ESG Portfolio Spotlight:
Second Quarter 2021

ESG Portfolio Spotlight: <br/>Second Quarter 2021

Westmount’s Environmental, Social and Governance (ESG) Portfolio allocates clients across a diverse selection of investment managers that directly support innovative companies driving positive social change. Westmount’s ESG managers are aligned with the United Nations Sustainable Development Goals, a globally recognized framework adopted by the U.N. General Assembly to collaboratively tackle humanity’s most pressing issues.

Portfolio Spotlight: International Small/Mid-Cap

The Calvert International Opportunities Fund invests primarily in non‑U.S., small‑ and mid‑cap stocks that exhibit high or improving returns on capital, strong free-cash-flow generation, and positive or inflective earnings, coupled with a disciplined ESG analysis.

The fund manager focuses on fundamental research, including responsible investing criteria, as well as valuation and quality criteria. Below, we describe some of that fund's holdings and share a few examples of activities they are engaged in that deliver an ESG impact.

Breaking Down Barriers in Music Education

Research has consistently shown that music education can help enhance cognitive development and social skills in children.1 However, barriers persist when it comes to delivering access to high-quality music education resources, primarily due to a lack of instructors, instruments, and other supporting infrastructure.2 As one of the companies held by the Calvert International Opportunities Fund, Yamaha seeks to clear these barriers by engaging in creative projects and other activities that promote interest in music and provide children with opportunities to play musical instruments. Since 1954, Yamaha has engaged with more than 6,000,000 elementary and secondary school students around the world about the joys of creating and appreciating music.3

These projects are often tailored to the regions they serve. For example, in the Middle East and Africa, Yamaha has focused its strategy on instructor training and music appreciation. The program launched at a single school in South Africa in 2016, and has since expanded to 77 schools in seven countries.4

Yamaha has also deployed similar programs in Central and South America. The company's AMIGO Project was launched in 2014 with the goal of educating students, teachers, and technicians about instrument maintenance and repair. In Brazil, a music instruction training program has helped train over 4,700 instructors who have gone on to teach more than 550,000 students since 2008.5

Elsewhere, the company has focused on musical performance by providing instruments, textbooks, and teaching materials to create a comprehensive educational environment in which students learn how to play an instrument. As of March 2020, this initiative has reached over 390,000 elementary and secondary school students in Malaysia, Indonesia, Russia, Vietnam, and India.6

Leading By Example on Climate Change and Sustainability

Recognized by Fast Company as one of the top socially responsible companies of 2021, Logitech has become a leader in sustainability among its peers.7 In 2019, the company publicly expressed its support for the Paris Agreement, an international treaty on climate, and pledged to achieve net zero carbon emissions by 2030.8 One year later, the company announced that its entire portfolio of gaming products—along with one of their manufacturing facilities in China—had been certified “CarbonNeutral” by the CarbonNeutral Protocol, an entity that provides guidelines for businesses to achieve carbon neutrality.9

Building on this success, Logitech has implemented numerous carbon-cutting programs in other arms of their business. Last year, the company rolled out a major update to their product and packaging design process to incorporate additional environmental criteria alongside other traditional product development goals. For example, over the last year, Logitech has replaced roughly half of all plastic components in its mouse clamshells with 30% post-consumer recycled plastic (PCR), replacing about 550 tons of material per year.10
By the end of 2021, Logitech projects that recycled plastic will be included in more than half of all mice and keyboards produced.11

Logitech has also taken steps to enhance its transparency around these initiatives. In 2020, the company launched a first-of-its-kind carbon transparency program to inform consumers about the carbon impact related to each purchase, similar to the calorie labels found on many food products.12

Improving Hearing Aid Access During and After COVID-19

Based in Milan, Italy, Amplifon is a global leader in hearing care, offering hearing products and services in 26 countries across five continents. Their mission – to improve quality of life for those experiencing hearing loss through tailored solutions – is taking on new urgency today, as more than 1.5 billion people around the globe suffer from some degree of hearing loss.13 Their work is particularly important to those of advanced age, for whom hearing loss has been associated with accelerated cognitive decline and higher risk of dementia and Alzheimer's disease.14

For many, these risks were exacerbated by the COVID-19 pandemic, as lockdowns created sizable barriers for those needing to repair or replace their hearing aids. In 2020, Amplifon partnered with the Italian Red Cross to provide free hearing aid kits to individuals 75 and older. On top of this partnership, Amplifon deployed home care programs in Milan and Rome to not only monitor and provide health services for the elderly, but also to help reduce social isolation resulting from the pandemic.

Another area of focus for Amplifon is raising awareness about hearing loss in children. According to the American Speech-Language-Hearing Association (ASHA), even mild hearing loss can contribute to communication difficulties and reduced academic performance.15 In response, Amplifon launched a widespread community education campaign in Italian schools to increase awareness of noise-induced hearing loss and methods of prevention. Coined the “Listen Responsibly” campaign, the program provides students across Italy with expert-led workshops and games about preventable hearing loss. Following the launch of the campaign in 2019, Listen Responsibly has enlisted more than 20,000 students across 800 Italian secondary schools to serve as “responsible listening ambassadors” promoting the importance of hearing health and wellness.16

Have questions about our ESG offering or investment platform? Call us at 310-556-2502 or email info@westmount.com to speak with an advisor today.

Sources

  • https://www.pbs.org/parents/thrive/the-benefits-of-music-education
  • https://www.yamaha.com/en/about/activities/school_project/
  • https://usa.yamaha.com/education/yms/index.html; https://www.yamaha-mf.or.jp/english/img_new/rwd/corporate_profile.pdf
  • https://www.yamaha.com/en/csr/download/pdf/sr_2020_en_07.pdf
  • Ibid.
  • Ibid.
  • https://www.fastcompany.com/90600166/corporate-social-responsibility-most-innovative-companies-2021
  • https://news.logitech.com/press-releases/news-details/2019/Logitech-Commits-to-Ambitious-15C-Climate-Pledge-and-100-Renewable-Electricity-Goal/default.aspx
  • https://www.carbonneutral.com/examples/logitech
  • https://www.logitech.com/content/dam/logitech/en/sustainability/pdf/resources/sustainability-report-2020-aw-09-single-page.pdf#page=40
  • https://news.logitech.com/press-releases/news-details/2020/Logitech-Increases-Use-of-Post-Consumer-Recycled-Plastic-At-Scale/default.aspx
  • https://www.logitech.com/en-us/sustainability/carbon-transparency.html
  • https://corporate.amplifon.com/en/sustainability/sustainability-reporting/dnf-2020
  • https://www.healthyhearing.com/report/52904-The-connection-between-hearing-loss-and-cognitive-decline
  • https://www.asha.org/public/hearing/effects-of-hearing-loss-on-development/
  • https://corporate.amplifon.com/en/sustainability/community-impact


Disclosures

This report was prepared by Westmount Asset Management, LLC (“Westmount”). Westmount is registered as an investment advisor with the U.S. Securities and Exchange Commission. The information contained in this report was prepared using sources that Westmount believes are reliable, but Westmount does not guarantee its accuracy. The information reflects subjective judgments, assumptions and Westmount’s opinion on the date made and may change without notice. Westmount undertakes no obligation to update this information. It is for information purposes only and should not be used or construed as investment, legal or tax advice, nor as an offer to sell or a solicitation of an offer to buy any security. No part of this report may be copied in any form, by any means, or redistributed, published, circulated or commercially exploited in any manner without Westmount’s prior written consent. If you have any comments or questions about this report, please contact us at info@westmount.com.