We are pleased to release our report on climate strategy—Resilient Energy Infrastructure: Addressing Climate-Related Risks and Opportunities.
The world is faced with two serious challenges. As global population grows—from 7.7 billion people today to more than 9 billion people in 2040—continued economic development depends on access to more affordable and reliable energy. At the same time, the world needs to address climate change by keeping average global temperatures from rising 2°C above pre-industrial levels. Enbridge believes that the world must find new ways to meet this dual challenge and that the answer lies in finding and pursuing multiple pathways in providing affordable and reliable energy while protecting our environment. We are convinced that innovation can and should happen across the entire energy system. That is, meeting this dual challenge will require more renewable energy and cleaner oil and gas. Global energy systems are already being reshaped, providing significant opportunity for companies that are forward looking.
Enbridge is up for the challenge. Throughout our more than 70-year history, we’ve demonstrated ability to respond to change and spot opportunity in energy transitions. Being at the forefront of understanding supply and demand fundamentals has helped us to become one of North America’s largest and most successful energy infrastructure companies—delivering oil, natural gas, natural gas liquids (NGL) and renewable energy. As a leading energy infrastructure company—with assets positioned across the energy system—we have a unique vantage point from which to capitalize on global energy trends.
This report—which is informed by the Task Force on Climaterelated Financial Disclosures (TCFD)—provides insight into how Enbridge sees the transition to a lower-emission economy and the role for our Company within the transition. In preparing this report, we tested the resilience of our strategy and existing assets against two separate International Energy Agency (IEA) scenarios.
This is our first comprehensive climate report. Preparing this report has been and will continue to be highly valuable and is a key part of our strategic thinking. We expect subsequent updates—which will appear in our annual sustainability report— will be even more granular with respect to risk management, metrics and targets.
The bottom-line result of this first report on the resiliency of our business is that we see strong utilization of our existing assets through 2040 and significant opportunity for growth within each of our businesses. We are investing to ensure that we are positioned to compete in a world that will be defined increasingly by both cost effectiveness and environmental protection, including through emission reductions. We are mitigating risk by employing a low-risk business model where the bulk of our revenue is generated by long-term contracts or highly reliable utility-like commercial constructs—that's a key part of our stakeholder value proposition.
We are also planning prudently for a scenario in which the transition to a lower-emission economy unfolds more rapidly than expected. Enbridge believes that diversification and innovation by incumbent energy companies will play a significant role in the transition to a lower carbon future. We have already made our Company more resilient by diversifying to reflect an evolving global asset mix—notably we’ve made big investments in natural gas infrastructure and we continue to see significant opportunity in renewable energy, particularly offshore wind and solar. We are confident in our ability to continue reducing emissions intensity while providing consumers with access to the affordable and reliable energy they need and want.