Risk management has always been at the core of what we do. EnCap controls the boards of virtually all of our portfolio companies. When we evaluate a management team, we look for professionals who have proven track records, extensive operational backgrounds and deep expertise in incorporating environmental, regulatory and health and safety concerns into their business decisions. While we are in frequent dialogue with our portfolio companies, we require them to report and discuss significant ESG matters at board meetings.
EnCap and our employees have a long philanthropic history. We consider this an important part of our ESG efforts and are committed to making a meaningful impact in our communities.
As we look ahead, we are excited about the opportunity set for energy investments. Billions of people around the world do not have access to affordable energy. We expect the demand for energy to continue to grow and improve the quality of life for people around the globe. The challenge we face as an industry is to meet this demand while reducing overall emissions. EnCap is committed to staying informed of ESG standards as they evolve and striving to deliver best in class financial and ESG performance.
EnCap's ESG Principles
Environmental
- Promote the importance to our operators of being responsible stewards of air, land, and water
- Encourage our Upstream companies to monitor and reduce emissions
- Invest in a cleaner energy future via our Energy Transition companies
- Prioritize the use of innovative technologies and practices to improve our environmental performance where feasible
Social
- Take pride in attracting talented employees and provide them an environment to grow and succeed
- Foster an inclusive and respectful work environment
- Strive for best practices regarding health and safety in our company operations
- Partner with communities by providing jobs and engaging with local stakeholders
- Support philanthropic organizations we are passionate about
Governance
- Committed to conducting our business with integrity, honesty, and transparency
- Risk management is core to our investing process – EnCap controls the board of virtually all of our companies
- Review ESG matters at quarterly board meetings
- Collect standardized ESG metrics from our portfolio companies to direct areas of focus and assess improvement
Novo’s standard facility design includes vapor recovery units (VRUs) at all future locations and the company has been installing units at its existing facilities. This equipment enables Novo to capture gas that would otherwise escape into the atmosphere. The associated gas is captured in tanks, which builds in pressure until it is released to the VRU, where it is compressed and sent into a sales line.
Lotus Midstream has taken an innovative approach to carbon capture through its Green Initiative Program. Lotus partnered with Understanding Ag, a regenerative agriculture company, to implement regenerative agriculture practices on 1,600 acres of their underutilized land. This allows carbon from the atmosphere to be captured and returned to the soil, improving the health of the soil and resulting in numerous benefits to the environment and the community. Lotus seeded the land and introduced cows to the property to graze and till the land, leading to an increase in organic matter and expanded carbon capture rates.
Catalyze established an ESG steering committee made up of senior management from each department. In addition, Catalyze drafted a comprehensive and forward-looking ESG policy. One of the first initiatives Catalyze completed and continues to work on is a comprehensive audit of all policies, procedures and practices. Additional initiatives are the implementation of a sustainable procurement policy and a Diversity Equity and Inclusion policy at every stage of the recruitment and hiring process.
XCL is building a million-barrel recycling pond and facility in the heart of the company’s acreage. Approved by the state, the facility is an opportunity for XCL to become an industry leader in the design, permitting and operational excellence of recycling ponds. The process allows XCL to form constructive relationships with regulatory agencies, earn the trust of the community and recycle water at a significant cost savings. XCL has plans to build two more recycling ponds to accommodate future growth, leading to a significant reduction in trucks on roadways and in clean water needs and operating costs.