Climate Change and Energy
According to the United Nations Intergovernmental Panel on Climate Change, the earth's climate is warming, as evidenced by increases in global average air and ocean temperatures, widespread melting of snow and ice, rising sea levels, and an increase in extreme weather events.
It is widely believed that global warming is the result of an increase in man-made greenhouse gas (GHG) emissions. Greenhouse gases – some naturally occurring and others resulting from human activity – contribute to climate change by trapping heat within the lower layers of the earth's atmosphere. Carbon dioxide (CO2) is a greenhouse gas that occurs naturally but is also produced from the combustion of fossil fuels such as oil, coal and natural gas.
Growing public concern about GHG emissions and their effect on the world’s climate is leading more customers to ask for information on Resolute’s GHG emissions. Actions to reduce GHG emissions and combat climate change are a key element of Resolute's sustainability agenda.
This increasing demand for low-carbon products and processes – and the overall requirement to consider the realities of climate change – have influenced our long-term business strategy. Resolute’s reputation, environmental and legal responsibilities, regulatory obligations, financial reporting, continued operations, and supply chains are all significantly impacted by these factors.
Resolute’s commitment to green energy benefits both the environment and our bottom line, considering, for example, that energy accounts for approximately 22% of the company’s paper production costs. Our focus on improving energy efficiency and replacing high-emission fuels like coal with less-carbon-intensive fuels places Resolute ahead of potential regulations, positioning the company as a leader in GHG reductions and in the development of new, sustainable products that have a lower carbon footprint. Our efforts also positively impact Resolute’s market positioning and value creation for its shareholders.
Managing our Carbon Footprint
When Resolute joined the elite World Wildlife Fund® (WWF®) Climate Savers program in November 2011, we made commitments that were among the most ambitious in our global industry to reduce our GHG emissions, among other specific environmental performance goals. We committed to reducing absolute GHG emissions (scope 1 and 2) to 65% of 2000 levels by 2015.1 At the end of 2015, our reduction had reached an impressive 70%, and Resolute's participation in the program was completed with the expiration of the five-year term of the agreement.
At the end of 2019, we had lowered GHG emissions by 82%, and we began the process of setting a new target – a longer term objective through 2030 to align with the Forest Products Association of Canada (FPAC) “30 by 30” Climate Change Challenge.2
For our climate change disclosures, CDP awarded the company a “B”, placing us at the management level for this category in 2019. This score indicates that we have taken steps to assess environmental risk to our business and implemented actions to manage those risks.
Work undertaken in 2019 to mitigate climate change includes:
- Modernization of the cogeneration turbine at our Coosa Pines (Alabama) pulp mill that has now resulted in a 65% reduction in purchased electricity (scope 2), or approximately 100,000 metric tons of CO2 equivalents per year.
- Increase in operational stability and improvements to the power boiler at our Saint-Félicien (Quebec) pulp mill for a reduction of 10,700 metric tons of CO2 equivalents per year.
- Optimization of electrical power boilers at our Alma and Kénogami (Quebec) paper mills for an absolute direct (scope 1) emissions reduction of 6,000 metric tons of CO2 equivalents per year.
In addition, the following investments were announced in 2018:
- C$29 million project at the Thunder Bay pulp and paper mill, including $14.7 million to reduce the mill’s overall annual GHG emissions by over 20%, or approximately 43,000 metric tons of CO2 equivalents per year.
- C$61 million strategic investment plan at our Saint-Félicien (Quebec) pulp mill, including $21.5 million to reduce GHG emissions by 20%, or approximately 35,000 metric tons of CO2 equivalents per year. A patented technology to capture carbon from the mill for the adjacent Toundra Greenhouse reduces GHG emissions by an additional 10,000 metric tons per year.
Resolute's executive team is responsible for overall business strategy, which is approved by our board of directors, of which the president and CEO is a member. Climate change issues are discussed and reviewed on a regular basis at the corporate level as all capital projects being considered by the company require an evaluation of their impact on GHG emissions.
In addition, our corporate Carbon Committee serves as a training and information mechanism for climate change issues. All risks and opportunities related to our carbon strategy are reviewed by the committee, which is a cross-functional group of vice presidents and representatives (Operations, Legal, Treasury, Finance) that is chaired by the vice president, Environment, Energy and Innovation. Company results are reported to our senior managers and the executive team which, in turn, reports to our board's Environmental, Health and Safety Committee, as well as the full board of directors.
Overall responsibility for risks and opportunities at the mill level resides with our vice president, Environment, Energy and Innovation, while our vice president, Forestry, has responsibility for risks and opportunities at the forestry level. A top-down approach is in place for the analysis of risks and opportunities, which relate primarily to regulatory changes, strategic capital investments, consumer preference changes, reputation and weather-related challenges.
At the operations level, mill managers are responsible for implementing site-specific climate- and energy-related projects. All pulp and paper mills are supported by an energy champion responsible for the continuous improvement of our operational performance in terms of energy consumption. Facilities also have an environment coordinator who ensures that our facilities comply fully with environmental regulations such as those related to greenhouse gas emissions.
A thorough emission inventory is essential for identifying opportunities to reduce our carbon footprint. We have been working intensively to close minor gaps in scope 1 and 2 emissions identified in our inventory. This includes tracking sawmill emissions and the allocation of emissions from our cogeneration facilities, according to contractual agreements, as well as including emissions from our landfill sites. Data collection for each mill is aggregated by Resolute’s Environment group and overseen by the vice president, Environment, Energy and Innovation. Linked spreadsheets track data, and verification procedures are in place to ensure that our inventory is accurate.
Visit the Carbon Footprint page for more information on how Resolute’s energy efficiency initiatives and investments in clean energy help to control power costs and reduce GHG emissions.
1 Resolute reports on emissions classified as scope 1 (direct emissions coming from on-site fuel combustion) and scope 2 (indirect emissions from purchased electricity and steam).
2 Early in 2017, some minor adjustments were made to our inventory to improve the accuracy of the greenhouse gas emissions reported. These adjustments did not materially affect the numbers reported.