ENGAGEMENT CASE STUDY
Water Company Seeks Clarity
Background: Evoqua Water Technologies (“Evoqua”) is a leader in water treatment equipment and services. Historically under private ownership, it emerged as a public company in 2017 and became increasingly interested in improving disclosure and performance on ESG issues. With a relationship since the IPO and as shareholders since 2020, we noted specifically that it lacked ESG or impact reporting and had no targets to reduce its environmental impact. Additionally, Evoqua did not disclose diversity statistics in its public reporting. Scope and Process: We began engaging with Evoqua in 2020, with discussions becoming more frequent over the course of 2021, as its executives and sustainability team explored options for setting environmental impact targets. The company came to us with various proposals that, while headed in the right direction, were short of what we considered industry best practices. We encouraged them to go further by introducing Science Based Targets (SBT) for emission reductions and water conservation. We also stressed the importance of increasing transparency on diversity, equity and inclusion. As part of this, we asked for additional disclosure on gender and minority representation within the company’s workforce and senior leadership. Outcome and Outlook: In April 2021, Evoqua disclosed diversity statistics in its global workforce and senior leadership as well as minority and veteran representation in its U.S. workforce. The company also announced diversity initiatives including a diversity-focused referral program, a diverse supplier program and shared that it would ensure diverse interview panels when hiring senior leadership. In November 2021, the company announced goals for achieving net-zero emissions by 2050, supported in the interim with a commitment to set SBTs by 2023 and a goal for 2035 to recycle and reuse more water than is withdrawn by company operations. Going further, Evoqua incorporated these targets, along with safety targets, into its employee compensation program for 2022. We continue our partnership with Evoqua on ESG best practices in the supply chain and potential impact targets around water treated or conserved for customers through its products and services.
ISSUE Enhancing Disclosures and Measuring Progress
CATEGORY Environmental and Social
STRATEGY U.S. Equity Impact
SECTOR Industrials
HANK ELDER Vice President, ESG Investing
44 2021 ESG ANNUAL REPORT
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