Imperial Oil (IMO) Risk Analysis

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Public companies are required to disclose risks that can affect the business and impact the stock. These disclosures are known as “Risk Factors”. Companies disclose these risks in their yearly (Form 10-K), quarterly earnings (Form 10-Q), or “foreign private issuer” reports (Form 20-F). Risk factors show the challenges a company faces. Investors can consider the worst-case scenarios before making an investment. TipRanks’ Risk Analysis categorizes risks based on proprietary classification algorithms and machine learning.

Imperial Oil disclosed 27 risk factors in its most recent earnings report. Imperial Oil reported the most risks in the “Legal & Regulatory” category.

Risk Overview Q4, 2025

Risk Distribution

30% Legal & Regulatory

19% Production

15% Finance & Corporate

15% Macro & Political

11% Tech & Innovation

11% Ability to Sell

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.

Risk Change Over Time

S&P500 Average

Sector Average

Risks removed

Risks added

Risks changed

Imperial Oil Risk Factors

New Risk (0)

Risk Changed (0)

Risk Removed (0)

No changes from previous report

The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.

The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.

Risk Highlights Q4, 2025

Main Risk Category

Legal & Regulatory

With 8 Risks

Legal & Regulatory

With 8 Risks

Number of Disclosed Risks

From last report

S&P 500 Average: 31

From last report

S&P 500 Average: 31

Recent Changes

3Risks added

0Risks removed

1Risks changed

Since Dec 2025

3Risks added

0Risks removed

1Risks changed

Since Dec 2025

Number of Risk Changed

From last report

S&P 500 Average: 3

From last report

S&P 500 Average: 3

See the risk highlights of Imperial Oil in the last period.

Risk Word Cloud

The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.

Risk Factors Full Breakdown - Total Risks 27

Legal & Regulatory

Total Risks: 8/27 (30%)Above Sector Average

Regulation3 | 11.1%

Regulation - Risk 1

Greenhouse gas restrictions

Government actions intended to reduce greenhouse gas emissions include adoption of carbon emissions pricing, cap and trade regimes, carbon taxes, emissions limits, increased mileage and other efficiency standards, low carbon fuels standards, mandates for sales of electrical vehicles, restrictions on sales of gasoline-only vehicles, mandates for disclosure of plans to reduce emissions or reduce the use or production of certain products, mandates for use of specific fuels or technologies, and other incentives or mandates designed to support certain technologies for transitioning to lower-emission energy sources. International accords and underlying regional and national regulations covering climate change and greenhouse gas emissions continue to evolve with uncertain timing and outcome, making it difficult to predict their business impact. Such laws and policies could make the company's products more expensive or less competitive, reduce or delay available business opportunities, reduce demand for hydrocarbons, and shift hydrocarbon demand toward lower greenhouse gas emission energy sources. Current, pending and potential greenhouse gas regulations or policies may also increase compliance costs (such as complying with increased or mandatory disclosure or due diligence requirements and government mandated energy transition plans), increase abatement costs including taxes and levies, increase abandonment and reclamation obligations and impact decommissioning timelines, lengthen project evaluation and implementation times, impact reserves evaluations and affect operations. Increased costs may not be recoverable in the marketplace, could negatively affect the company's returns and could reduce the global competitiveness of the company's crude oil, natural gas and refined products. In 2024, the Government of Canada updated its nationally determined contribution (NDC) under the Paris Agreement on climate change, to reduce greenhouse gas emissions economy-wide by 45 to 50 percent below 2005 levels by 2035, a substantial increase in ambition beyond its original and prior NDC. To implement these goals, the Government of Canada uses a number of policy tools including the Greenhouse Gas Pollution Pricing Act (GGPPA), which sets a federal backstop carbon price Canada-wide through a carbon levy applied to fossil fuels ($50 per tonne CO2 equivalent emissions starting in 2022 and increasing by $15 per tonne annually to $170 per tonne in 2030), and an output-based pricing system for large industrial emitters. Under the GGPPA, provinces are required to either adopt the GGPPA, or obtain equivalency by adopting a price-based system (with a minimum of the federal carbon pricing) or a cap and trade system. Further, in 2021 the Government of Canada enacted legislation to formalize Canada's target to achieve net-zero emissions by 2050 and establish interim emissions reductions targets at five year intervals. Under the Canadian Net-Zero Emissions Accountability Act, the Government of Canada is required to develop an emissions reduction plan for 2030 consistent with achieving net-zero emissions by 2050, and additional sector specific regulations may be developed to achieve this target. Under a November 2025 Memorandum of Understanding between the Government of Canada and the Government of Alberta, Canada and Alberta both confirmed they remain committed to achieving net zero greenhouse gas emissions by 2050. The Government of Alberta obtained federal equivalency for its Technology Innovation and Emissions Reduction Regulation (TIER) that came into effect in 2020 and applies to facilities with CO2 emissions in excess of 100,000 tonnes per year. TIER is designed to reduce emissions by putting a price on a nominal percentage of a facility's emissions, which percentage increases annually in accordance with TIER (for oil sands mining and upgrading facilities, the percentage has increased from 20% for 2020 to 26% for 2026, and is to continue to increase to 38% by 2030 under current regulations). In a November 2025 Memorandum of Understanding, the Government of Canada and the Government of Alberta committed to work collaboratively to design and commit to globally competitive, long-term carbon effective prices, carbon levy recycling protocols, and sector-specific stringency factors for Alberta emitters in the oil and gas and electricity sectors through Alberta's TIER system, which will ramp up to a minimum effective credit price of $130 per tonne, although the date for introduction of the effective price and the rate of price increases over time remain to be determined. In December 2025, the Government of Alberta introduced a compliance pathway under TIER allowing facilities to earn compliance credits though investments in approved emissions-reduction projects in Alberta. Further, the Alberta Oil Sands Emissions Limit Act sets a limit of 100 megatonnes of CO2 per year of emissions in the oil sands sector, but oil sands emissions remain below the limit and it is not yet possible to predict the impact of this act on the company's future oil sands operations in Alberta. With respect to other provinces, Ontario obtained federal equivalency for its Emissions Performance System, which put a price on 8 percent of a facility's emissions in 2022. The price increased by 2.4 percent in 2023 and 1.5 percent in 2024, and will increase by 1.5 percent per year thereafter. British Columbia has carbon pricing in place for all industrial emissions, with pricing that matches the federal carbon pricing schedule since 2022. Increases in carbon pricing could adversely impact the company's operations and financial results unless the company can adapt its operations through technological innovation and investment in a cost-effective manner or meet compliance through offset credits or other mechanisms. There are also various renewable and low carbon fuel standards being developed or already applicable to the company's products. In 2022, the Government of Canada finalized the Clean Fuel Regulations, which require the reduction in carbon intensity of liquid transportation fuels supplied in Canada starting in July 2023. The regulations require fuel suppliers to reduce the carbon intensity of gasoline and diesel by reducing the GHG emissions within the fossil fuel life cycle, blending in low carbon intensity renewables or fuel switching away from fossil fuels. Similarly, British Columbia introduced a Low Carbon Fuel Standard in 2013, which increased to a 10 percent carbon intensity reduction requirement in 2020. Beginning in 2023, the British Columbia government has further increased the carbon intensity reductions to a total of 30 percent by 2030 (compared to the 2010 baseline). Compliance can be achieved by either blending renewable fuels with low carbon intensity or by purchasing credits. In 2025, both Ontario and British Columbia introduced domestic (Canadian) renewable fuel content requirements into their provincial fuel regulations. The Government of Canada's Impact Assessment Act links environmental assessment approvals to climate change-related goals, and has also discussed a goal of establishing legally-binding policies for being carbon-neutral by 2050. Changes and policies related to this act could adversely impact the company's ability to progress new oil sands projects. Uncertainty exists regarding federal overreach into provincial jurisdiction to implement such changes and policies. In October 2023, the Supreme Court of Canada ruled that the Impact Assessment Act was unconstitutional in part. In November 2024, Alberta referred the constitutionality of the amended Impact Assessment Act to the Court of Appeal of Alberta. The impact of this legislation is not fully apparent. Governments may also impose restrictions on production of, or emissions from, oil and gas and electricity to the extent they view such measures as a viable approach for pursuing national and global energy and climate policies. For example, following the publication of a regulatory framework in December 2023, in November 2024, the Government of Canada released proposed regulations that will impose a cap on greenhouse gas emissions from upstream oil and gas activities by 2030, and in December 2024 the Government of Canada released final Clean Electricity Regulations that will require reductions in the carbon intensity of electricity provided to the grid between 2035 and 2050. Although the Government of Canada and Government of Alberta entered into a Memorandum of Understanding in November 2025, under which the Government of Canada committed to not implement the oil and gas emissions cap and to suspend the Clean Electricity Regulations in Alberta pending a new carbon pricing agreement with Alberta to be negotiated in 2026, many details remain to be determined and uncertainty about the future of these policies remains. Concern over the risks of climate change may lead governments to make laws applicable to the energy industry progressively more stringent over time. Political actors, non-governmental organizations, and their agents also seek to collectively advance climate change objectives indirectly, such as by seeking to reduce the availability or increase the cost of financing and investment in the oil and gas sector. These actions include delaying or blocking needed infrastructure, utilizing shareholder governance mechanisms against companies or their shareholders or financial institutions in an effort to deter investments in oil and gas activities, and taking other actions intended to promote changes in business strategy for oil and gas companies.

Regulation - Risk 2

Regulation of oil sands

The company's mining operations are, among other regulations, subject to tailings management regulations that establish approval, monitoring, reporting and performance criteria for tailings ponds and management plans. A failure or perceived failure to satisfy the requirements or if the company's tailings management operations do not operate in the manner anticipated by the company or third parties could materially impact the company's ability to operate its assets. Further, the absence or evolving nature of policies and regulations for the timing and closure of tailings ponds, including the approved technologies and methods for closure (such as the use of end pit lakes and water-capped tailings), and dam safety and delicensing directives, regulations, guides and abandonment requirements, could have a material impact on conditions for approvals and ultimate mine closure costs. Additionally, successful management and closure requires the release of water to the environment, and although an Alberta water release policy and federal oil sands effluent regulations are being developed, the timing and impact of these regulations is uncertain and the absence of effective regulation could negatively impact the company's operations and financial results.

Regulation - Risk 3

Compliance costs

Compliance with environmental legislation can require significant expenditures and failure to comply with environmental legislation may result in the cessation of operations, imposition of fines and penalties, and liability for clean-up costs and damages. The costs of complying with environmental legislation in the future could have a material adverse effect on the company's financial condition or results of operations. The company anticipates that changes in environmental legislation may require, among other things, reductions in emissions from its operations to the air and water and may result in increased capital expenditures. Changes in environmental legislation (including, but not limited to, application of regulations related to air, water, land, biodiversity and waste, such as mine tailings and the production or use of new or recycled plastics, as well as laws and regulations affecting production of the company's products, trading, carbon capture and storage, hydrogen, lower-emission fuels or lithium) or changes in advertising, insurance or other laws that penalize the company for past or current production of legal and/or permitted products and operations may increase the cost of operation or compliance or reduce or delay available business opportunities. Future changes in environmental legislation and the enforcement of regulations could occur and result in stricter standards and enforcement, larger fines, penalties and liability, and increased capital expenditures and operating costs, which could have a material adverse effect on the company's financial condition or results of operations.

Litigation & Legal Liabilities1 | 3.7%

Litigation & Legal Liabilities - Risk 1

Added

Litigation

The company may also be adversely affected by the outcome of litigation, including class actions or arbitrations, and by government investigations or enforcement, in respect of greenhouse gas emissions, the promotion of the company's products, or alleged non-compliance with applicable laws or regulations. Such proceedings are subject to uncertainty and success is not guaranteed, and the company may incur significant expenses and devote significant resources in defending such proceedings.

Environmental / Social4 | 14.8%

Environmental / Social - Risk 1

Regulation of wildlife

Federal and provincial legislation aimed at protecting sensitive, threatened or endangered wildlife, such as woodland caribou and species of migratory birds, may also increase restoration and offset costs and impact the company's projects. If it is determined that such wildlife and their habitat are not sufficiently protected, governments or other parties may take actions to limit the pace or ability to develop in areas of Imperial's current and future projects.

Environmental / Social - Risk 2

Environmental assessments

In addition, certain types of operations, including exploration and development projects and significant changes to certain existing projects, may require the submission and approval of environmental impact assessments mandated under both federal and provincial regulations. The Government of Canada's environmental assessment framework under the Impact Assessment Act expands assessment considerations beyond the environment to include social, health, economic, and gender-based impacts and the impact on Canada's climate change commitments (including a requirement under the Strategic Assessment for Climate Change to provide a credible plan for the project to deliver net-zero greenhouse gas emissions by 2050). It also includes a reliance on strategic and regional assessments and adjusted regulatory review timelines. In October 2023, the Supreme Court of Canada ruled that the new federal assessment scheme was unconstitutional in part. In November 2024, Alberta referred the constitutionality of the amended Impact Assessment Act to the Court of Appeal of Alberta. The impact of this legislation is not fully apparent, but it may impact the cost, manner, duration and ability to advance large energy projects and project expansions.

Environmental / Social - Risk 3

Greenhouse gas emissions reductions

Driven by concern over the risks of climate change, the provinces and the Government of Canada have adopted or have revised regulatory frameworks to report on or reduce greenhouse gas emissions including emissions from the production and use of oil and gas and their products, as well as increase the use of or support for different emission-reduction technologies. These actions are being taken both independently by national and regional governments and within the framework of United Nations Conference of the Parties' summits under which Canada has endorsed objectives to reduce the atmospheric concentration of carbon dioxide (CO2) over the coming decades, with an ambition ultimately to achieve "net zero". Net zero means that emissions of greenhouse gases from human activities would be balanced by actions that remove such gases from the atmosphere. Expectations for transition of the world's energy system to lower-emission sources, and ultimately net zero, derive from hypothetical scenarios that reflect many assumptions about the future (including supportive policy and technology advancements) and reflect substantial uncertainties. The company's actions with respect to the energy transition carry risks that the transition, including underlying technologies, government policies, and markets as discussed in more detail below, will not be available or develop at the pace or in the manner estimated by current net-zero scenarios. The success of Imperial's strategy for the energy transition will also depend on its ability to recognize key signposts of changes in the global energy system on a timely basis, and the corresponding ability to direct investment to the technologies and businesses, at the appropriate stage of development, to best capitalize on the company's competitive strengths. The company's results may be impacted if the implementation pace and uncertainty of policy reduces the global competitiveness of the Canadian oil and gas industry and the company's crude oil and refined products. Political government changes may create further policy uncertainty resulting in greater investment uncertainty and industry competitiveness concerns.

Environmental / Social - Risk 4

Regulation of air, water and land

The implementation of, and compliance with, policies and regulations related to air, water and land, such as Alberta's Lower Athabasca Regional Plan and Wetland Policy applicable to the company's oil sands assets, could restrict development in current and future areas of operation. Of note, there are currently a number of court actions against the government by Indigenous groups regarding the assessment of cumulative impacts and infringement on exercise of treaty rights. These cases may inform future government decisions and policies regarding land use planning and resource development, and could impact the requirements or willingness to grant regulatory licenses or approvals. The company also depends on water obtained under licences for withdrawal, storage, reuse and discharge in both its Upstream and Downstream businesses, including future projects and expansions. Water use may be limited by regulatory requirements, seasonal fluctuations, regional drought, competing demands, environmental sensitivities, increasingly stringent water management standards, and changes to conditions or availability of licences, which may restrict and adversely affect the company's operations. Additionally, a number of air quality regulations and frameworks are being developed or have been implemented at the federal and provincial levels, including sulphur dioxide limits for refineries in Ontario, and volatile organic compounds and benzene controls required for petroleum liquid storage tanks and loading operations at refining and terminal locations, and could impact existing and planned operations and projects through increased capital and operating expenses including retrofits to existing equipment, and could adversely impact the company's operations and financial results.

Production

Total Risks: 5/27 (19%)Above Sector Average

Manufacturing2 | 7.4%

Manufacturing - Risk 1

Operational efficiency

An important component of Imperial's competitive performance, especially given the commodity-based nature of the company's business, is the ability to operate efficiently, including the company's ability to manage expenses and improve production yields on an ongoing basis. This requires continuous management focus, including technological integration and improvements, cost control, productivity enhancements and regular reappraisal of the company's asset portfolio. The company's operations and results also depend on key personnel and subject matter expertise, the recruitment, development and retention of high caliber employees, and the availability of skilled labour.

Manufacturing - Risk 2

Changed

Safety, business controls and risk management

The scope and nature of the company's operations present a variety of significant hazards and risks, including operational hazards and risks such as explosions, fires, pipeline ruptures and crude oil, chemical or produced water spills. Imperial's operations are also subject to the additional hazards of pollution, releases of toxic gas and environmental hazards and risks, including severe weather (such as extreme cold or wet weather events that have previously impacted the company's oil sands operations), drought, forest fires and geological events. The company's results and ability to achieve its business objectives depend on effectively identifying, assessing, and mitigating these inherent risks, maintaining robust operational integrity, and reducing the potential for human error. To manage these risks, the company applies rigorous management systems, including an integrated operations integrity management system framework, structured processes for equipment inspection, surveillance, maintenance and replacement, and ongoing enhancements to critical safeguards. The company also maintains a disciplined framework of internal controls and applies a controls management system for monitoring compliance with this framework. The company's Upstream and Downstream operations may experience loss of production, slowdowns or shutdowns and increased costs due to the failure of interdependent systems, and substantial liabilities and other adverse impacts could result if the company's management systems and controls do not function as intended.

Supply Chain2 | 7.4%

Supply Chain - Risk 1

Added

Reliance upon third-party suppliers, service providers and ExxonMobil global capability centres

Imperial is reliant on a number of key chemicals, catalysts and third-party service providers, including input and output commodity transportation (pipelines, rail, trucking, marine) and utilities providing services, including electricity and water, to various company operations. The lack of availability, capacity or proximity, with respect to pipeline facilities and railcars, could negatively impact the company's ability to produce at capacity levels. Transportation disruptions, including those caused by events unrelated to the company's operations, could adversely affect the company's price realizations, refining and other operations, and sales volumes. This includes outages of key third-party infrastructure, such as pipelines servicing the company's oil sands assets or pipelines supplying feedstock to its refineries, which could impact the company's ability to operate its assets or limit the ability to deliver production and products to market. A third-party utilities outage could have an adverse impact on the company's operations and ability to produce. The company also enters into contractual relationships with suppliers, partners and other counterparties to procure and sell goods and services, including with counterparties located outside of Canada. Furthermore, the company has agreements with affiliates of ExxonMobil to provide services to the company and to share common business and operational support services to allow the companies to consolidate duplicate work and systems and benefit from global best practices and expertise, and in 2025 the company announced restructuring plans to centralize additional corporate and technical activities in ExxonMobil global business and technology centres, leveraging its relationship with ExxonMobil to realize substantial efficiency and effectiveness benefits from scale, integration and technology. The company's operations, market position and financial condition may be adversely impacted if these counterparties fail to fulfil their obligations. For counterparties located outside of Canada, the risk of such failure may be enhanced and the company's ability to mitigate against such failure may be reduced as a result of a lack of physical proximity, foreign government actions or other geopolitical factors.

Supply Chain - Risk 2

Other supply-related factors

Commodity prices and margins also vary depending on a number of factors affecting supply. For example, increased supply from the development of new or previously inaccessible oil and gas supply sources and technologies to enhance recovery from existing sources tends to reduce commodity prices to the extent such supply increases are not offset by commensurate growth in demand. Similarly, increases in industry refining or petrochemical manufacturing capacity relative to demand tend to reduce margins on affected products. Crude oil, gas and petrochemical supply levels can also be affected by factors that reduce available supplies, such as the level of and adherence by participating countries or others to production quotas established by OPEC or "OPEC+" and other agreements among sovereigns; government policies that restrict (or may have a consequence of restricting) oil and gas production or exports, or increase associated production, reporting or compliance costs, including actions intended to reduce greenhouse gas emissions as described under "Climate change, energy transition and greenhouse gas restrictions" in this Item 1A, and previous Government of Alberta curtailment regulations; collective actions by non-governmental organizations and financial institutions to withhold funding or support from oil and gas producers; the occurrence of wars or hostile actions, including disruption of land or sea transportation routes; natural disasters; trade tariffs, sanctions or broader breakdowns in global trade; disruptions in competitors' operations; and unexpected pipeline or rail constraints that may disrupt and have in the past disrupted supplies. For example, Russia's military action in Ukraine impacted global crude oil and gas supply levels and prices, and contributed to a volatile commodity environment. There also may be new or emerging factors that could increase global oil, gas, and petrochemical supply levels in the short or long term, such as government policies and actions intended to boost or expand development of domestic or foreign oil and gas reserves or accelerate the pace of production reaching the market, including access to previously unavailable, sanctioned, or protected oil and gas resources or the availability or opening of new shipping routes. Dynamic and unpredictable world events may lead to new oil and gas opportunities becoming available or current opportunities becoming less available or unavailable, and such events may adversely affect the company's business and results to the extent that the company is unable to compete effectively for, or is excluded from, such opportunities or any new or existing investments result in reduced returns. Technological change can also alter the relative costs for competitors to find, produce, and refine oil and gas and to manufacture petrochemicals.

Costs1 | 3.7%

Costs - Risk 1

Added

Operating costs and inflation

Current and future increases in operating costs such as energy, transportation and materials, including through shipping, supply chain disruptions and inflationary cost pressures, could adversely affect the company's financial results if it is unable to control or offset these costs. In addition to direct potential impacts on the company's costs and revenues, market factors such as rates of inflation may indirectly impact results to the extent such factors reduce general rates of economic growth and therefore energy demand, as discussed under "Supply and demand". As inflationary pressures generally stabilized in Canada and other countries during 2025, many governments were able to lower interest rates over the period. Potential tariffs and retaliatory actions discussed above in this Item 1A under "Economic conditions" could reintroduce inflationary effects and may adversely impact the company through availability of financing, cost of debt, and exchange rate fluctuations. Additional information regarding the potential future impact of market factors on the company's businesses is included or incorporated by reference under "Item 7A Quantitative and qualitative disclosures about market risk" in this report. Operational and other factors In addition to external economic and political factors, Imperial's future business results also depend on the company's ability to successfully manage those factors that are at least in part within its control, including its capital allocation into existing and new businesses. The extent to which the company manages these factors will impact its performance relative to competition. For projects in which the company is not the operator such as Syncrude, Imperial depends on the management effectiveness of one or more co-venturers whom the company does not control.

Finance & Corporate

Total Risks: 4/27 (15%)Above Sector Average

Corporate Activity and Growth4 | 14.8%

Corporate Activity and Growth - Risk 1

Risk management

There are operational risks inherent in oil and gas exploration and production activities, as well as the potential to incur substantial financial liabilities, if the company does not manage those risks effectively. Environmental hazards and risks, including severe weather, drought, forest fires and geological events, may impact the company's operational performance. For example, the company's oil sands operations have in the past been particularly affected by extreme cold or wet weather and wildfires. The ability to insure risks is limited by the capacity of the applicable insurance markets, which may not be sufficient to cover the likely cost of a major adverse operating event. Accordingly, the company's primary focus is on prevention, including through its rigorous operations integrity management system. The company's future results will depend on the continued effectiveness of these efforts. See also "Safety, business controls and risk management" under "Operational and other factors" in this Item 1A below. Climate change, energy transition and greenhouse gas restrictions

Corporate Activity and Growth - Risk 2

Policy and market development

The scale of the world's energy system means that, in addition to developments in technology discussed above, meeting society's needs for energy and reducing emissions will require appropriate support from governments and private participants throughout the global economy. Ultimately, market solutions with sound business fundamentals are necessary to incentivize and sustain wide-spread solutions that drive emissions reductions. The company's ability to develop and deploy carbon capture and storage, hydrogen, lower-emission fuels, lithium, and other new energy technologies at commercial scale will depend in part on the development of stable and supportive government policies and markets. Failure or delay of these policies or markets to materialize or be maintained, or the development of these policies or markets in a manner that differs from the company's expectations, could adversely impact or delay these investments. Policy and other actions that result in restricting the availability of hydrocarbon products without a commensurate reduction in demand may have unpredictable adverse effects, including increased commodity price volatility; periods of significantly higher commodity prices and resulting inflationary pressures; and local or regional energy shortages. Such effects, in turn, may depress economic growth or lead to rapid or conflicting shifts in policy by different actors, with resulting adverse effects on the company's business. In addition, the existence of supportive policies in any jurisdiction is not a guarantee that those policies will continue in the future. The company's operations and planned projects that have been developed with regard to current or anticipated policies, including but not limited to policies relating to carbon emission credits, may become uneconomic or otherwise adversely impacted if such policies change or are not adopted as anticipated. See also the discussion of "Supply and demand", "Government and political factors", and "Project management" in this Item 1A. Currency Prices for commodities produced by the company are commonly benchmarked in U.S. dollars. The majority of Imperial's sales and purchases are related to these industry U.S. dollar benchmarks. As the company records and reports its financial results in Canadian dollars, to the extent that the value of the Canadian dollar strengthens, the company's reported earnings will be negatively affected. The company does not currently make use of derivative instruments to offset exposures associated with foreign currency. Other business risks

Corporate Activity and Growth - Risk 3

Project management

The nature of the company's Upstream, Downstream and Chemical businesses depend on complex, long-term, and capital intensive projects that require a high degree of project management expertise to maximize efficiency. This includes development, engineering, construction, commissioning and ongoing operational activities and expertise. The company's results are affected by its ability to develop and operate projects and facilities as planned, and by events or conditions that affect the advancement, operation, cost or results of such projects or facilities. These risks include the company's ability to obtain the necessary environmental and other regulatory approvals; changes in regulations; the ability to negotiate successfully with joint venturers, partners, governments, suppliers, customers and others; the ability to protect and enforce the company's contractual and legal rights (including with joint venture partners); the ability to model and optimize reservoir performance and production reliability; changes in resources and operating costs including the availability and cost of materials, equipment and qualified personnel; the ability to qualify for certain incentives available under supportive government policies for emerging markets and technologies; the impact of general economic, business and market conditions; and the company's ability to prevent, to the extent possible, and respond effectively to unforeseen technical difficulties that could delay project start-up or cause unscheduled downtime.

Corporate Activity and Growth - Risk 4

Reserves

The company's future production and cash flows from bitumen, synthetic crude oil, liquids and natural gas reserves are highly dependent upon the company's success in exploiting its current reserves. To maintain production and cash flows over the long term, the company must replace produced reserves, which can be accomplished through exploration discovery of new resources, appraisal and investments in developing discovered resources, or acquisition of reserves. To the extent cash flows from operations are insufficient to fund capital expenditures and external sources of capital become limited or unavailable, the company's ability to make the necessary capital investments to maintain and grow oil and natural gas reserves will be adversely impacted. In addition, the company may be unable to find and develop or acquire additional reserves to replace oil and natural gas production at acceptable costs. Estimates of economically recoverable oil and natural gas reserves and future net cash flows involve many uncertainties, including factors beyond the company's control. Key factors with uncertainty include: geological and engineering estimates, including that additional information obtained through seismic and drilling programs, reservoir analysis and production and operational history may result in revisions to reserves; the assumed effects of regulation or changes to regulation by government agencies, including royalty frameworks and environmental regulations (such as the regulation of greenhouse gas emissions, including accelerated timelines and emission reduction stringency to meet government goals, which could impose significant compliance costs on the company, require new technology, or impact the economic viability of certain projects); future commodity prices, where low commodity prices may affect reserves development; abandonment and reclamation costs, including reclamation and tailings requirements for mining operations; and operating costs. Actual production, revenues, taxes and royalties, development costs, abandonment and reclamation costs, and operating expenditures, with respect to reserves, will likely vary from such estimates, and such variances could be material.

Macro & Political

Total Risks: 4/27 (15%)Above Sector Average

Economy & Political Environment1 | 3.7%

Economy & Political Environment - Risk 1

Economic conditions

The demand for energy and petrochemicals is generally linked closely with broad-based economic activities and levels of prosperity. The occurrence of economic downturns, recessions or other periods of low or negative economic growth will typically have a direct adverse impact on the company's results. Other factors that affect general economic conditions, such as changes in population growth rates or living standards, government regulation or austerity programs, national or regional trade tariffs, trade sanctions or trade controls, international monetary and currency exchange rate fluctuations, decoupling of economies, disruptions to or realignment or breaking of current or historical military alliances, security or public health issues and responses, extended government shutdowns, the inability to access debt markets due to rating, banking, or legal constraints, liquidity crises, market bubbles and corrections, de-dollarization in global trade or the growth or use of alternative common currencies, and other events or conditions that impair the functioning of financial markets and institutions, also pose risks to the company, including risks to the safety of the company's financial assets and to the ability of the company's partners, suppliers and customers to fulfill their commitments to the company. Disruptions to or realignment or breaking of current or historical trade alliances or agreements or global trade and supply chain networks, changes in international trade patterns or shipping routes, or a broader breakdown in global trade, pose risks. During 2025, the United States announced a variety of trade-related actions, including the imposition of tariffs on imports from Canada and other countries. In response, Canada announced its own retaliatory tariffs. The United States and Canada have continued to discuss a potential end to or reduction in such tariffs, but the full impact and duration of such tariffs is uncertain. Furthermore, there remains a possibility of further escalation in the trade dispute, and there is uncertainty regarding the future status of existing international trade agreements to which Canada is a party, including the Canada-U.S.-Mexico Agreement on trade. Although the impact of such actions on Imperial and its partners, suppliers and customers is uncertain, such actions could depress economic activity, reduce demand for the company's products, limit or disrupt supply chains, increase costs, reduce market prices and export volumes of the company's products, or otherwise have a material adverse effect on the company's business, financial condition or results of operations.

Natural and Human Disruptions1 | 3.7%

Natural and Human Disruptions - Risk 1

Preparedness

The company's operations have been and in the future may be disrupted by severe weather events, natural disasters, human error, cyberattacks, and similar events. The company's facilities are designed, engineered, constructed, and operated to withstand a variety of extreme climatic and other conditions, with safety factors built in to cover a number of uncertainties, including those associated with permafrost stability, temperature extremes, extreme rainfall events, earthquakes and other events. The company's consideration of changing weather conditions and inclusion of safety factors in design cover the engineering uncertainties that climate change and other events may potentially introduce. Imperial's ability to mitigate the adverse impacts of these events depends in part upon the effectiveness of its robust facility engineering, rigorous emergency preparedness and response, and business continuity planning.

Capital Markets2 | 7.4%

Capital Markets - Risk 1

Other market factors

Market factors may also result in losses from commodity derivatives and other instruments used to hedge price exposures or for commodity and treasury trading activities. Imperial's future business results, including cash flows and financing needs, may also be affected by the occurrence, severity, pace and rate of recovery of future public health epidemics or pandemics, the responsive actions taken by governments and others, and the resulting effects on regional and global markets and economies. If the company's mitigation and response efforts prove insufficient, then large outbreaks of epidemics, pandemics or other health crises at operating sites, particularly in remote locations and where work camps are utilized, could materially impact the company's personnel and its operations, reducing productivity and increasing costs. Government and political factors Imperial's results can be adversely impacted by political, legal or regulatory developments affecting operations and markets. Changes in government policy or regulations, changes in law or interpretation of settled law,challenges to legislative jurisdiction between different levels of government, third-party opposition to company or infrastructure projects, and duration of regulatory reviews could impact the company's existing operations and planned projects. This includes actions by governments, policy makers, regulators or other actors to delay or deny necessary licences and permits; pause, reduce or retract government incentives for emissions reductions; disrupt or impact reliability as a result of policy decisions on types and pricing of energy available; or restrict the availability of oil and gas leases, investment opportunities or the operation of third-party infrastructure on which the company relies, such as pipelines to transport the company's Upstream production to market or that supply feedstock to the company's refineries. Additionally, changes in environmental regulations, assessment processes or other laws (including but not limited to in respect of climate change and greenhouse gas emissions and company communications relating thereto), regulatory interpretations that exclude or disfavour the company's products under government policies or programs intended to support new or developing markets or technologies or that are otherwise not technology-neutral, and increasing and expanding consultation with stakeholders and Indigenous communities, may increase the cost of compliance or reduce or delay available business opportunities and adversely impact the company's results. Other government and political factors that could adversely affect the company's financial results include increases or changes in taxes or government royalty rates (including retroactive claims or punitive taxes on oil, gas and petrochemical operations) and changes in trade policies and agreements (including those potential tariffs and retaliatory actions discussed above in this Item 1A under "Economic conditions"). Changes in taxation policy could impact the company's financial results and ability to return surplus cash to shareholders. Further, the adoption of regulations mandating efficiency standards, emission standards, procurement standards, or the use of alternative fuels or uncompetitive fuel components, could affect the company's operations. Many governments are providing tax advantages and other subsidies to support alternative energy sources or are mandating the use of specific fuels or technologies. Governments are also introducing bans on certain technologies that could impact demand for products, such as the Government of Canada's regulations to gradually reduce the proportion of permitted sales of new internal combustion engine cars and light trucks from 2026-2034 and ban such sales beginning in 2035. Governments and others are also promoting research into new technologies to reduce the cost and increase the scalability of alternative energy sources, and the success of these initiatives may decrease demand for the company's products. Actions by policy makers, regulators or others may require changes in the company's business or strategy that could result in reduced returns. Governments may establish regulations with respect to the control of the company's production, such as the Government of Alberta's temporary mandatory production curtailment regulations that were in effect from 2019 through 2021, as discussed in the "Supply and demand" section above. Government intervention in free markets may introduce unintended consequences such as market volatility and uncertainty, misallocation of resources, and erosion of investor confidence. Environmental risks All phases of the Upstream, Downstream and Chemical businesses are subject to environmental regulation pursuant to a variety of Canadian federal, provincial, territorial and municipal laws and regulations, as well as international conventions (collectively, "environmental legislation"). Environmental legislation imposes, among other things, restrictions, liabilities and obligations in connection with the generation, handling, storage, transportation, treatment and disposal of hazardous substances and waste and in connection with spills, releases and emissions of various substances into the environment. As well, environmental regulations are imposed on the qualities and compositions of the products sold and imported, and include those aimed at reducing consumption or addressing environmental concerns with certain end products. Changes to these requirements could adversely affect the company's results by impacting commodity prices, increasing costs and reducing revenues. Environmental legislation also requires that wells, facility sites and other properties associated with the company's operations be operated, maintained, monitored, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. This includes the requirement for specific approvals for many areas of interaction with the environment, such as land use, air quality, water use, biodiversity protection and waste, including mine tailings management. The failure to operate as anticipated and adhere to conditions, the delay or denial of approvals, and changes to conditions or regulations, could negatively impact the company's ability to operate its projects and facilities (including but not limited to resulting in mandatory facility shutdowns or suspensions) and adversely affect the company's results.

Capital Markets - Risk 2

Canadian-specific market factors

The market price for western Canadian heavy crude oil is typically lower than light and medium grades of oil, principally due to the higher transportation and refining costs. Western Canadian crude oil may also be subject to limits on transportation capacity to markets. Future crude price differentials between western Canadian crude oil relative to prices in the U.S. Gulf Coast are uncertain and changes in the heavy or light crude oil differentials could have a material adverse effect on the company's business. For example, the United States government has indicated it may reduce trade sanctions on Venezuela and take certain steps intended to increase the volume of crude oil produced in Venezuela, and either of these actions could adversely impact western Canadian crude oil price differentials compared to the U.S. Gulf Coast and therefore the company's business. Additionally, in the past, increased differentials have led the Government of Alberta to enact temporary mandatory production curtailment regulations that imposed production limits on large producers in Alberta, such as Imperial; although the regulatory authority to impose curtailments was repealed at the end of 2021, the use of similar curtailment regulations in the future could have an adverse effect on the company's business. A significant portion of the company's production is bitumen, which is blended with diluent for transportation and marketability of heavy crude oil. Increases to diluent prices, relative to heavy crude oil prices, could also have an adverse effect on the company's business.

Tech & Innovation

Total Risks: 3/27 (11%)Above Sector Average

Innovation / R&D1 | 3.7%

Innovation / R&D - Risk 1

Research and development and technical change

Imperial relies upon the research and development organizations of the company and ExxonMobil, with whom the company conducts shared research. Innovation and technology are important to maintain the company's competitive position, especially in light of the technological nature of Imperial's business, the dynamic and rapidly evolving technological landscape, and the need for continuous efficiency improvement. The company's research and development organizations must be able to adapt to a changing market, regulatory and policy environment, including developing or deploying technologies to help reduce greenhouse gas emissions intensity. To remain competitive, the company must also continuously adapt and capture the benefits of new and emerging technologies, such as artificial intelligence, including growing the company's capabilities to utilize digital data technologies to gain new business insights and support business decisions and operations. There are risks associated with existing and new operations and projects that rely on new technology, including that the results of implementing the new technology may differ from simulated, piloted or expected results. The failure to develop and adopt new technology may have an adverse impact on the company's operations, ability to meet regulatory requirements and operational commitments and targets (including those relating to environmental sustainability and reduction of greenhouse gas emissions), and financial results. The company's Kearl site has converted all of its haul trucks to autonomous operation. The autonomous system is composed of perception systems, sensors and mechanical components on each truck, which feed information to a number of onboard computer systems. These onboard computer systems send real time information over a wireless network to a central server and database that displays real time information to central control room operators who manage the overall fleet's operation. Computer automation systems are used to both maneuver the individual trucks and in an overarching truck assignment application which manages truck routing patterns. The use of the autonomous system helps the company to capture productivity improvements while also reducing costs and further enhancing operational safety. Failure of the autonomous system to operate as intended could result in material adverse impacts to production at the Kearl site and the company's financial results, physical harm to people or the environment, damage or destruction of company assets, and negative reputational consequences. The company applies risk management, internal controls and controls management systems in respect of these risks relating to autonomous haul trucks, as described in "Safety, business controls and risk management" in this Item 1A below. See also "Cybersecurity" and "Reputation" in this Item 1A below.

Cyber Security1 | 3.7%

Cyber Security - Risk 1

Cybersecurity

The company is regularly subject to attempted cybersecurity disruptions from a variety of sources, including state-sponsored actors and actors potentially employing emerging technologies such as artificial intelligence technologies. The company's defensive preparedness includes multi-layered technological capabilities for prevention and detection of cybersecurity disruptions: non-technological measures such as threat information sharing with governmental and industry groups; annual internal training and awareness campaigns including routine testing of employee awareness via mock threats; and an emphasis on resiliency including business response and recovery. See "Item 1C. Cybersecurity" for information on the company's program for managing cybersecurity risks. The company has limited ability to influence third parties, including the company's partners, suppliers, service providers (including providers of cloud-based services for the company's data or applications) and customers, to implement strong cybersecurity controls, and the company is exposed to potential harm from cybersecurity events that may affect their operations. If the measures the company is taking to protect against cybersecurity disruptions prove to be insufficient or if the company's proprietary data is otherwise not protected, the company, as well as its customers, employees or third parties, could be adversely affected. Cybersecurity disruptions could cause physical harm to people or the environment; damage or destroy assets; compromise business systems; result in proprietary information being altered, lost or stolen; result in employee, customer or third-party information being compromised; or otherwise disrupt the company's business operations. The company could incur significant costs to remedy the effects of a major cybersecurity disruption, in addition to costs in connection with resulting regulatory actions, litigation or reputational harm.

Technology1 | 3.7%

Technology - Risk 1

Technology and lower-emission solutions

Achieving societal ambitions to reduce greenhouse gas emissions and ultimately achieve net-zero emissions will require new technologies and added infrastructure to reduce the cost and increase the scalability of solutions to reduce emissions. The company is continuing research and collaboration efforts to advance the development and deployment of carbon capture and storage, hydrogen, lower-emission fuels and lithium. The company's future results and ability to succeed through the energy transition while helping meet Canada's emission-reduction goals and meet its own emission reduction goals will depend in part on the success of these research and collaboration efforts. It will also rely on the company's ability to adapt and apply the strengths of its current business model to providing the energy products of the future in a cost-competitive manner.

Ability to Sell

Total Risks: 3/27 (11%)Above Sector Average

Competition1 | 3.7%

Competition - Risk 1

Competition

As noted in Item 1 above, the Canadian energy and petrochemical industries are highly competitive. Technology and expertise provided by industry service companies may enhance the competitiveness of firms that may not have the internal resources and capabilities of Imperial. As described in more detail above, the company's hydrocarbon-based energy products are also subject to growing and, in many cases, government-supported competition from alternative energy sources. In addition, as the company enters new markets in pursuit of lower-emission business opportunities, the company will need to compete effectively with established competitors in these markets, as well as with new market entrants seeking to capitalize on these opportunities, while successfully navigating changing market conditions or technologies.

Demand1 | 3.7%

Demand - Risk 1

Other demand-related factors

Factors that may affect the demand for crude oil, gas, fuels and petrochemicals, and therefore could impact the company's results, include technological improvements in energy efficiency; seasonal weather patterns; increased competitiveness of, or government policy support for, alternative energy sources or potential substitutes for the company's products; new product quality regulations; technological changes or consumer preferences that alter fuel choices, such as technological advances in energy storage or other critical areas that make wind, solar, nuclear or other alternatives more competitive for power generation; government actions to increase strategic reserves to enhance energy security; increased demand for artificial intelligence, including the construction and expansion of artificial intelligence data centers; changes in customer or consumer preferences for the company's products, including consumer demand for alternative fuel or electric transportation or alternatives to plastic products; broad-based changes in personal income levels, interest rates and inflation; and security or public health issues and responses such as epidemics and pandemics. See also "Climate change, energy transition and greenhouse gas restrictions" in this Item 1A below.

Brand / Reputation1 | 3.7%

Brand / Reputation - Risk 1

Reputation

Imperial's reputation is an important corporate asset. Factors that could have an impact on the company's reputation include an operating incident or significant cybersecurity disruption; changes in consumer views concerning the company's products; changes in consumer media preferences from traditional mainstream media to decentralized and personalized media; a perception by the public that the company is not being fully transparent in the sharing of information regarding its operations that is or may be relevant to community decision-making; actions taken by the company's business partners; a perception by investors or others that insufficient progress is being made with respect to the company's ambition in the energy transition, or that pursuit of this ambition may result in allocation of capital to investments with reduced returns; divergent and evolving policy, legal and regulatory developments, societal views and investor pressures regarding the energy transition; and other adverse events such as those described in this Item 1A. Negative impacts on Imperial's reputation could, in turn, make it more difficult for the company to compete successfully for new opportunities, obtain necessary regulatory approvals, obtain financing, and attract talent, or they could reduce customer or consumer demand for the company's branded products. Imperial's reputation may also be harmed by events which negatively affect the image of the industry as a whole, including public and investor perception of Alberta oil sands in relation to greenhouse gas emissions, Indigenous rights and environmental impact.

See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.

FAQ

What are “Risk Factors”?

Risk factors are any situations or occurrences that could make investing in a company risky.

The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.

They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.

It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.

How do companies disclose their risk factors?

Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.

Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.

Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.

According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.

How can I use TipRanks risk factors in my stock research?

Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.

You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.

Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.

A simplified analysis of risk factors is unique to TipRanks.

What are all the risk factor categories?

TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.

1. Financial & Corporate

Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.

2. Legal & Regulatory

Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
Regulation – risks related to compliance, GDPR, and new legislation.
Environmental / Social – risks related to environmental regulation and to data privacy.
Taxation & Government Incentives – risks related to taxation and changes in government incentives.

3. Production

Costs – risks related to costs of production including commodity prices, future contracts, inventory.
Supply Chain – risks related to the company’s suppliers.
Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.

4. Technology & Innovation

Innovation / R&D – risks related to innovation and new product development.
Technology – risks related to the company’s reliance on technology.
Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.

5. Ability to Sell

Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
Competition – risks related to the company’s competition including substitutes.
Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
Brand & Reputation – risks related to the company’s brand and reputation.

6. Macro & Political

Economy & Political Environment – risks related to changes in economic and political conditions.
Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
International Operations – risks related to the global nature of the company.
Capital Markets – risks related to exchange rates and trade, cryptocurrency.