Atwater Capital believes unequivocally that humans have profound impacts on the planet: on both the natural environment, as well as upon our socially constructed cultures, beliefs, and how we organize and govern ourselves. We believe these Environmental, Social, and Governance (ESG) impacts become magnified when humans organize themselves into companies and institutions. Hence, our goal as investors is to enhance the positive and mitigate and minimize the negative consequences of our actions. This involves a mindset that considers all stakeholders, not just those who are directly economically represented; this involves a mindset that amplifies marginalized voices, whether that be in the representation of the general populace or of the natural environment.

Atwater is uniquely positioned as a fund that has invested in some of the leading music, film, and TV content creators around the globe. To date, 100% of Atwater’s invested capital has been into content projects or portfolio companies that do not produce physical goods as their primary revenue-generating activity. Due to this content creation process relying principally on intellectual and creative (versus physical) inputs, the risk and scope of environmental impact is low relative to other sectors. However, the potential social impact of our portfolio companies on popular culture is tremendous, and this is what Atwater chooses as a primary area of ESG focus.

Culture, and the digital media channels that amplify and drive it, are ever- and fast-evolving; hence, our ESG policies must adapt to this landscape. We continue to augment and refine our ESG policies, but they can broadly be categorized as follows:

• Exclusionary screens (for example pornography, gambling, and tobacco),

• Positive amplification (for example: democratizing the creation of, or access to, content and strengthening diversity in content creation), and

• Ongoing measurement and improvement (for example portfolio company performance assessment).

The first two initiatives above facilitate an optimal approach to portfolio company selection, the latter facilitates ongoing operational optimization.

While we exercise our influence as shareholders and board members of portfolio companies, we recognize that management alignment and support of our ESG practices and policies are key for effective implementation. As such, a key factor we consider in “positive amplification” is to back management teams who have a track record and history of good business practice and low controversy. In addition, we seek to invest in companies where the management team shows a willingness to embrace good ESG practices. Within this framework, we rely on building healthy and durable relationships with portfolio company managers, which in turn allows for open dialogue regarding the often fraught and uncomfortable topic of cultural impact.

Finally, we rely on the input of diverse thought leaders in shaping discussion regarding the cultural impact of Atwater’s portfolio companies. These leaders can speak credibly to differences in lived experiences and, hence, form a strong and necessary core for such dialogue.