Page 11 - Riverwater 2020 Sustainability Report

2020 SUSTAINABILITY REPORT
SUSTAINABILITY IMPACT OF OUR INVESTMENTS: ENGAGEMENT EFFORTS
PILLAR TWO: ENGAGEMENT EFFORTS
The second pillar of Riverwater’s Three Pillar Approach is Engagement with companies and policy makers to improve sustainability policy and practices, in order to drive impact for all stakeholders, including employees, supply chains, customers, the environment, society, and ultimately, shareholders.
100% OF RIVERWATER PORTFOLIO COMPANIES MAINTAINED OR IMPROVED ESG SCORES IN 2020
When evaluating companies for inclusion in our portfolios, Riverwater looks at traditional investment criteria (specifically looking for companies with superior businesses, exceptional management teams and attractive valuation) alongside the ESG efforts of companies.
When evaluating the ESG efforts of companies, we focus on those factors that are most salient to a business and its stakeholders and use a proprietary scoring system that weights factors based on a company’s industry. Scores are further weighted by market capitalization, given the significant time and money required for robust sustainability reporting.
We are pleased to report that 100% of Riverwater portfolio companies owned during 2019 through 2020 maintained or improved their ESG scores, according to our internal scoring system8.
ENGAGING WITH ACADEMIA ON ESG EFFORTS
Riverwater engaged with students at several universities during 2020 in an effort to inform them about the benefits of and methodology used to consider ESG as an investment tool and to evaluate sustainability of businesses. As part of this engagement, Riverwater mentored students from Wisconsin Universities on incorporating ESG criteria into fundamental research.
SPOTLIGHT: Riverwater developed a co-application project as part of Marquette University’s graduate engineering program on human rights due diligence practices of Riverwater portfolio companies and evaluate whether they meet UN Guiding Principles, and offer suggestions for improvement. The results of their work are informing our continued work on human rights issues.
8 36% of companies maintained their scores vs. 2019 and 64% improved their scores.
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