FOCUSING ON AGILITY

Chart Industries Jill Evanko Empowers the Workforce

The oil and gas industry's future will be tempered around free cash flow and building on demand, which drives less variability and provides steadiness, said Chart Industries President & CEO Jill Evanko.

Chart Industries is a leading manufacturer of highly engineered equipment applications in the clean energy and industrial gas markets. Led by Evanko since 2018, Chart has helped customers expand and grow investments in technology.

Over the past few years, Chart has relied on existing customers and maximizing relationships to expand and grow investments in technology and assisting customers in lowering emissions and/or developing clean technologies.

“All the inorganic investments and acquisitions we have done in the last two years have been done without a banker,” Evanko said. “We work through the relationships we already have and build on those natural synergies.”

Building on existing relationships has grown Chart’s returns, while allowing for new, innovative technology processes and expansions to address clean energy challenges across multiple industries.

“We bring in the founders of the technologies we have in our portfolio once a month to brainstorm on how to take technologies for our traditional customers and cross-sell in a way that is affordable, easy and will address a challenge for the customer,” she said.

For example, one idea stemming from these sessions was the development of a containerized water treatment system that hooks on the front end of a hydrogen electolyzer when clean water can’t be found in the field. Chart developed a system that catches rainwater, cleans it and produces clean hydrogen.

These innovative business practices have been the standard for Chart. A major part of their business is building out a menu of options for customers. They focus on four categories: clean water, clean power, clean food and clean industrial.

“We can do a total solution, or the customer can pick a piece of the solution,” Evanko said. “Our commercial sales teams give customers a variety of options. Here are three ways you can solve the problem. We may be able to do two out of the three, and the third they may have to go somewhere else, but we give them those options. I believe, broadly, you get more exponential growth when the industry is thinking as a whole.”

She used carbon capture to explain where customers may need to invest a small amount for the technology, but in the end, it saves money while producing cleaner practices that support ESG goals in the long run.

“For example, if you want a carbon capture facility at your existing asset, we will install it, we will design it, and its cost will be about 40% higher than you operate today,” Evanko said. “But 20% will come back in CO2 reuse. We are helping customers with options.”

Chart also targets three areas of investors: clean tech shareholders, OFS shareholders and industrials shareholders. Through this practice, Chart has increased investments while continuing to meet investor ESG requirements.

Supply Chain Challenges

As supply chain challenges continue to increase, Chart is also facing new ways to address short supply and increased pricing. They are more constructive in the projects they take on and focus on being agile in their business practices.

“Supply chain has been a major issue for us – supply chain logistics and material input costs,” Evanko said. “Material has been especially brutal with the lack of stainless steel, carbon steel and aluminum being our top three supply challenges.”

When asked if she sees an end in sight, Evanko said, “When people ask, is today better than yesterday, the answer has not been yes. I would say supply chain challenges will last indefinitely.”

Evanko notes Chart is much more agile than they were 12 months ago. She empowers her team to look both locally and globally for supply.

“With increased demand, you must be strategic and not take on all the work that comes your way,” she said. “In the oilfield that can be tough as you are looking to increase productivity and volume. From our perspective, if we can’t get the price we need, we can’t do the work. If we miss our forecasting time, we are viewed as incapable of the job, therefore we ensure we have the right pricing and can hit our deadlines before taking on the work.”

Being Realistic with ESG

While Chart is implementing innovative customer relations and empowering its workforce to be agile, they also have well defined ESG goals – with executive pay tied to ESG and complete support from the Board of Directors.

“With respect to ESG, we think of it two-fold. One is how we help our customers. Second is how do we help our own ESG targets, and we make this known throughout the company,” said Evanko.

“We are blessed with a portfolio that allows us to play across the spectrum and applications. We will sell to anyone that wants to buy from us. We aren’t going to ban customers from buying equipment. We work with our customers to help them work towards ESG goals, while also meeting returns.”

To map out their ESG path, Chart hired a sustainability consultant to identify areas of the company where they are able to reasonably make changes without overtaking the day-to-day operations. The consultant helped them identify tangible projects to address ESG, while still making positive returns for the organizations. One example is the installation of solar panels in their shop in Italy. It saved Chart money, and it helped address ESG goals.

Evanko says to be successful in meeting ESG goals, you must set measurable metrics.

“With the assistance of our sustainability consultant, we gathered our starting off point, our data, pointing to here’s what our emissions are and what our GHG intensity is. Then, we decided we would scale that between now and 2030 and go down by 30%. That is our base metric. We are able to then measure it, produce our sustainability report, and have data that backs up our decisions,” she said.

“To be successful, you must know your metrics and have a roadmap. It is ridiculous to put a goal out if you have no way to meet it.”

Mission and Talent

Evanko is especially proud of Chart’s workforce and its ability to maintain and reskill workers through a cyclical environment. A few reasons they have been successful is through culture and their training development programs.

“We have four key themes at Chart, number one is safety. Number two, be nice to customers. That may sound silly, but it is imperative to the success of the organization. Number three, strong work ethic and number four is to give back and have fun. Every one of our employees knows these four key themes,” she said.

She also highlighted the worker focused training programs. Twenty percent of Chart’s workforce is made up of veterans, and they partner with Workshops for Warriors to offer welding training to those looking to expand their skills and experience.

Chart also has rotational engineering development programs, engineering internships and an emerging leaders program, which includes employees in all aspects of their careers – from early career to those with many years of experience who may be looking to contribute in new ways.

“We have field service employees in the program, and they work on high impact projects across the company, which can range from a tax project to implementing capacity expansion,” Evanko said.

“Talent programs for us are broad, but very impactful for our business.”

Chart also has volunteer committees and working groups. Through the leak detection group, they saved almost $1 million from identifying leaks in the field. They have also identified environmental and energy inefficiencies, as well. The mission to make the company better underpins everything they do through these training and volunteer programs.

Evanko is proud that Chart has established a very diverse Board of Directors.

“We have four women, two of those females are African American and we have our first black female Chair. She is one of only three black female chairs of publicly traded companies,” Evanko said. “We are 50% diverse with the best people in place.”

By having an already diverse Board established, Evanko believes this gives Chart more freedom to focus on multi-year strategies, and how to undertake Board transitions.

Global Energy

Evanko also discussed the global energy environment, pointing out that Russia’s invasion of Ukraine has led to a more pragmatic dialogue when it comes to energy expansion. She thinks the industry will not return to speculative build being the main driver for their business practices.

“Those really high cycles of ups and then downs are going to be tempered because there is more consciousness around free cash flow,” she said.

“They will build when it is in demand, which will drive less variability and provide steadiness. I’m super positive on the future, including in oil and gas.”