ESG Portfolio Spotlight:
KBI Global Investors Aquarius Fund

ESG Portfolio Spotlight:<br/>KBI Global Investors Aquarius Fund

Westmount’s Environmental, Social and Governance (ESG) Portfolio allocates client assets 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: KBI Global Investors

One of the newest additions to our ESG portfolio is KBI Global Investors. KBI has been investing in water since 2000 and is recognized globally as one of the largest managers of water investments in the world. They take a ‘solutions provider’ approach, investing in water infrastructure, utility and technology companies that seek to address critical issues within the water theme. The team applies a rigorous ESG overlay to their analytical work and are active holders of their portfolio companies. Here’s a look at some of the companies KBI has invested in:

Corporate Transformation

With KBI’s help and engagement, Orbia has evolved from a chemicals and cables manufacturer in 2017 to a leading global drip irrigation company focused on addressing water scarcity issues and creating sustainable farming practices.

One example where Orbia is making a difference is in the area of irrigation. Historically, farmers, especially in the developing world, have employed a highly inefficient and wasteful irrigation method, called flood irrigation, to water crops. By contrast, Orbia supplies equipment that helps farmers transition to a more sustainable method, known as drip irrigation, to reduce water consumption and waste while increasing agricultural yield. The company also helps developing markets and smaller farms with unique solutions like irrigation-as-a-service and remote operation capabilities.

KBI has helped guide Orbia on this transformative journey and continues to engage with management on topics such as greenhouse gas emissions, water utilization, and waste reduction.

Increasing the Water Supply

One of KBI’s largest holdings is Veolia, a French utility company that provides a low-cost source of sustainable water through its re-use and recycling technologies. Veolia’s technology improves the quality and safety of used water sources and reduces the environmental damage caused by the release of untreated wastewater, of which only about 11% is recycled worldwide.1

Besides being one of the largest water utility companies in the world, Veolia is also a major player in the power space. KBI has engaged extensively with Veolia in recent years, pressuring the company to be more transparent about the role of coal in its energy production and revenue generating activities. KBI has also pushed Veolia to reduce its future coal use. In May 2020, the company committed to converting all its power-generating assets away from coal by. In September 2021, the company committed to the Science Based Target Initiative’s Business Ambition for 1.5C, with the goal of ‘net zero’ emissions by 2050.

Saving Battery Park

Stantec is another holding that is helping change the water space. This Canadian infrastructure engineering and consulting company designs and builds infrastructure to withstand the effects of future climate change.

One example is the $129 million Battery Coastal Resilience Project in Lower Manhattan. Battery Park City is a key hub in downtown New York City that currently sits at an elevation that will be completely submerged as sea levels rise. The project will rebuild and elevate The Battery wharf to protect the area from future flooding while preserving the park’s historic and cultural character.

Stantec is also one of the first and key beneficiaries of the water infrastructure spending stimulus that was enacted in the United States through the 2021 American Rescue Plan Act and Infrastructure Investment and Jobs acts, which both have significant provisions for water infrastructure spending.

KBI is actively engaging with Stantec to improve their reporting transparency, having encouraged the company to pledge to be carbon neutral by 2022 as a first step in achieving net zero operations across its entire global footprint by 2030. Because of these changes, Stantec has received an A- rating from the Carbon Disclosure Project (CDP) for the last three consecutive years.

Have a question 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
1https://www.sciencedaily.com/releases/2021/02/210208085457.html

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.