Generational change provides resource industries new opportunities if they can meet ESG challenges

All images: iStock

Gen Z, the population born between the mid-1990s and 2010, is coming of age and as they assume greater economic power it will alter how resource industries operate, Luree Williamson, CEO of Ag for Life, told a recent workshop focused on how the agriculture, energy, and forestry sectors can work together to manage ESG risks while growing economic opportunities.

To meet Gen Z’s expectations for environmental, social and governance action, the resource sector is going to need to solve its GHG emissions risks, while meeting the new generation’s other environmental and social concerns, said Williamson.

Last year, Gen Z became the largest generational cohort, constituting 32 per cent of the global population, or 2.47 billion of the 7.7 billion people on earth. It currently has $140 billion in spending power, and that number is expected to grow. 

So who is Gen Z and what do they want?

Members of Gen Z are more racially and ethnically diverse than any previous generation. They are on track to be the most well-educated generation. They are digital natives who have little if any memory of the world as it existed before smartphones, said Williamson.

“Gen Z wants to change the world,” she added. “Climate change is their top issue. They have grown up with it.”

They also put the blame for climate change on corporations and believe it should fix the problem, said Williamson, citing a recent survey that found more than 90 per cent of Gen Z's believe business has a responsibility to help solve environmental problems. And that means a change of mindset in the agricultural, energy and forestry sectors.

“Being a responsible business is no longer an advantage, it’s expected,” she explained. "A company’s actions must match its ideals, and those ideals must permeate the entire value chain. If your company’s actions match that vision they will show up and support you.”

“If you want Gen Z’s commitment, the rules are simple: be authentic, put actions to words, embrace diversity, and be prepared to roll up your sleeves and do a little good in the world,” she added.

Environmental concerns, including the impact of industry on air, land, and water, is the key area for Alberta’s resource sector to focus to gain Gen Z’s support, said Bill Whitelaw, managing director, Strategy & Business Development, for geoLOGIC systems and JWN Energy. But this doesn’t mean the sector shouldn’t focus on the S and G in ESG.

“Inclusion and diversity are important,” said Whitelaw, as is innovation. “Technology is what enables ESG solutions.”

Alison Jackson, office managing partner for EY Calgary, said the next generation workforce will bring the new ideas forward that are needed to address the environmental issues facing resource companies.

“From start-ups to mature companies change will come from the astute application of technology,” she said. "There is a spectrum from existing technologies that already exist that can be applied in other areas to technology that is new to the world. Technology is only limited by the capacity to believe. Dream big.”

Across the resource sector leadership recognizes the need to address climate change and greenhouse gas emissions, along with water and land use concerns. However, each sector has its own unique challenges that influence the choices it makes in achieving its goals.

“For oil and gas a really big challenge is attracting and maintaining investment,” said Glen McCrimmon, vice-chairman for the Clean Resources Innovation Network (CRIN). “That means being cost-competitive and probably more important improving perceptions around sustainability performance.”

The industry is taking a variety of approaches to reduce its emissions, he explained. This includes novel hydrocarbon extraction technologies, electrification, and carbon capture, storage and utilization.

It is also dealing with reducing water use and land use, McCrimmon added. Water use is being targeted through re-use and recycling technologies, while the focus on land use is on limiting the footprint up front in planning and cleaning up and retiring exhausted assets.

Agriculture also has a need to reduce emissions, which account for around eight per cent of total Alberta emissions, said Virginia Mulligan, program manager, Smart Agriculture and Food, at Alberta Innovates. But it also needs to rapidly increase production to feed a growing world, manage the current impacts of climate change on production, and maintain and grow the land base as a carbon sink.

“One of our main challenges is the growing population at the global level,” she explained, with global population expected to reach 8.5 billion by 2030 and 9.7 billion by 2050. “What that means is we have to produce more—more food, more raw material. To meet these demands we need to increase production globally 60-70 per cent with the same land we have.”

“Agriculture production is very dependent on the weather and climate,” Mulligan added. “We know the changing weather patterns of the last few decades are already having an effect on production in the agriculture sector.”

Another challenge facing both agriculture and forestry is maintaining and enhancing the role of soil, grasslands and forests as a carbon sink, said Mulligan. Canada represents 30-40 per cent of carbon storage in the world, with the majority of that storage in soils.

“Soil is the common ground between the three industries,” said Mulligan, adding that the grasslands are very important and stable carbon sink containing around 1.5 billion tonnes of stored carbon. “And that also relates to soil health. It’s important to have healthy soil as in agriculture that is where our raw material pretty much comes from. We’ve seen a decline in organic matter 30-50 per cent in the soil in Alberta in general.”

Globally, Canada’s boreal forests are seen as an important carbon sink as well, she added.

Keith Murray, director Industry/Government Relations for Alberta Forestry Products, said forestry can play a role in limiting emissions through the use of waste in biofuels and the use of wood pellets in renewable power generation.

But it’s important to recognize agriculture, forestry and energy all have their own definition of the environment based on the ecosystems it operates in and the type of resource targeted. But that doesn’t mean the resource sectors and can’t collaborate effectively on shared concerns, he noted.

“Alberta has done a fantastic job collaborating,” Murray said, pointing to the Alberta Water Council, Clean Air Strategic Alliance, Watershed Planning and Advisory Councils, and Alberta Airshed Council as examples. “All three sectors participate voluntarily. They are all helpful in reaching out to government.”

More work needs to be done, however, to create an effective, integrated approach to managing air, land and water issues, he added. One area where the sectors could collaborate is on working to reduce policy layering as different levels of government try to manage the same environmental issues.

“It creates regulatory angst and uncertainty," said Murray. “And as governments change regulations change.”

CRIN’s McCrimmon said another policy area where it makes sense to work together is on simplifying carbon pricing and offsets so regulations are easy for the sectors to understand and follow. This includes developing a system for nature-based solutions like soil sequestration and alternative farming models. It also includes carbon sequestration in plant life in forestry. 

“There are enormous opportunities for cross-industry collaboration to pull and leverage from the three industries to influence policy,” he explained.

Murray said technology is another key area where collaboration makes sense. All three sectors are working to develop digital technologies like autonomous field equipment or remote sensing and monitoring systems to track land and water use and wildlife patterns and they could combine efforts to speed adoption.

Mulligan said the agriculture sector also sees major opportunities through adopting new technologies.

“Smart agriculture is a new concept focused on the development and application of technologies to increase both the quantity and quality of products,” she explained, adding there are many examples of applications already in use including precision agriculture that targets optimal seeding, fertilizer and pest control use. Precision ranching is an emerging sector of smart agriculture. It is the use of sensors for automated monitoring of livestock, stock tanks, rainfall, and forage growth.

The three sectors could collaborate to access funding to push these shared technologies into the field, said McCrimmon.

“Funding and financial incentives are needed. Clean-tech opportunities don’t always have a clear financial value proposition,” said McCrimmon. Help is also needed to push promising research and development projects over the finish line. “We need incentives to encourage the application of not quite technology in all these areas.”

The resource sector workshop, entitled Growing Forward Together: An energy, agriculture and forestry industry collaboration workshop, was sponsored by Nutrien, AgExpert, and EY.

Partners included: Ag for Life, Radicle, Weather Innovations, and JWN Energy.

Editor’s NoteIn late-March leaders from the agriculture, energy, and forestry industry gathered virtually to discuss how they could work together to address environmental, social, and governance (ESG) issues impacting their respective industries. The focus was on finding opportunities to collaborate on projects in emissions reduction, water use and quality challenges, and land use challenges.

This three-part editorial series addresses the outcomes from this workshop.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.