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responsible investing report

Our beliefs about responsible investing

At Riverbridge, there are no shortcuts to choosing responsible investments.
We take a bottom-up,
human-oriented research approach.

Riverbridge does extensive research prior to investing
in any company.

We don’t consider regulatory filings or rating systems sufficient to understand a company’s commitment to sustainability. We want to uncover the business realities—and the Environmental, Social, and Governance realities—that no screen or checklist can fully provide.

Our research process, led by our Investment Team, hinges on human insight.

We speak to customers, suppliers, competitors, partners, and employees.

We ask questions, do face-to-face meetings, and look people in the eye.

We are thorough and patient.

We have an unwavering appreciation for the ability to uncover what’s true through the collection of multiple perspectives within a company’s sphere of relevance. To us, this work is essential to responsible investing.

And, because we believe responsible investing is an engine to further human flourishing, we think it’s only appropriate that the process for selecting responsible investments is also fundamentally human.

We analyze each company for our five investment disciplines.

We believe a responsible investment is a compelling business investment.

1
Sound Culture & Management

Markers of a responsible investment

Markers of a compelling business investment

A healthy culture that values employees with development opportunities, competitive compensation, and strong communication of mission

Top talent is attracted and retained, enhancing the company’s offerings

A high value on diversity

A culture of constant improvement, aiming to get 1% better every day

Diverse thought is taken into consideration, allowing the company to improve.

Company is able to pivot and change with their customers

2
Strong Unit Growth

Markers of a responsible investment

Markers of a compelling business investment

High levels of customer intimacy demonstrates a focus on the changing needs of the customer

Customer retention and new customer acquisition enables strong unit growth and allows for more predictable business conditions

3
Strategic Market Position

Markers of a responsible investment

Markers of a compelling business investment

Expertise and deep understanding of industry challenges empowers company to solve its customers’ largest pain points

Does not need to predict where the market is going because its customers trust them enough to inform them

Focus on discovering and resolving inefficiencies in customer’s workflows

Business is less easily displaced

4
Internally Financed Growth

Markers of a responsible investment

Markers of a compelling business investment

Avoids taking short cuts and disincentives unethical behavior

Allows company to focus and execute on long-term strategy vs. external factors and near-term challenges

Encourages “conservative” business practices and rational decision-making regarding resource use and talent

Company is not reliant upon external financing to sustain its growth across the business cycle

5
Conservative Accounting

Markers of a responsible investment

Markers of a compelling business investment

Management exercises responsible governance – they do not cut corners for the sake of external perception

Earnings are not overinflated – investors can be confident in the information management is conveying

Commitment to long-term value build vs. short-term earnings maximization

Transparent representation of company progress

Peer review process

Our peer review process looks at a company from multiple perspectives.

This starts with company management and then extends to extensive conversations with those both inside and outside the company who know it best.

industry engagement

At a firmwide level, we actively seek out opportunities to engage in industry discussions.

We look forward to continuing to contribute and learn from others in this space.