Controlled Thermal Resources builds a foundation to align ESG strategy with business strategy

Controlled Thermal Resources (CTR) is a pre-operational geothermal lithium producer that will provide lithium products, renewable power and U.S.-designated critical minerals to support the electric revolution with minimal environmental impact. CTR plans to ensure a secure and reliable lithium supply chain in the U.S. and do it in compliance with California’s clean energy mandates.  

CTR wanted to ensure their environmental, social and governance (ESG) strategy aligned with, and enabled, their sustainable business goals. This would ensure a long-term growth focus, centered on transparency and continuous improvement as the organization evolves. 

What’s the scoop on CTR? 

Given the intense research, construction and piloting required, CTR has invested eight years into the development of an integrated lithium recovery and conversion facility with a geothermal power facility, known as Hell’s Kitchen, in Imperial County, California. CTR anticipates commercial production at Hell’s Kitchen to begin in 2024.  

CTR’s process has the highest sustainability attributes available. It utilizes 100% renewable energy and steam, significantly reducing the time to produce battery-grade lithium products while eliminating all overseas processing. The operations have a minimal physical footprint and a near-zero carbon footprint. There is no open pit mining or evaporation ponds and no process waste tailings. The geothermal brine, after lithium recovery, is returned to the geothermal reservoir deep within the earth.

*Source: Control Thermal Resource's process for producing battery-grade lithium products

Because of the positive impact CTR will have on the environment, local economy and electric vehicle (EV) supply chain, it has received support by federal, state and local government agencies.  

The company has headquarters in California and offices in Brisbane, Australia. The location of CTR’s operations in Imperial Valley, California lends itself to additional challenges to be addressed in the organization’s ESG strategy. The Imperial Valley is an area known for its rich opportunity for renewable energy production and availability of abundant and affordable land. High unemployment and poverty rates present an immense opportunity for CTR to positively impact surrounding community members and Native American tribes. With a proximity to the Mexican border, CTR is immersed in rich Mexican American culture resulting in a diversified workforce.    

The business challenge

With a focus on sustainable operations and innovative green technology, the company knew ESG concepts were core to their business. As a young, lean organization, they sought advice on how to strategically integrate, operationalize and articulate their story to maximize value and keep up with the evolving ESG landscape. 

CTR’s core value and vision statements are intrinsic to most members of the organization, however these statements required refinement to better capture the company’s future growth and goals. In the development of their governance model the company prioritized a sustainability committee in an oversight role in the execution of ESG strategies. The company’s governance structure and enterprise risk management approach are grounded in holistic risk oversight including comprehensive enterprise risks that incorporate ESG risks.   

While CTR spent nearly a decade focused on research, construction and testing to ensure their operations were performing as expected, the organizational governance required to scale the organization was the next logical step in the company’s development. CTR needed guidance incorporating their inherent commitment to sustainability into the governance and operations of the company. Cultivating a culture of sustainability meant clearly defining the company’s purpose and goals. 

In effect, CTR needed to build their ESG program from the ground up, so it aligned with their business strategy. The ESG strategy needed to:  

• progressively guide leadership, stakeholders and align with the company’s strategy and sustainable business goals
• align with and enhance the culture of the company
• benefit surrounding communities
• adhere to the requests and requirements of customers and regulators
• provide a framework of accountability for key ESG targets and goals

The ESG journey

In order to lay the foundation for the company’s future state ESG disclosures, Baker Tilly’s strategic advisors met CTR and helped them to:

1. complete a current state assessment by reviewing internal documentation and interviewing stakeholders to gather insights for how the organization views and acts on the concept of sustainability
2. complete a materiality assessment of ESG topics most important to internal and external stakeholders
3. evaluate frameworks and rating agencies to align with for future state ESG disclosures and the company’s long-term objectives to communicate to internal and external stakeholders
4. develop governance policies and board committee purposes accompanying charters in support of ESG efforts and risk management
5. develop a phased roadmap and action plan to achieve future ESG goals and objectives

Results

Working closely with Baker Tilly advisors, CTR has achieved the following:

• established the foundation for its corporate sustainability strategy; aligning their organizational strategy to ESG operations 
• established a governance framework that is inclusive of enterprise risk management and ESG priorities, including a sustainability board providing oversight of ESG initiatives and reinforcing the company’s commitment to ESG priorities 
• laid the framework for continued growth by establishing a road map and action plan for ongoing ESG operations within their organization and prepare them for future reporting requirements (such as the proposed SEC rules)

In addition, CTR’s overall work will support the following state and federal initiatives:

• US Federal Executive Order to decarbonize the electricity sector by 2035 
• US Federal Executive Order to have net zero emissions by 2050 
• California Natural Resources Agency Cutting the Green Tape 
• California Renewable Portfolio Standard Goals and Clean Energy Goals 

Building a sustainable future 

CTR has built the foundation for its corporate sustainability strategy, which aligns their organizational strategy to ESG principles. They have also established a governance framework that includes risk management and ESG priorities, as well as a sustainability board providing oversight of the company’s ESG initiatives. Finally, their team has developed a road map and action plan for ongoing ESG operations, which will prepare them for future public reporting requirements to both federal agencies (like the SEC) and investors.

In short, CTR is building the first fully integrated geothermal-lithium facility in the U.S. to deliver clean energy and lithium with a near-zero carbon footprint. They are building a strong ESG foundation enabling them to quickly scale their operations, while communicating their story with the auto, energy and technology sectors, investors, regulators, and the general public. Working alongside Baker Tilly’s strategic advisors, CTR will embark on the next phase of their ESG journey by building upon, developing and evolving their ESG program.