The Potential impact of ESG spending on public perception of the Canadian oil sands

• Main Authors: Thibeault, Al, Taylor, Ivan W., Koul, Saroj, Falebita, O. A., Coppus, George
• Other Authors: Qudrat-Ullah, Hassan
• Format: Book Part
• Language: English
• Published: Springer 2023
• Subjects: Computer Science; Engineering and Technology; Canada; First Nations
• Online Access: https://pure.jgu.edu.in/id/eprint/6921/; https://pure.jgu.edu.in/id/eprint/6921/1/al-thibeault-the-potential-impact-of-esg-spending-on.pdf; https://doi.org/10.1007/978-3-031-40635-5_15

The “Oil Sands in Alberta”, Canada, are facing transformational change due to national and global pressure for greenhouse gas abatement. For Oil Sands (“the industry”) to survive, it must achieve a ‘new normal’, where the business of supplying energy is conducted within a framework of increased regulation of its environmental, social, and regulatory governance (ESG) framework. For the ‘new normal’, post-transition state to become a stable basis for business operations, the perception of the industry must be neutral at a minimum and ideally positive. The quantitative metrics of perception reflect the many complex dimensions of ESG: the current levels of CO2 emissions, performance toward Net Zero, and regulatory compliance. Since the approach that a single perception metric is not possible, we propose four metrics that collectively have the greatest influence on Oil Sand’s industry decisions regarding ESG investments and spending—First Nations, the Environmental Lobby, Investors, and the General Public. The factors driving each perception metric are both exogenous and endogenous and linked, creating behaviours amenable for study using system dynamics. This study comprehends the potential of reinvesting profits from Oils Sands into Environmental, Social, and Governance (ESG) to improve its public perception with the effort to lead to net-zero emissions and the industry’s survival. First, a System Dynamics (SD) model to portray oil production using mining and in-situ drilling features is built. Next, the calibrated model analyzes the emissions produced in the process, the use of land and water, and the impact on wildlife and fish in the surrounding area. Finally, these effects are simulated for the well-being of First Nations people in Northern Alberta by showcasing the potential of investment in emissions abatement technology and through social services and infrastructure to determine if this investment might influence environmentalists’ and First Nations’ perceptions. As a result, for economic aspects, the model ...