The Suncor Energy logo is seen at the company's head office in Calgary on April 17, 2019.CHRIS WATTIE/Reuters
The philanthropic arm of Suncor Energy Inc. SU-T is dialling back its support to non-profits, the latest shake-up at the Calgary-based oil and gas giant under its new chief executive.
When Rich Kruger took the reins of the company in April, he said Suncor needed to clarify and simplify its operations, and return to its roots as an oil company that focuses on the business of low-cost production and profits.
The Suncor Energy Foundation (SEF), which celebrated its 25th anniversary last year, contributed $17.8-million to almost 100 non-profit and charitable organizations in 2022. Its focus was on communities where employees work and live, Indigenous organizations and what it calls “social innovation” initiatives, which change society’s actions and beliefs over the long term.
But that’s set to change, according to an e-mail the foundation sent on Tuesday to organizations that have received funding in the past.
“If we’re honest with ourselves, we know SEF has a habit of trying to do too much,” the foundation team wrote. The foundation has become “easily distracted by the number of directions” in which it tries to move at once, it said, and has been spread too thin.
“Given this reality, we’ve asked – and been asked – big questions about where and how we can make the strongest impact. Those questions were tough, and the answers were tougher. Among other things, it became clear that we need to reduce the number of organizations we support.”
Groups will know in the next few days how they will be affected, it added.
The news of cuts was both unexpected and worrisome for Eric Campbell, executive director of the Clean Economy Fund, an Ontario-based environmental charity.
The fund received $200,000 from the Suncor Energy Foundation last year. It spent about a quarter of that on its core operations, but the rest went to other groups doing research and work in the climate space – groups that could stand to lose out should the fund’s grant be reduced or cut.
Canada’s oil and gas producers have a strong tradition of philanthropy. In towns and regions where they operate, they often sponsor local causes as well as parks, sports and community centres.
Mr. Campbell is a strong supporter of the Suncor Energy Foundation in particular, because its role as a registered charity makes it much more transparent than community funding programs at other energy companies, he said in an interview.
“When it comes to social licence for these companies, I think Suncor has really been a model through the establishment of the Suncor Energy Foundation. And if anything, we want the other oil and gas companies to be emulating that model rather than Suncor cutting that part of its identity,” Mr. Campbell said.
The overhaul of the foundation comes after Suncor reported last week that its fourth-quarter oil production was its second-highest quarter ever. The company’s stock price rose on the news, closing 5.93-per-cent higher at $45.34.
Since Mr. Kruger became CEO, the company’s executive team has since been restructured and more than 1,500 jobs have been cut.
Mr. Kruger told analysts on an investor call in August that Suncor would continue to find ways to improve its financial performance, delving into all areas of operations. No part of the business has been spared a review, including the foundation.
Suncor confirmed in an e-mailed statement Tuesday that some organizations will not get future donations from the foundation, but added they will receive all committed funds as well as an exit donation. It said the move “affects a minority of partner organizations” that are less aligned with the foundation’s funding priorities.
It said the company plans to fund the foundation in excess of $20-million for 2024, as it has for the past several years. It will also continue its postsecondary donation program.
At the end of December, 2022, the foundation had pledged more than $14-million to various organizations through to 2026, according to its most recent financial report.
In 2022, funds went to various universities and colleges, community and social-service groups, environmental groups and arts organizations.
Suncor is scheduled to release its fourth-quarter financial and operating results on Feb. 21.