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Pax Small Cap Fund Company Examples

Across all Pax World Funds, we fully integrate environmental, social and governance (ESG) factors into investment analysis and portfolio construction. The result, we believe, is an increased level of scrutiny that helps us construct investment portfolios made up of better-managed companies that are leaders in their industries, meet positive standards of corporate responsibility and are more focused on the long term.

Here are companies in the Pax Small Cap Fund that we believe are taking advantage of sustainability-related opportunities, or taking appropriate steps to address key ESG issues:

Comfort Systems USA, Inc. (FIX)

Comfort Systems provides heating, ventilation and air conditioning system installation, maintenance, repair and replacement services.

The company’s services, such as maintenance on, and replacement of, existing air systems with modern, energy-efficient systems, help to reduce a building’s energy costs, improve comfort within a designated area, and reduce greenhouse gas emissions.

Comfort Systems is an Energy Star® partner, a member of the United States Green Building Council and employs LEED®-accredited professionals.

The company also discloses information about its occupational health and safety programs. These include a focus on company-wide accident prevention that goes beyond OSHA compliance, including benchmarking and tracking of workplace safety and automobile accidents. Further, Comfort Systems integrates safety performance into executive compensation, demonstrating its commitment in this area.

Columbia Sportswear Co. (COLM)

Columbia Sportswear designs, manufactures, markets and distributes active outdoor footwear, apparel and equipment.

The company is well-positioned to benefit from the significant growth in consumer interest in healthier and more active lifestyles. Greater health awareness is driving demand for products and the company’s effective use of innovative materials produced using sustainable manufacturing practices is helping to reduce the impact on the environment.

Columbia Sportswear discloses a robust supply chain labor standard framework. The company’s Standards of Manufacturing Practice (SMP) address ethical sourcing and supply chain management. For example, all of the supply chain is 100 percent responsible down sourced, and in 2017, the company diverted 7,000 pounds of used clothing and footwear from the landfill through its ReThreads recycling program. In addition, the company is affiliated with the Fair Labor Association (FLA), and therefore verifies compliance to labor standards on its own as well as its suppliers’ operations.

Women comprise 36 percent of Columbia Sportswear’s board of directors. Gertrude Boyle serves as Chair of the Board.

Watts Water Technologies, Inc. (WTS)

As a company that manufactures and provides products designed to improve energy efficiency and reduce water consumption for its customers in both commercial and residential settings, Watts Water Technologies is well-positioned for the transition to a more sustainable economy.

For example, the company provides engineered rainwater-harvesting solutions, which contribute to LEED® green building certification. The company also conserves water at its sites by recycling chiller water used to cool hydraulic presses, and it has eliminated grass on premises in favor of drought-friendly plants.

Watts Water Technologies also works in partnership with the Planet Water Foundation to install water purification systems. Since 2016, the collaboration has brought clean water to 9,000 people in disadvantaged communities in China, Colombia, India, Indonesia, the Philippines and Puerto Rico.

We are encouraged by the progress of these companies as they make their operations more sustainable, but we recognize that more can be done. That’s why we engage with companies on sustainability issues and ask for information about policies, programs and performance data.

Pax Small Cap Fund Top 10 Holdings
(As of 09/30/2019)

Holdings are subject to change.
PAX008837