Q2 2025
A Conversation with Raymond J. Burnell and Keith H. Dokho, Directors, Catholic Responsible Investments
The exploding demand for water has become mainstream news around the world lately. Hasn’t CBIS been engaging with companies in the water usage arena for some time?
Burnell: We identified the business use of water as an engagement priority around three years ago. Church teaching tells us that water is a source of life and an inalienable human right, and we as an asset manager know that water is vital to every company’s sustainability and profitability. In the end, water, even when used for profit, must be treated as a public and common good.
Do you recall CBIS’ first active ownership effort with a portfolio company on water risk issues?
Burnell: Interestingly enough, it was Domino’s Pizza. Most folks aren’t aware that it takes the company nearly 42 gallons of water to make a single slice of pizza. As co-lead on the engagement, we’ve made specific achievements in an effort to help the firm quantify water risks and prioritize risk mitigations. By the end of last year Domino’s Pizza reduced water consumption/discharge from high-risk areas.
We’d have to assume you’ve broadened the list of target companies.
Burnell: We’re engaging with five major companies across distinct industries on the stewardship of water – Domino’s and Molson Coors in food and beverage, Amazon and Microsoft in high tech, and one that might come as a bit of a surprise, Louis Vuitton in apparel. This cross-sector engagement strategy is deliberate and grounded in the belief that businesses with significant water footprints must take responsibility for its sustainable use. All of these portfolio holdings were among 72 companies identified by the Valuing Water Finance Initiatives as having high water footprints.
The volume of current and potential water engagements must be expanding. How’s the CBIS team keeping up?
Burnell: We were fortunate to welcome Keith Dokho to the I&J team recently. Among other things, Keith brings a long history of experience engaging with the corporate world on the water issue and its global impact.
Dokho: I’m excited about the opportunity to work with Ray and the team to help companies drive necessary improvements in water systems. Across my career I’ve seen up close how collaborating and partnering with companies can actually achieve meaningful social and environmental impact.
Are high-tech companies, particularly those operating data centers, garnering an increasing amount of CBIS’ attention?
Burnell: Absolutely. These data centers are among the top consumers of water globally. As co-leaders of the Amazon and Microsoft engagements, we’re targeting these companies’ massive and growing data infrastructure. Amazon Web Services, Amazon’s largest profit center, has constructed over 100 AI-enabled data centers while Microsoft is running around 350 around the world.
As a direct response to our engagement efforts, both firms have committed to becoming “water positive” by 2030, meaning they intend to replenish more water than they consume. Their strategies include improving discharge quality, reusing cooling water, sourcing sustainably, and investing in replenishment programs for local communities.
How serious is the water supply issue?
Dokho: According to the United Nations Environment Programme (UNEP), nearly half the global population will face severe water stress by 2030, when freshwater demand is projected to exceed supply by 40%. The diminishing availability of water, driven in part by industrial misuse, heightens its importance in corporate sustainability. I couldn’t agree more with the outsized effort CBIS is putting into the issue of water sustainability.
What is the overarching goal of your engagement work around the stewardship of water?
Burnell: We’re trying to advance a vision where corporate responsibility and water sustainability are inseparable. Collectively, our water engagement work not only aims to mitigate risk and enhance long-term shareholder value, but it also enhance the availability and quality of freshwater across the supply chain at the same time.
Important Information
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.
Q1 2025
A Conversation with CBIS Co-Chief Investment Officers Thomas Digenan, CFA, CPA, and John W. Geissinger, CFA
We understand the volume of work in your active ownership efforts is expanding. Is it because you’re engaging with more companies outside the U.S.?
Mr. Geissinger: It is. Which is why for the last two years or so we’ve been focusing on providing more structure and intentionality to our global engagement process. We’re articulating clearly up front why we’re talking with a company and what specific milestones the CRI Team is looking to achieve and can monitor and adapt the workflow to a specific end.
Mr. Digenan: The end result of that structure is we’re able to increase the number of engagements. We’ve become much more effective in engaging with a company around a theme and expanding our efforts to other companies that might have similar issues.
Along the way, we’ve become better collaborators with like-minded investors. With your growing number of global engagements, are you experiencing more overlap among CBIS’ three pillars of engagement?
Mr. Geissinger: I think of Pope Francis’s comment on integral ecology. Throughout Laudato Si, he says, “Everything is connected.” When you’re engaging in one area, there will be implications for all the others.
Can you give us an idea of the scope of your engagement efforts?
Mr. Digenan: We’re engaged with 19% in market cap of the MSCI All Country World Index. And we’re excluding close to another 12%. This means CBIS is either engaged with or excluding 31% of companies in this broad benchmark.
How do you determine which companies to engage?
Mr. Geissinger: Remember, we’re engaging with companies for financial reasons, and most businesses have some room for improvement. It’s our belief that engagements help mitigate risk for the company, which, in the end, helps shareholders around the world.
Mr. Digenan: And we have plenty to choose from because the CBIS lineup includes a couple of index portfolios. As it happens, if you look at our engagements by geography, we align very closely with the world equity markets.
Mr. Geissinger: In practice, we want to be engaged with at least four companies in each equity portfolio that we manage.
How do you identify and focus on your goal to engage at least four companies?
Mr. Geissinger: It goes back to my comment about structure and intentionality. The Charisms Council provides an external voice for our advocacy efforts. The Impact and Justice Steering Committee provides the focus on issues that are important to our investors and where we can make a difference. Then the CRI Team puts it all into action. That, in total, is how we can serve Catholic investors around the world.
When you look at engagement milestones, how do you monitor success?
Mr. Digenan: Engaging with a growing number of companies is a success in and of itself. But far more important than that is the number of milestones we’ve achieved in each engagement. The journey is an accumulation of a number of small steps.
Mr. Geissinger: Again, it’s about intentionality. Why are we talking to the company today, and what actions are we looking for them to pursue? And it’s that focus that’s enabling us to then track how we’re doing. And as we accomplish milestones, we can then continue to say, okay, now where do we go next?
Do you see any emerging issues or initiatives on the engagement horizon?
Mr. Digenan: Artificial Intelligence, ethical AI specifically, is something we wouldn’t have been talking about a few years ago. AI moves too fast for governments to regulate, so companies like CBIS are getting together and focusing on developing voluntary ethical AI principles. The hope is the industry will move forward in a positive manner without relying on government intervention.
Important Information
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.
Q4 2024
A Conversation with CBIS Co-Chief Investment Officers Thomas Digenan, CFA, CPA, and John W. Geissinger, CFA
With its publication of Mensuram Bonam, the Vatican presented a framework for practical, faith-based investing. Among the challenges was a call for investors to “engage, enhance, and exclude” in their efforts to align with a faith-based approach. Do you see any particular significance in the order in which these challenges were put forth in Mensuram Bonam?
Mr. Geissinger: I asked one of the writers on the Mensuram Bonam project that very question and his answer was a definitive yes. The call to “engage, enhance, and exclude” was consciously put in that order. You’ll recall that Pope Francis has for some time been calling for Catholics to be active, not passive, owners of companies.
Mr. Digenan: Don’t forget that for years many Catholic investors had the order backward by focusing their strategies on the exclusion, or screening, component. But when all we do is exclude, we have no ability to enhance society through engagement. By not investing in a company, you can never engage with it. You must have a seat at the table. Engagement is essentially an effort to put capital to work in a productive, socially responsible manner. For many Catholic investors, especially Catholic institutions, changing the world through engagement is their long-term ministry. Enhancement, meanwhile, is about investing in companies and bonds producing or generating something that’s having a positive impact on the world. Impact bonds are a great example. Lastly, then, is exclusion, which is avoiding companies whose business is antithetical to the Catholic value system, and and where we see no opportunity to change their business model.
The challenge seems overwhelming. How does an investor, especially an individual investor, even begin?
Mr. Geissinger: You’re right, it’s very difficult. Investing in a faith-consistent manner takes work, it takes thought, it takes discernment, it takes resources, and it takes intentionality. This is hardly a check-the-box exercise. It might be the real calling of Mensuram Bonam for Catholic investors around the world to lift the decision-making process to a much higher level.
To fully understand Mensuram Bonam, does an investor have to incorporate all three calls – to engage, to enhance, and to exclude?
Mr. Digenan: Mensuram Bonam is a journey, and different investors are on different paths along that journey. The farther along you are on the path, the more likely you’re doing all three. It’s a journey for all of us as investors to continue to discern, to continue to fight the good fight where we can and determine how we want to allocate resources and efforts.
Mr. Geissinger: Exclusions have been around for a while, and while they are and have been doing something important, Mensuram Bonam is calling for significantly more.
What do you say to a Catholic investor who understands the challenges of Mensuram Bonam and simply finds it too overwhelming?
Mr. Digenan: I think one of the beauties of Mensuram Bonam is that it’s not overwhelming. It realizes different investors are at different stages of the journey. It also calls for Catholic investors to unite. To the extent one doesn’t have the underlying resources or the expertise, there are networks and professionals who can manage the money. That’s a good first step in the journey.
Important Information
All material of opinion reflects the judgement of the Adviser at this time and are subject to change. This material is not intended as an offer or solicitation to buy, hold, or sell any financial instrument or investment advisory services.