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Sustainability Framework

Grandeur Peak strives to achieve world-class standards across everything we do. This means we are continuously strengthening the frameworks that underlie all aspects of our work. Sustainability issues, which can include environmental and social justice, along with management oversight and transparency, can have a material effect on a company’s long-term financial performance and, therefore, are an important component of the quality ratings our research team assigns to all companies held in our funds. In order to continuously strengthen our understanding of these issues, our Sustainability Committee is on a perpetual fact-finding mission with scholars and experts around the world. Sustainability is a fundamental aspect of our analytical work at Grandeur Peak.

Stakeholder Justice

Our sustainability framework focuses on analyzing and influencing the extent to which our companies exercise stakeholder justice. We believe that the stakeholder justice profiles of our companies are financially material.

We Believe Sustainable Companies Exercise Stakeholder Justice

  • Companies have stakeholders beyond large shareholders (small shareholders and non-shareholders)
  • Some of these (non-large shareholder) groups have historically been marginalized and exploited
  • In our view, practices that marginalize and exploit stakeholders have long-term negative performance implications

Therefore, we believe companies with weak stakeholder justice profiles are unsustainable

Stakeholder Justice Profiles Are Material to Our Investment Strategy

  • The core objective of all Grandeur Peak Funds is long-term capital growth
  • We seek long-term capital growth by buying and holding what we believe to be best-in-class companies
  • Unsustainable companies are, in our opinion, not best-in-class companies that we can hold long term

Therefore, companies’ stakeholder justice profiles are material to our investment strategy

Stakeholder Justice Work Requires Our Focused Attention

Understanding and analyzing stakeholder justice deserves our focused attention, which we divide into standards of independent research, company engagement and universal treatment

  • Independence: Our own investment team leads 100% of our stakeholder justice work
  • Engagement: We strive to do deep dives, including impact work, with 100% of the companies in our portfolios
  • Universality: Our objective is to apply our stakeholder justice work to 100% of our funds

We approach sustainability issues in a spirit of sincerity. We believe that continuously working to strengthen the sustainability profiles of our funds is in our common interest as shareholders, as well as the right thing to do. And doing this in the right way requires hard work, consistent with our painstaking analytical framework. Our pledge to you, our fellow shareholders, is to continue engaging our sustainability framework on your behalf with earnestness and thoughtfulness.

The Grandeur Peak Team

Engagement Methodology

We strive to rate the stakeholder justice profiles of every company held in our funds. The analytical construct through which we execute this work is called our stakeholder justice chain.

Specifically, we examine the sequence of actions that a company performs and seek opportunities to ask company leaders how the company’s behavior:

INFLUENCES CLIMATE CHANGE AND BIOLOGICAL DIVERSITY

TOUCHES VOLUNTARY AND INVOLUNTARY COUNTERPARTIES

IS EXPOSED TO OVERSIGHT AND TRANSPARENCY

Our objective is twofold: rating accuracy and rating improvement

Based on our assessment of the materiality of company disclosures, which directly influence our view of the strength or weakness of a company’s candidacy for investment by our funds, we assign ratings and identify potential sources of both upward and downward rating migration. As active owners, we strive to share our observations with company leaders. In so doing, we hope that an effectively perpetual feedback loop will be set in motion, creating opportunities for us to strengthen the accuracy of our ratings and for company leaders to strengthen their respective stakeholder justice profiles.

Advisory Board

The analysis of stakeholder justice profiles in the course of our sustainability work frequently leads to conceptual complexity or conflicting considerations. We engage an independent board of scholars in these fields for this reason. These experts advise us on challenging cases and help us to resolve specific recurring complexities or conflicts.

Maximillian Auffhammer
Maximillian Auffhammer
Professor
UC Berkeley

Environmental Economics, Climate Change, Energy Economics

Stephen Gardiner
Stephen Gardiner
Professor
University of Washington

Ethical Theory, Political Philosophy and Environmental Ethics

Sangwon Suh
Sangwon Suh
Professor
UC Santa Barbara

Industrial Ecology, Climate Change Mitigation, Life Cycle Assessment

Global Coalition

Collaborating with people who we believe to be best-in-class asset managers around the world is an important part of our culture and process. One way that collaboration happens is common affiliation with progressive sustainable investment organizations. We are proud members of the following organizations, in the interest of strengthening shareholder justice.

Environmental & Social Impact at Grandeur Peak

Grandeur Peak offers financial support to all of its employees taking steps to decarbonize. At present, the firm offers employees an electric (EV) or hybrid electric vehicle (HEV) subsidy, as well as a comprehensive local public transportation benefit called the Hive Pass. The firm also currently subsidizes solar panels for employees’ residences.

We work to expand opportunities for women and minorities historically underrepresented in the financial services industry. Our outreach initiatives include scholarships at local universities, on-campus engagement and sponsoring networking opportunities for the local financial services industry.