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responsible investing report

Eco Leaders®: An Offering for responsible investors

Riverbridge offers
Eco Leaders® as a strategy that exemplifies responsible investing.

For two decades, our Eco Leaders® strategy has invested in transformational companies that are ESG-minded.

Eco Leaders® holdings are:

positioned for long-term growth and superior capital appreciation

excelling at resource efficiency and sustainable practices

To us, these realities are inextricably linked.

We do not rely on rigid checklists or screens to select the companies within Eco Leaders®. We personally, thoroughly evaluate every holding in Eco Leaders® the same Riverbridge way: through in-depth research and extensive conversations with management teams and peers.

For Eco Leaders
® we are looking for companies that are compounding their positive impact; in addition to being sustainable themselves, they enable their customers to improve resource efficiency, reduce waste, and deliver higher quality products and services. These companies are leading their industries in terms of prioritizing Environmental, Social, and Governance factors.

Eco Leaders® at a glance

As of 12/31/2019

20-year track record

All-Cap portfolio

46 holdings

14.8% 5-year turnover

Fossil fuel-free

Companies uniquely excelling at long-term sustainability and resource efficiency

There is no universal definition of terms or practices within the responsible investing space. Here are some insights into what differentiates Eco Leaders® as a strategy.

Is Eco Leaders® an ESG offering?

Yes—but its inception as a portfolio also predates the term. Riverbridge has been prioritizing Environmental, Social, and Governance factors in our investments since our founding in 1987 and since opening Eco Leaders® in 2000. It wasn’t until 2005 that ESG became an industry term.* For Riverbridge, being ESG-minded is not a result of current market demand but an expression of how we practice responsible investing.

Are we active managers?

Yes. Riverbridge relies on our own research to select each of the companies in our strategies.

How do we engage with management teams on ESG issues?

We invest in companies with management teams that understand that Environmental, Social, and Governance factors are important to sustaining their businesses. We do not, however, seek to alter the behavior of the management teams we invest in. If these management teams must be convinced of the link between a strong ESG profile and a sustainable business, they are not a fit for our strategies.

Do we use negative screens?

We believe that the use of negative screens to find the most responsible companies is a limiting method to find the companies that make the most compelling business investment. We prefer to dig into the fundamentals via our in-depth research process. This way we avoid the following:

Greenwashing/bias towards surface-level marketing

Bias against small-cap companies lacking resources to produce competitive ESG-specific material

Companies slipping through the cracks of various screens

How does proxy voting fit into our process?

It is the policy of Riverbridge to vote all proxies for the exclusive benefit of the accounts whose assets we manage. Generally speaking, proposals which maximize the value of portfolio securities over the long term will be approved with consideration given for the Environmental, Social, and Governance issues that aid in this objective. Our full proxy voting policy can be provided upon request.

What are the markers of ESG that we look for in Eco Leaders®?

Environmental

Improving resource productivity

Innovatively streamlining supply chain impact

Reducing dependency on the environment

social

Healthy company culture

High employee engagement

Positive customer experience

Excellent reputation among competitors

Helping other companies do better

Governance

Transparent leadership embedded in the company’s DNA

Strong alignment and growth potential within management team and board of directors