their companies, with 53%
characterizing their role as somewhat influential. Close to 30% of respondents
also believe regulatory compliance will have a significant impact on their
business within the next three years.
    Survey results also indicated that stakeholder engagement has not been
woven into the fabric of CSR programs at most energy companies. When
respondents were asked to select from a list of 15 strategic areas their
company will focus on in the next three years, public education and engagement
was ranked lowest (asset management and optimization ranked No.1, followed by
operational performance).
    In addition, many other stakeholders - non-governmental organizations,
media, foreign governments and local communities - have a much lower level of
influence on decisions made by the sector, survey results indicated.

      -  About 31% of respondents said local communities, including
         aboriginal groups, have no influence on decisions made within their
         organizations, while 73% said NGOs have no influence.

      -  Employees were deemed somewhat influential by 58% of respondents,
         with an almost equal percentage saying employees are either very
         influential or have no influence on the decision-making process.

      -  Community members often compete with energy companies for the same
         natural resources (land and water), yet only 15% of survey
         respondents said local communities had a very influential role on
         decisions made in their companies.

    Methodology and Demographics

    This report contains results from an online survey, conducted by
PricewaterhouseCoopers and JuneWarren-Nickle's Energy Group during the 22-day
period from May 25 to June 15, 2009, to better understand issues currently
impacting industry. Close to 85% of the 140 respondents fill senior roles
within the energy sector (49% in a leadership role; 35% in a managerial role),
with the balance comprising employees and consultants.
    The majority of respondents work for exploration and production (E&P)
companies that produce a mix of natural gas and crude oil. Just over 50% of
respondents reported their company's annual revenues at more than US$500
million, with about 17% listing revenues at US$100 million to US$500 million
per year, and close to 16% said annual revenues were US$10 million to US$100
million. About 15% of respondents said revenues were US$5 million or less per
    For more information, please visit

    About PricewaterhouseCoopers LLP

    PricewaterhouseCoopers ( provides industry-focused assurance,
tax and advisory services to build public trust and enhance value for its
clients and their stakeholders. More than 155,000 people in 153 countries
across our network share their thinking, experience and solutions to develop
fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP
( and its related entities have more than 5,200 partners and
staff in offices across the country.
    "PricewaterhouseCoopers" refers to PricewaterhouseCoopers LLP, an Ontario
limited liability partnership, or, as the context requires, the
PricewaterhouseCoopers global network or other member firms of the network,
each of which is a separate and independent legal entity.

For further information:

For further information: Kiran Chauhan, (416) 947-8983,; Carolyn Forest, (416) 814-5730,

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890