BMO CAPITAL MARKETS: Part of the Solution to Decarbonising the Economy

“My team, the acquisitions and divestiture advisory group, forms part of BMO’s broader Investment and Corporate banking coverage of the energy sector,” says Cheryl Sandercock, Co-Head, Energy A&D Advisory and a Managing Director in BMO Capital Markets. “Our team members are predominantly technical specialists, including geologists and engineers, who understand the energy assets and technical aspects related to owning and operating these assets.”

The A&D group assists companies who are selling energy assets to position them appropriately from a technical and operational perspective, as well as improving the confidence of potential acquirors, who will have technical questions and appreciate interacting with professionals who have that technical insight.

“Our core business is advising energy clients on their acquisitions or divestitures of assets or companies,” explains Sandercock. “We collaborate with BMO’s Mergers and Acquisitions team and our services include the evaluation of assets, the managing of a marketing process if a sale or liquidity event is desired, perspectives on value given current market conditions, strategic options, competitive landscape for a company or asset, and advising on negotiation tactics. In an environment as volatile as today’s energy market, we act as that experienced advisor helping our clients get the results they want.”

TRANSITION UNDERWAY

As the world looks for solutions to climate change, reducing carbon emissions has become a priority for businesses. BMO has declared it’s ambition to be its clients’ lead partner in the transition to a net zero world. Carbon neutral for more than 10 years, in 2021 BMO committed to deploy $300 billion in capital to clients pursuing sustainable outcomes through green, social and sustainable lending, underwriting, advisory services, and investment by 2025. Later, as part of its overall 2050 net-zero commitment, it became the first bank in Canada to set interim targets including a 33% cut in scope 1 and 2 emissions from oil and gas borrowers and a 24% reduction by 2030 in scope 3 emissions. And recognising that change can only come about if everyone works together – business, government and people – BMO launched a dedicated Energy Transition Group and committed to being its clients’ lead partner in their pursuit of opportunities driven by the increasing momentum of the global economy’s shift in production and consumption of energy.

“All of our clients have energy transition and decarbonisation as important business focuses and BMO is able to play a key role in helping them to achieve their objectives in these areas,” says Aaron Engen, Vice Chair, Investment and Corporate Banking and Co-Head, Energy Transition. “We believe that in working with clients in an inclusive way, we can more effectively support the economy’s transition to net zero. In the energy industry, for example, by working with energy firms to support their transition, rather than pursuing blanket divestment, we will make the progress needed to achieve net zero outcomes faster. And as the global economy undergoes structural changes in how energy is produced and consumed, we will apply the same entrepreneurial spirit and innovation we’ve helped grow for over two centuries.”

According to Engen, conversations with clients often include the topics of energy transition, decarbonisation, and where business opportunities exist in those areas. BMO is uniquely positioned to help its clients. To do this, the bank leverages three different but critical areas of expertise: The Energy Transition Group with industry leading sustainable finance advice and solutions; BMO’s Corporate Sustainability team which ensures BMO continues to be a global sustainability leader aligned to strict performance standards; and the BMO Climate Institute, which brings academic rigour, science and thought leadership to clients, communities, and the bank.

“In Capital Markets, the Energy Transition Group and the Energy franchise work very closely together,” Sandercock furthers. “We have staffed the ETG with experts, including from my team, who work across all industry groups in energy transition to assist clients. Everybody, whether an energy producer or an energy user, is going to be affected by the transition, and banks have an important role to play helping our clients manage the impact of the energy transition on their business. Helping our clients adapt and thrive through the coming transition requires a thoughtful, balanced and accelerated approach.”