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With over 1,300 Shell stations in Canada, filling up under that bright red and yellow sign is a weekly ritual for many Canadians. It’s also one of the activities that generates the most carbon emissions—a quarter of Canada’s carbon footprint is attributed to transportation. Consumers know this and they’re continuing to demand new solutions to reduce their emissions. As GM of Shell’s retail fuels division in Canada, Andrea Brecka leads the company’s efforts to put the customer first. We caught up with her to learn more about how Shell is investing in innovation to transform what it means to “fill ‘er up”.
You have joined the Canadian government, 100 other countries and many of the world’s largest corporations in committing to net-zero emissions by 2050. To achieve this target on a global scale, the latest International Energy Agency report recommends no new oil and gas developments. What does a net-zero future mean for Shell?
Climate change is a very urgent challenge and tackling it requires a fundamental transformation of the global economy, including the energy system. That’s why Shell has stepped forward to set a net-zero-by-2050 target in lockstep with society’s progress and the Paris Agreement.
How will we do that? We’ve identified six levers to help Shell and our customers decarbonize:
In terms of the IEA conclusions, they’re based on scenarios and, therefore the demand and supply modeling varies. Shell’s oil production peaked in 2019. Further, we don’t foresee any frontier explorations beyond 2025. All to say, this net-zero commitment is critical for Shell.
I understand Shell Canada has taken steps to reduce Scope 3 emissions. Could you share more about this strategy and why it’s important?
Absolutely. I think it’s fundamentally important that everybody understands what we mean by Scope 1, 2, and 3. We define Scope 1 and 2 as the emissions generated from the extraction and production of the energy products we sell. Scope 3 emissions are generated by the end use of these products. Many people are surprised that more than 90% of Shell’s emissions are Scope 3. The other element that people may not know is that Shell sells many products from other companies, including energy products. In fact, we sell more than three times the energy we produce ourselves. This is why it’s significant that Shell has chosen a commitment to reduce Scope 3 emissions.
I’ll share an example of how we’re helping our customers reduce emissions. Last year, we were the very first fuels retailer in Canada to launch a Drive Carbon Neutral program for our customers to help offset emissions from fuel purchases. Most recently, we’ve announced that carbon-neutral lubricants will be available to customers in key markets, including Canada. This program will offset approximately 700,000 tonnes of CO2 emissions per year.
Tell us more about your new carbon-neutral driving offer.
For a number of years, many customers have been telling us they’re interested in reducing their carbon footprint, but an electric vehicle (EV) is not an option at this time. The Drive Carbon Neutral program helps them have an impact even if they don’t own an EV. It’s very simple to participate: from now until Sept. 7, when customers opt in via the Shell EasyPay app, Shell will offset the emissions from their fuel purchase. It’s a great experience and I highly encourage all our customers to participate.
Alternatively, customers can come inside the store at participating locations and pay 2 cents per litre to offset their emissions. What happens after that? Shell purchases independently verified carbon credits that are generated from either Canadian or international projects designed to protect or restore the natural landscape.
I’m happy to say that, since the launch of this program, we have offset approximately 15 million litres of fuel. The customer feedback is overwhelmingly positive. We’re continuing to evolve the offer and there will be more to come later this year. Stay tuned!
Consumer demand for alternative fuels is growing. How is Shell supporting innovation to meet that demand?
As I referenced earlier, it’s important to be in lockstep with customer demands. In Canada, I’m proud to say that we’ve not only embraced, but I feel like we embody the energy transition. In the last five years, we have transitioned our business from heavy oil to natural gas, we’ve implemented carbon capture and storage here in Alberta, and we continue to do more and more with respect to lower-carbon fuels and renewables. We’re also making a much wider range of lower-carbon products available, such as biofuels and hydrogen, while also increasing the number of charge points for battery electric vehicles.
To give a hydrogen example, Shell has partnered with a hydrogen technology and energy company called HTEC to build two hydrogen refueling stations in the greater Vancouver area. On the biofuels side, there are a couple of innovation examples. We have a 40% interest in the $875 million commercial-scale Varennes carbon recycling plant—the first ever waste-to-low-carbon-fuels plant in Quebec. Secondly, Shell Ventures has made an equity investment in Forge Hydrocarbons Corporation to build a first-of-its-kind $30 million commercial-scale biofuel production plant in Ontario. We’ve also acquired Greenlots, an EV solutions provider, and we will be building EV charging stations across Canada and in the U.S. These are just a few examples of investments Shell has made to advance innovation and accelerate progress.
It’s 2030. I pull into a Shell station. What does it look like?
I think the future retail station will have a mosaic of solutions. Certainly, when you think about the kinds of fueling offers, EV, hydrogen, and biofuels will be standard. We will build future retail stations to be carbon neutral, perhaps taking advantage of solar panels or geothermal power. Lastly, I think about our customers. We have a vision to provide an oasis within the store. In 2030, we’ll have great lounge areas with wifi for people to connect or catch up on some work. In addition to the foods and beverages we have now, we’ll also offer healthier solutions for our customers. We think of our retail stations as not just fueling vehicles, but fueling bodies and minds.
How is Shell addressing calls for a just transition? And as a former president of Shell Canada’s Women’s Network, what role do you see for diversity and inclusion as we transition to a clean economy?
I’m proud to say that when Shell looks at projects like LNG in new areas, we work hard to get to know the communities. That means understanding the community’s wants, meeting its workforce, and addressing local partnerships in a way that’s fair, just, and inclusive.
In my work in the retail business last year, we launched the Fuel Service app. For most of us, fueling your car is a seamless experience, but for some individuals with disabilities, it can be daunting. To address that challenge, we partnered with Fuel Service. Now, individuals have the ability to call ahead and see if a retail station is able to assist them in their fueling.
I’ve worked with Shell for almost three decades. One of the reasons I’ve been here as long as I have is because Shell believes in and takes action on diversity, inclusion, and equity. Even in the last year, Shell is going through a major reorganization and we’ve made a very intentional effort to ensure our leadership team is diverse. This has been wonderful. Everybody wants role models to look up to. Diversity means better quality decisions and better business outcomes.
If you could invite three people, either alive today or no longer with us, to a conversation about the future of energy in Canada, who would they be?
I love this question. I thought long and hard about it. One would be Brian Mulroney. I saw him speak at a Pollution Probe gala last year and in his speech, he said “Successful leaders do not impose unpopular ideas on the public. They make unpopular ideas acceptable to the nation, and that takes courage.” When I think about his legacy of really tackling tough environmental challenges and what he’s been able to accomplish, it’s very inspiring. I would love to ask him how he managed the many challenges and different stakeholders to ultimately make progress.
I also thought about Generation Z and my two young adult daughters. When I think about that generation and what’s important to them, I would love to start a conversation about what they think about companies like Shell. How do they see us playing a role in tackling climate change? I’d love to just listen to their perspectives and have a debate.
Lastly, Elon Musk is a pioneer and a visionary. He’s courageous, bold, and willing to fail fast to make progress. Wow. For a company like Shell that’s undertaking transformational changes, learning from someone who is willing to take a risk to commercialize ideas would be fascinating.
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“We must work towards a climate transition that puts people at its centre and leaves no one behind,” Vancity proclaims as part of its commitment to net-zero by 2040. After a year when our environment and social safety nets were tested like never before, this approach seems very timely. Jonathan Fowlie, Chief External Relations Officer, Vancity Credit Union, joined No One Left Behind: How We Build a Just Transition to the Net-Zero Economy at GLOBE Capital to discuss the role of financial institutions in supporting a just transition. We caught up with Mr. Fowlie to learn more about how Vancity has integrated an equity lens into its climate commitments.
Tell us more about Vancity’s net-zero commitments.
We’ve recently released five commitments on climate action and climate justice that take a holistic approach to how we as a financial institution can respond to the climate emergency. It starts with decarbonization and getting our lending portfolio to net-zero. We’re also working to enable responsible investments that create a clean and fair future. This past year has exemplified how a global event can widen the systemic gaps in our economy. The climate emergency is having and could have a similar impact. We’re applying this systemic view to climate change to anticipate community and economic impacts.
Earlier this year, Vancity became the first financial institution in Canada to make a commitment to net-zero emissions by 2040 across your full lending portfolio. To ensure success, you’ve gone one step further by also committing to regular targets on the road to 2040—the first of which will be in 2025. How will you set that 2025 target?
In its most basic form, Vancity was carbon neutral across our operations in 2008. We know we can have a much greater impact on reducing emissions by extending this commitment to what we finance, i.e. the loans we give people to buy homes or start businesses. Our 2025 target will aim to reduce these finance-related emissions.
The first step is understanding the carbon footprint of our loans. If you have a Vancity mortgage on your house, what are your emissions and how do we record that? Our most recent annual report discloses the emissions that we estimate to be associated with our loans. The next step, which we’re undertaking right now, is a rigorous science-based process to understand Vancity’s pathway to net zero with that inclusive lens in mind. Once we identify that pathway, we’ll engage government to ensure we’re aligning with current regulations. Then, we’ll be ready to publicly commit to targets that are aggressive, achievable, and science-based.
What actions is Vancity taking to incorporate equity into its climate work and why do you think it’s important that we include equity in climate finance conversations?
Getting to net zero is important. How we get there is essential. As I mentioned earlier, the pandemic has shown us the impact a global event can have on marginalized communities. We also saw how a financial institution like Vancity can immediately meet those needs. We have a history of financial inclusion—of trying to serve the underserved. That approach has become all the more relevant during the pandemic.
For example, on Vancouver’s Downtown Eastside, health restrictions have interrupted a lot of the services that residents rely on. In the first months of the pandemic, various levels of government introduced new and increased benefits to support the safety and well-being of vulnerable and hard-hit individuals. As a financial institution, our role is to form a bridge between the resources being made available and the people who need to access them.
Our Pigeon Park Savings branch was the only financial institution in the Downtown Eastside that stayed open during the height of the pandemic. We see this as an illustration of financial inclusion and how it can ensure systemic gaps aren’t widened in extreme situations.
We’re taking the same approach to the climate emergency with a view to ensuring the transition to a clean economy will be equitable and just. That means talking a little bit less about decarbonization and climate and more about understanding existing inequities and of course, including marginalized communities in that conversation.
When it comes to the just transition, what do you think is the biggest opportunity and the biggest challenge?
The biggest challenge is ensuring the transition is just. What do I mean by that? We’re at a place where we look ahead to the effects of climate change and we’re still not entirely clear on the questions we need to ask, the things we need to measure, and the actions we need to take. Some are apparent, but some, as we saw during the pandemic, emerge as secondary and tertiary issues. How do we ensure we can adjust and be flexible?
Conversely, the biggest opportunity is to re-imagine our economy. How can we shift, innovate, create leaders, and form the jobs of tomorrow? We’ll need to consider the skillsets of people across our economy. Part of that is considering the workforce that will need to transition from a job that might not exist 10 years from now into a job that is driving innovation. It’s also about creating opportunities that make our economy more equitable and inclusive.
When you ask people: do you think there needs to be a fundamental change towards an economy that is cleaner and fairer? Unanimously, you get a yes. It’s not at all clear exactly what that future looks like, but that consensus creates an opportunity to chart a new path.
How can financial institutions take a leadership role in the just transition?
Financial institutions like credit unions and banks make crucial decisions every day about where money goes, what gets funded, and who benefits. So, we have a crucial role to play in determining the future economy and frankly the future of our planet. Accordingly, there are a number of questions that all financial institutions should be asking: Are we just offsetting climate impacts? Are we working to avoid them in the first place? How are we measuring the changes to our balance sheet in a rigorous way that ensures transparency? Finally, how do we ensure that the actions we are taking are leading towards an economy that is both clean and fair? I strongly believe that we have an obligation to understand the impacts of our decisions on where to allocate capital, because those who have the least to do with causing climate change in the first place are those who will be impacted the most and who will have the least available resources to adapt. We have a unique opportunity right now to learn from the past and explore what it means to truly build back better.
If you could ask the GLOBE Capital community to take one action, what would it be?
I’d ask the GLOBE Capital community to bring an equity lens to every action they take on climate. For example, when you’re looking at climate risk across a portfolio of buildings, consider the demographics of the locations and local people’s ability to adapt. Considering equity means asking: are there choices that we can make today to ensure we’re not only protecting our investments against climate risk, but we’re also fostering equity and resilience? It goes back to the premise that yes, we need to decarbonize. We could do that overnight by just stopping funding a variety of activities, but that’s neither practical nor will it lead to an equitable economy and society. So, we need to ensure we’re inviting everyone into the conversation and framing that conversation in a way where everyone, particularly marginalized communities, can see themselves reflected.