Case study: How Vermilion creates economic value for its stakeholders
Founded in 1994, Vermilion is a publicly traded, widely held, international energy producer headquartered in Calgary, Canada. Vermilion seeks to responsibly produce essential energy while delivering long-term value to its people, shareholders, customers, partners and communities. Tweet This!
This case study is based on the 2023 Sustainability Report by Vermilion, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Creating value for all its stakeholders through the acquisition, exploration, development and optimization of energy producing properties in North America, Europe and Australia is a top priority for Vermilion. In order to create economic value for its stakeholders Vermilion took action to:
- create economic value for employees
- create economic value for governments
- create economic value for communities
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With this case study you will see:
- Which are the most important impacts (material issues) Vermilion has identified;
- How Vermilion proceeded with stakeholder engagement, and
- What actions were taken by Vermilion to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2023 Sustainability Report Vermilion identified a range of material issues, such as energy transition, regulatory issues, personal safety, emissions reduction, ethical behaviour. Among these, creating economic value for its stakeholders stands out as a key material issue for Vermilion.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Vermilion engages with:
To identify and prioritise material topics Vermilion engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Current and Potential Investors
| · Annual General Meeting and webcast, distribution of annual report & proxy statement · Annual benchmarking against peers through Globe and Mail Board Games · Business updates, analyst conference calls · Ongoing presentations to investor and industry conferences, with webcasts posted on external Vermilion website and intranet · Ongoing monitoring of and response to investor relations e-mail and phone inquiries · Ongoing monitoring of and response to social media including · Media monitoring/ media appearances · News releases · Engagement on sustainability-related queries from ESG investment agencies, potential investors and current shareholders · Feedback for TCFD and SASB/ISSB proposed changes, directly and via industry groups |
| Partners and Suppliers
| · HSE Pre-qualification screening and auditing of operations to ensure compliance · Safety meetings, including both Vermilion staff and Vermilion’s contractors and partners · Contractor briefings from Vermilion staff on expected standards of behaviour, including Vermilion’s Code of Business Conduct and its Anti-Discrimination and Harassment Policy · Meetings, etc. to review requirements and negotiate contracts, as needed · Daily operations, including inspections and field audits · Meetings, phone calls, e-mails as issues or concerns arise |
| Employees
| · Individual · Great Place to Work® programme confidential staff survey, communication of results to staff through e-mails and meetings, ongoing engagement of staff in feedback and improvement action planning meetings from department to team levels · Global town halls, with executive question-and-answer sessions based on questions submitted anonymously in advance, or during the meeting · Additional confidential staff surveys on topics such as HSE (Perception Survey), compensation and strategic community investment (choices of non-profit partners, activities, etc.) · Additional town halls in each of Vermilion’s business units with leadership question-and-answer sessions · Extensive annual lunch and learn programme with company, industry and wellness topics · Whistleblower policy, 24/7 (referred to internally as “Reporting of Inappropriate Activity”) · Company-wide working groups established to refresh Vermilion’s strategic plan |
| Communities
| · HSE Pre-qualification screening and auditing of operations to ensure compliance · Safety meetings, including both Vermilion staff and Vermilion’s contractors and partners · Briefings from Vermilion staff on expected standards of behaviour, including Vermilion’s Code of Business Conduct and its Anti-Discrimination and Harassment Policy · Meetings, etc. to review requirements and negotiate contracts, as needed · Daily operations, including inspections and field audits · Meetings, phone calls, e-mails as issues or concerns arise |
| Governments and Regulators
| · Regulatory requirements in all of Vermilion’s locations · Meetings, phone calls, conferences with government officials · Government-Industry working groups |
| NGOs: Industry, Environment, Social
| · Ongoing participation in industry meetings and conferences · High-level review of NGO positions and topics · Meetings with NGO representatives |
What actions were taken by Vermilion to create economic value for its stakeholders?
In its 2023 Sustainability Report Vermilion reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2022, Vermilion paid $ 193,707 million for employee wages and benefits.
- Creating economic value for governments
- In 2022, Vermilion paid $ 449,330 million in taxes.
- Creating economic value for communities
- In 2022, Vermilion spent $ 2,046 million in community investments.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Vermilion, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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