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Riverbridge offers a range of strategies that exemplify a commitment to responsible investing.

Since 1987, Riverbridge strategies have invested in transformational companies that prioritize environmental, social, and governance (ESG) factors. 

Riverbridge 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. We personally, thoroughly evaluate every holding in every strategy the same Riverbridge way: through in-depth research and extensive conversations with management teams and peers. 

In all of our holdings, 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 being ESG-minded. 

ESG MARKERS IN RIVERBRIDGE STRATEGIES

As an expression of our unchanging investment philosophy, Riverbridge holdings have core business practices that prioritize Environmental, Social, and Governance factors.

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
OUR APPROACH TO RESPONSIBLE INVESTING

There is no universal definition of terms or practices within the responsible investing space. Here are some insights into what differentiates Riverbridge strategies.

What distinguishes Riverbridge’s approach to responsible investing?

Riverbridge’s approach to responsible investing is distinguished by its authenticity, history, and inherent philosophical integration. Responsible investing—and the corollary concept of ESG investing—is not an approach we have adopted as a recent add-on to our offerings or in response to market demand. Rather, our investment philosophy has been grounded on a mindset of responsible investing since our founding in 1987. Responsible investing is the longstanding bedrock of how we see the very purpose of companies and capital markets and consistently impacts all of our strategies.

Does Riverbridge use negative screens?

At Riverbridge, we believe that the use of negative screens to find the most responsible companies limits our ability to find the companies that make the most compelling business investment. We prefer to dig into a company’s fundamentals through our in-depth research process. This approach avoids:

  • 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
What is Riverbridge’s view of third party rating organizations?

Riverbridge’s proprietary research serves as the basis for our investment team’s decisions. This ensures that our responsible investing considerations are grounded in our long-standing investment philosophy. The vast majority of our research is internally produced and stems from our investment team’s due diligence, including interactions with companies and their ecosystems. Riverbridge subscribes to third party sources such as MSCI to give our team and our clients visibility into how the outcomes of our responsible investing approach measure up to industry standards. In providing third party impact metrics in this report, we are mindful of the potential shortcomings of third party ratings including:

  • Inconsistencies in company evaluation results between various third party rating agencies due to differences in evaluation approaches and criteria
  • A rating bias against companies lacking resources to produce competitive ESG-specific material
  • Third party ratings reflect a historical period of time and do not take into account future initiatives a company may be working on
What is the difference between Riverbridge’s All Cap Growth and Eco Leaders® strategies?

Both strategies invest in companies of all sizes and are very similar in composition. The primary difference is one of designation— Eco Leaders® was created with an explicit ESG mandate. The two strategies have separate inceptions dates and track records; therefore, there are slight variances in position sizes between companies. Over time, the two strategies have largely converged due to the following factors:

  • Recent recognition by management teams that one cannot take shortcuts to build a sustainable business
  • Increased focus on sustainability by company management that has allowed Riverbridge to become more comfortable in certain companies clearing the high bar for our Eco Leaders® portfolio from an ESG perspective
Is Riverbridge an active manager?

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

Does Riverbridge have a formalized responsible investing policy?

Yes, Riverbridge has a formal Responsible Investing Policy that is reviewed annually and can be found here.

Which Riverbridge team members are responsible for the implementation of Riverbridge’s responsible investing policy and responsible investing efforts?

Given that ESG considerations are fully integrated into our investment philosophy, each member of our investment team is responsible for the implementation of our responsible investing policy. The Riverbridge investment team is responsible for continuing to monitor whether the companies we own meet all aspects of our investment criteria and are sustainably building their long-term earnings power. Our lead portfolio managers provide oversight on Riverbridge’s responsible investing efforts, including our PRI reporting process, the development of our Annual Report, and other related activities.

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Riverbridge Responsible Investing Report 2020