Our 2020 Sustainability Report celebrates the power of resilience. Resilience not only allows people and the planet to respond to crisis, recover and thrive, it allows businesses to do so as well. We witnessed this in 2020 as many businesses that had a clear focus on environmental, social, and governance factors – keys to their resilience –…
Adam Peck, Malkiel’s Misguided View of ESG Investing
Advisor Perspectives, February 1, 2021
Burton Malkiel, esteemed author of the classic investing book A Random Walk Down Wall Street is one of the more prominent critics of environmental-, sustainable- and governance-based (ESG) investing. He called ESG investing a “self-defeating” strategy in a recent Wall Street Journal column.
But Malkiel and other detractors who claim ESG is a fad are missing a key element in their arguments, namely that companies are incorporating sustainability into their operations both in response to – and increasingly quite apart from – the ESG investing trend.
People invest in stocks because they want to make money. That’s a basic truth that ESG investing neither needs nor seeks to change. Rather, ESG investing asks, “If you can do good with your money while also achieving attractive returns, why wouldn’t you?”
Greg Wait featured in Your ESG investment may be a ‘light touch’ fund and not as green as you think
Marketwatch. January 4, 2021
Environmental, social and governance investing resonates with people who want their investments to align with their values, and the boom in this investing style has fund companies launching more ESG investment vehicles.
But these funds may not be as green as investors think they are.
ESG investing considers both financial return and social and environmental good. But just as investors can disagree on where to draw the line between value and growth investment styles, they can come to different conclusions about how well companies are delivering in these areas. There are no U.S. nor global standards.
Greg Wait featured in Here’s how you can add sustainable investments to your 401(k) holdings even if your plan doesn’t include ESG funds
Marketwatch. November 13, 2020
Even as the Trump administration actively discourages environmental, social and governance investing in employer-sponsored retirement plans — a rule the Biden administration may overturn — it’s not like investors had a lot of ESG choices to begin with.
When Morningstar looked at lineups for defined-contribution plans like 401(k)s or 403(b)s , the research firm found only 4.5% of these plans offered at least one sustainable fund — that is a fund that intentionally incorporates ESG.
But for those who want to invest that way, there are ways to do it within the company-sponsored retirement plan. It just takes some legwork to find them. Read more
Riverwater Partners’ Statement on Racial Equity
June 11, 2020
Worldwide protests over the past weeks spurred by the killing of George Floyd have brought our society to what we can only hope is a tipping point. We recognize that the effects of racial inequalities are pervasive and profound. In addition to unjust and unnecessary violence, disproportionately devastating realities in the Black community in the wake of the COVID-19 pandemic have further highlighted the effects of systemic racism. Read more
SRI Investments in 401(k) Plans: High Demand, Low Supply
Benefits Magazine. February 2020
Greg Wait of Riverwater authored an article for the February 2020 edition of Benefits Magazine that looks into the limited availability of SRI Investments in 401(k) plans and offers solutions to plan sponsors wanting to respond to the increasing demand for SRI investment from participants. Read more
Riverwater Partners Acquires Falcons Rock Investment
Pensions & Investments. September 3, 2019
Riverwater Partners, a domestic small- and midcap equity manager that specializes in responsible investing, acquired financial adviser Falcons Rock Investment Counsel, confirmed Riverwater spokeswoman Jody R. Lowe.
Terms of the deal, which closed Aug. 30, were not disclosed.
This acquisition brings Riverwater’s assets under management to more than $500 million.
Riverwater Partners LLC I.Q. [Innovation Quotient]: Award Winners
Biz Times, May 27, 2019
Riverwater Partners was the first Certified B Corporation in Milwaukee and the eighth in the state since 2016. Established in 2016, the company was also among the first investment advisory firms dedicated to Environmental, Social & Governance investing in Wisconsin.
The nonprofit B Lab designates for-profit companies as B Corps for meeting its social and environmental standards. ESG-focused investing allows Riverwater to engage with public companies to affect factors like increasing board diversity, conserving natural resources, and ensuring that business practices are held to the most ethical standards.
“We thought it was the right thing to do,” said Adam Peck, founder of Riverwater Partners. “We look to invest in companies that aren’t only making money, but are also making a positive impact on the world.”
Wisconsin’s B Corporations Want to be a Force for Good, Not Just Profit
Milwaukee Journal Sentinel, January 10, 2019
When Milwaukee-based Riverwater Partners LLC picks companies to invest in, it looks at all the typical financial metrics like cash flow and valuation.
But it also takes into account the company’s environmental, social and governance practices.
To prove Riverwater Partners is “walking the walk,” the small investment firm applied for B Corporation certification, joining the ranks of Patagonia, Ben & Jerry’s and Klean Kanteen. The certification is issued to for-profit companies by the nonprofit B Lab. The “B” stands for benefit.
Riverwater Partners Attains B Corp™ Status
PR Web, September 12, 2018
Socially Responsible investment firm becomes Milwaukee’s first business to join global movement of companies committed to using business as a “force for good”
Riverwater Partners, a socially responsible investment advisory firm, has officially become the first Milwaukee company, and only investment advisor in Wisconsin, to achieve B Corp certification. B Corp Certification is for businesses what an organic seal is for food products: a corporations’ commitment to meeting the highest standards of overall social and environmental performance, transparency and accountability. There are more than 2,600 Certified B Corporations in over 150 industries and 60 countries with 1 unifying goal – to redefine success in business.
Companies’ Social Impact Increasingly Scrutinized by Investors
Biz Times Milwaukee, Feb 5, 2018
Last month, BlackRock Inc., the world’s largest asset manager, sent a letter to CEOs of the world’s largest public companies putting them on notice: they need to go beyond profits and do good for all of their stakeholders to gain its favor. “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society,” wrote BlackRock CEO Laurence Fink. These investment strategies are sometimes called socially responsible investment; sustainable, responsible and impact investing; and environmental, social and governance investing.
Investing with Environmental and Social Impact
Milwaukee Business Journal, May 2018
More and more investors are looking beyond the bottom line when it comes to investing. They’re seeking out companies that have diverse leadership teams and are socially and environmentally responsible as well.
Smarter Buildings On The Rise
Biz Times Milwaukee, August 18, 2017
If temperatures get a little too toasty in the offices at 1433 N. Water St. in downtown Milwaukee and they need to come down ASAP, there’s an app for that. “Our maintenance engineers and property managers are able to access real-time building information and the viability of each piece of equipment in the building through an app on a phone or through a dedicated secure laptop – one in the building and one they carry with them,” said Anne White, development executive assistant with Wangard Partners Inc., the developer and owner of the building.
An Unimaginable Year and 2021 Outlook
As we review 2020 and position for the future, it goes without saying that the past year was exceptional and unpredictable. Who in their right mind could have imagined a global pandemic, racial injustice protests, the worst economic decline in history and a contentious election that resulted in an insurrectionist storming of the US Capitol? No one.
Nor would anyone in a million years have guessed at the depths of the bear market in late March that global stock markets would have performed like they have. In March, the virus was ripping through New York, Italy and China and taking the global economy down with it.
Survival of the Fittest
The market rally that began in March continues its historic run. In stark contrast with what is happening on Main Street, Wall Street has performed exceptionally well, with the S&P 500 posting its best two consecutive quarters in the last 20 years! That incredible performance has not been uniform across all market segments; value stocks in particular have not kept up with growth stocks and lag by over 36% in just the last 9 months – the largest delta since 1979. The economy, while improving from the bottom, is still far from normalized output levels. Not surprisingly, investors have responded by shunning businesses such as banks, energy companies, airlines, and others that similarly rely on an improving economy. Investors have instead paid up for businesses that grow irrespective of the general economy as growth is so hard to come by for many companies.
The New “New” Normal
There are many superlatives to choose from to describe last quarter’s rally. This winter saw the quickest pivot to a bear market in history, followed by an equally rapid rebound in the spring. In fact, we just experienced the strongest 100-day rally since 1933.
After the market bottomed on March 23rd, the Nasdaq returned to its all-time high and the S&P 500 got close to even for the year. Some market segments – small capitalization stocks, international markets and non-investment grade credit – have not rebounded all the way back, but have certainly recovered a good chunk of their losses.
It is hard to square market returns with macroeconomic realities. GDP is predicted to have its steepest decline in history this quarter, layoffs continue in the job market, and COVID-19 cases are flaring across more than 30 states, with many states even reversing re-openings.
We hope that you, your family, and loved ones are holding up and doing well in these unprecedented times.
There is no need to explain in detail what happened to the markets during the first quarter; we are all too familiar with the declines. That said, it was the worst quarter since 1987 and the worst return ever for a first quarter. Compounded with the anxiety and fear brought on by the global health pandemic, the unknown path for the economy post-pandemic has caused investors tremendous anxiety. And with reason. When markets drop, the loss felt by most investors is twice as strong as the joy felt from a similar sized gain. In cognitive psychology this is called loss aversion and is rooted in evolution. To survive, we are primed to fear loss as it could threaten our existence.
In addition to loss aversion, fight or flight is another instinctive reaction to the pain of watching investments decline. As investors, who play a passive role, we cannot control how the companies and funds we invest in operate or how they react to COVID-19 (where we do have control is hoarding toilet paper).