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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:

The Hanover Insurance Group, Inc. (THG)

Hanover Insurance offers property and casualty insurance products including personal lines, commercial lines and other property casualty through independent agents.

Hanover has identified climate change and an increase in severe weather events as significant risk factors for its business. To address this, the group considers climate-related risk as part of its enterprise-wide risk management framework, which is overseen by its catastrophe risk committee, comprised of senior executives. Hanover states that it continuously monitors and models environmental catastrophe risk, including conducting sensitivity testing to assess the impact of climate change on its exposure.

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, Watts Water Technologies 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.

WESCO International Inc. (WES)

WESCO offers lighting efficiency, energy management, renewable energy, water and waste mitigation, and green procurement solutions to its clients.

The company offers a range of products and services with sustainability certifications, such as ENERGY STAR, GreenSeal and EcoLogo.

WESCO reported that it has completed more than 250 lighting retrofits that are designed to save 1.2 million kilowatt hours and avoid 1,200 U.S. tons of greenhouse gases annually.

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 03/31/2019)

Holdings are subject to change.
PAX008546