Green Success Stories puts Garrett Delk of Pickering Energy Partners in The Green Spotlight. Garrett discusses his path toward his role in sustainability consulting and energy advocacy at PEP, how the tenets of ESG are reflected in efficient business operations and capital allocation (though the term ESG may be out of favor in some circles), and how it behooves us all to learn more about the energy industry while approaching it with an open mind.
Tell us a bit about your sustainability journey.
My path to working in energy and sustainability was a bit of a circuitous one. After college I started my career in San Francisco at KPMG in their assurance practice for financial services companies, this encompassed Fortune 500 banks, VC’s, and hedge funds. This of course was great foundational skill building but had nothing to do with sustainability.
After two years at KPMG, I joined the Nasdaq where my focus was capital-markets centered. At the time, the group was called Strategic Capital Intelligence, a fancy title for investor targeting, messaging, proxy development, activist investor defense, and capital markets trends advisory. This was my first foray into the energy sector as clients I covered here spanned energy, bio/med tech, and TMT. As a generalist I was a jack of all trades but master of none. I was dangerous enough but lacked deep technical sector knowledge; this was particularly true for energy. Around the same time, a new term was really coming into vogue among capital markets participants, ESG (environmental, social, governance). I like many others thought of ESG as gimmicky, a passing fad –not something to seriously advise clients on and certainly not an investment risk. After two years, my Director at Nasdaq, Addison Holmes (who now heads up Thrivent Asset Management’s ESG Program and Strategy) was brought out to Pickering Energy Partners (PEP) in Houston to help start the firm’s ESG Consulting practice. As PEP was receiving a large amount of interest and engagement on ESG, a year or so after starting the consulting practice they had need for another head, and subsequently brought me out.
Now nearly three years later at PEP I focus on public and private energy companies up and down the value chain – onshore/offshore upstream, services, midstream, coal etc. as well as private sponsors (public equity funds investing in energy). In hindsight now, I can look back and reflect on just how little I knew of U.S. energy and the massive infrastructure behind what happens when we all flick our light switch on in the morning or charge our phones at night – the industry behind making modern day life as we all know it work is impressively staggering. As a native Californian, I can say with confidence there’s a pervasive antagonist view of oil and natural gas in state which is a shame – I respectfully believe this view comes from a lack of quick and simple education on how we all receive energy in the U.S. and while we will undoubtedly continue an energy expansion to include more renewables in our energy mix, oil and natural gas still play a defining role in maintaining modern living and economic growth. The U.S. produces the cleanest, safest, and most free energy in the world relative to other global producers such as Russia, Saudi Arabia, and Qatar.
The term ESG has also evolved a lot since I started at PEP, specifically for investors. Collectively representing the buy-side, this stakeholder group’s traditional approach to ESG application and integration has evolved significantly and is often an unheard divergence from corporate understanding. While external investors and LPs still use sustainability data and metrics in the investment process, many have left behind the ESG colloquialism. The need for material non-financial data and disclosure remains a critical component of risk management, strategic messaging, and investor diligence, but the high-level term “ESG” is now predominantly counterproductive, rhetorical, and polarizing.
Investors are integrating sustainability data now more than ever throughout the investment process; however, they’ve ascended from thinking about these risks in the ESG nomenclature and have graduated to considering environmental, social and governance risks to ROI plainly as investment risk, not thought of separately or considered separately apart from the due diligence process. That’s to say, while many corporates lean on the mantra “our focus is on operating a business and allocating capital efficiently, not ESG,” investors are now widely viewing this statement and sustainability as one in the same; not mutually exclusive.
Tell us a bit about the product or solution you offer.
Our practice at Pickering Energy Partners is called Consulting & Advocacy, we collaborate with private and public companies, insurance providers, asset managers, and trade associations to enhance the impact, efficiency, and ROI of material non-financial reporting, disclosure, and strategy. As strong supporters of a wide range of carbon-intensive businesses, our work ensures that our clients communicate effective messaging strategies and implement internal measures that facilitate the long-term ability to preemptively identify risk and efficiently convey the economic realities of their respective businesses.
Our ultimate goal is to help our clients access high-quality capital, stay ahead of the constantly evolving regulatory environment, and quantitatively demonstrate the economic impact of their strategic decisions.
Share a green success story with us – how have you helped customers or other businesses in the fight against climate change?
I’ll raise you one and give you three:
1. Public small cap oilfield services company (acquired sustainability-linked debt facility)
Publicly traded services company wanted to pursue sustainability-linked financing as part of their energy transition pivot. A critical tenet of the strategy centered on locking down a sustainability-linked revolver.
Created a lasting sustainability reporting infrastructure aimed at maintaining sustainability-linked financing. Client subsequently used publicly available report to close $270M sustainability linked credit facility with interest rate margin and facility fees tied to sustainability performance.
2. Publicly traded E&P increasingly frustrated over lagging sustainability scores
Client’s poor relative sustainability scores (MSCI, S&P, Sustainalytics, CDP etc.) were continually a point of concern expressed by potential investors and the Board. Sustainability scores influential to respective investment decision-making processes did not reflect the company’s economic realities. Implemented the PEP sustainability process to bring scores from the bottom decile to the peer median.
3. Private thermal coal company (Secured long-term debt financing for strategic expansion)
Customized a set of material ESG focused disclosures aimed at fulfilling the respective requirements implemented within debt underwriting. Underwriter and buyer each requested specific sustainability related disclosures which we had aggregated. Company was successful in addressing sustainability related concerns and issued tax free municipal 50M bond at 7.25%.
What would you do with $1 billion dollars?
This is probably an unpopular opinion – I would live off half and index the other half. Keep life simple.
What do you envision your industry looking like in ten years?
In ten years, I see the energy industry as relevant as it is today if not even more so. I believe geopolitical volatility will continue to drive uncertainty in energy markets and anxiety at the state level in maintaining energy security, even ten years from now. I see renewables taking up a larger percentage of the global use energy pie, but not what most people would expect it to be in 2034, oil and gas will still be critical to modern living and economic growth and I see expanded use of sources such as nuclear and a lot more money interested in climate tech – carbon capture, use, credits, etc.
What would you like readers to take away from this article?
I’d like folks that get this far in the article to take away two things 1. Be open to learning about fossil fuels/oil and gas. Most folks see these terms and immediately tune out. A little research is almost guaranteed to change some minds and 2. Stay a lifelong learner, that’s what will keep you interested and fresh throughout your career.
How should readers get in touch with you and/or your organization?
To get in touch with me, please reach out to either delgarr@outlook.com, gdelk@pickeringenergypartners.com, or reach out via LinkedIn just search Garrett Delk.
To get in touch with Pickering Energy Partners Consulting & Advocacy group, please reach out to – ESG@pickeringenergypartners.com
Kudos
Many thanks to Garret Delk and Pickering Energy Partners (PEP). Green Success Stories is happy to support and highlight your efforts! We invite you the reader to do the same.
About Green Success Stories
Green Success Stories is a media platform that highlights leaders in sustainability and climate tech.
We offer professional writing (articles, blogposts, case studies, and more) combined with social media promotion. You get great content + exponential publicity. As a starting offer, we’d like to feature you and your organization in a FREE PROFILE ARTICLE. There’s no obligation, but we’d appreciate your considering our services. Let us know if you’re interested and we’ll share more information.
Support Green Success Stories
Like what we’re doing? Please pitch in and help us highlight leaders in the fight against global warming.
THANK YOU!