ESG INVESTING

Riverwater Partners believes responsible investing or ESG investing is in the best interest of our clients, our firm, our communities and our society.  Therefore, we consider environmental, social and governance (ESG) policies, practices, and outcomes, alongside traditional investment criteria, when evaluating potential investment candidates.

As the only dedicated sustainable, responsible, impact (SRI) investment management firm in Wisconsin, the mission at Riverwater Partners is to make the world a better place by growing wealth through sustainable investing.

WHAT IS ESG INVESTING?

We define ESG Investing and Socially Responsible investing to mean incorporating ESG (Environmental, Social and Governance) factors into the investment process. We believe that by paying attention to these E, S, and G factors, companies can have material and positive impacts to the quality of their business and financial performance. Depending on the industry, the particular business and how a company operates, not all companies will incorporate all these factors but the following are the factors we consider most important:

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ENVIRONMENTAL FACTORS

Energy Consumption
Water Use
Emissions Reduction
Waste Reduction
Recycling Programs
Supplier Environmental Standards

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SOCIAL FACTORS

Product Safety
Labor Relations
Consumer Satisfaction
Regulatory Compliance
Supply Chain Monitoring

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GOVERNANCE FACTORS

Stakeholder Rights
Political Involvement
Business Ethics
Board Diversity & Structure
Executive Pay
Ownership Alignment

WHY ESG?

DO GOOD.

Sustainable investments provide capital to companies that consider the people and planet alongside profits. 

DO WELL. 

Numerous studies have shown that companies that incorporate ESG policies and practices into running their businesses generate superior returns versus companies that do not.

And this belief is backed by data. In fact, a recent meta-study of over 1000 research papers on the relationship between ESG investing and financial performance and found either a positive and/or neutral relationship between ESG and financial performance.

We believe that these better business practices generally result in superior returns because:

  1. Increased revenue (as customers want to support the efforts), and/or
  2. Decreased expenses (as a result of lower energy consumption, for example), or
  3. Decreased potential liability (reputation risk), resulting in superior returns over the long term.

Click here to read more about debunking the myth of returns and ESG investing.

HOW WE ESG

ESG factors are an integral part of our investment process but all of our investments are first screened for fundamental investment criteria. More about our process and impact, and the impact of our holdings, can be found in our Sustainability Report. 

RIVERWATER PARTNERS’ SUSTAINABILITY REPORT

winding river in green field sustainability report coverOur 2021 Sustainability Report celebrates the ESG Journey.

While each company and manager has a distinct sustainability journey, all of the journeys have the ultimate goal of generating positive outcomes on the world. The landscape of the journey is always changing.

This report highlights the ESG efforts and positive impact of our holdings, how we engage with them to improve those efforts and our own sustainability journey at Riverwater Partners.

PREVIOUS YEARS’ SUSTAINABILITY REPORTS

2020 Sustainability Report

COLLABORATION

Collaboration with local, national and international responsible investment thought leaders informs our practice and strengthens our engagement.

Carbon Disclosure Project
US SIF
Green Masters
Interfaith Center on Corporate Responsibility
Principles for Responsible Investment
Ceres
Seventh Generation Interfaith

ENVIRONMENTAL
We target companies working towards conserving energy and using renewables in their supply chains while avoiding firms with a history of poor environmental practices. We encourage companies to both actively measure their total environmental impact and set sustainability goals.

 

SOCIAL
We focus on investing in companies that encourage diversity in their workforce, have the best health and safety records in their respective industry, and engage in active discussion surrounding human rights and community issues.

 

GOVERNANCE
Good corporate governance ensures fair treatment of shareholders, customers and employees. In this realm, we look for diverse boards among the talent, race and gender spectrums. We prefer to invest in companies with separate CEO and Chairman roles, well-aligned compensation structures, non-staggered boards and those that have instituted sustainability reporting.

 

UNITED NATIONS PRINCIPLES OF RESPONSIBLE INVESTING

As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time).

We also recognize that applying these Principles may better align investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

Analysis

We will incorporate ESG issues into investment analysis and decision-making processes.

Disclosure

We will seek appropriate disclosure on ESG issues by the entities in which we invest.

Enhance

We will work together to enhance our effectiveness in implementing the principles.

Active

We will be active owners and incorporate ESG issues into our ownership policies and practices.

Acceptance

We will promote acceptance and implementation of the principles within the investment industry.

Report

We will each report on our activities and progress towards implementing the principles.