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.
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 most notably 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 one quarter 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 2020, we had lowered GHG emissions by 85.3%, two-thirds of which reflect reductions in emission intensity. We previously reported a reduction of 83.4%, which we have since adjusted according to updated emission factors from our electricity suppliers.
In March 2021, we announced a commitment to reduce absolute GHG emissions (scope 1 and 2) by 30% against 2015 levels by 2025. By achieving its target, the company will have reduced its emissions by nearly 700,000 metric tons of CO2 equivalents per year compared to its 2015 level.
The company also announced commitments to:
- include the previously excluded wood products facilities’ GHG emissions in its GHG inventory by 2022;
- continue to report climate change data and management practices to CDP’s climate change program, including scope 1, 2 and 3 emissions; and
- further integrate sustainability practices in its supply chain by working with suppliers and related stakeholders to develop scope 3 GHG emission reduction commitments.
In CDP’s 2020 climate change program, Resolute scored a “B-”, placing us at the management level. CDP places companies at the management level in recognition of their actions to reduce GHG emissions. The score also indicates we have taken steps to assess environmental risk to our business and implemented actions to manage those risks. Resolute has reported our carbon footprint to CDP since 2006, beginning with scope 1 and 2 GHG emissions, and adding scope 3 (supply chain) emissions in 2015.
Projects launched since 2015 to mitigate climate change include:
- 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.
- Increase in the control of combustion of the boiler at our Baie-Comeau (Quebec) newsprint mill for a 50% reduction in oil usage, or approximately 4,000 metric tons of CO2 equivalents per year.
- Modernization of the cogeneration turbine at our Coosa Pines (Alabama) pulp mill to reduce purchased electricity use by 6%.
- Reduction in the use of the auxiliary boiler fueled with bunker C oil at the Dolbeau (Quebec) paper mill, equivalent to a reduction of 1,600 metric tons of CO2 equivalents per year.
- C$5.5 million investment at our Kénogami (Quebec) paper mill to optimize the pulp-refining process with pressurized refiners and to generate energy from the recovered steam for an approximate decrease of 10,000 metric tons of CO2 equivalents each year.
Climate Change Governance
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, Energy, Procurement) 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 director, 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. Several other resources are involved in the development of these projects, including project engineers, financial controllers, and environmental coordinators. Environment coordinators also ensure 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.
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).