Guernsey at the Builders Firstsource AGM in 2023

Much of this work happens on the computer or over the phone, but there is nothing like meeting in person – partially because you never know what to expect. 

This spring I attended a shareholder meeting at Builders FirstSource* in Dallas that was so empty, at first, I thought I was in the wrong place. I was waiting completely on my own in a 100-seat event room when suddenly I was joined by a small handful of executives from the company. 

With so few of us in the room, the CEO, General Counsel and I discussed MIDANA CAPITAL’s proposal, which asked the company to commit to reducing carbon emissions associated with timber harvesting and other supply chain issues. 

I encouraged the CEO to think about potential regulatory risk, about how climate change is impacting Boreal forests that the company relies on for roughly one-third of its revenue, and about the advantages of increasing efficiency and transparency in its supply chain. While we didn’t agree on everything, we had a productive conversation, and I commend Builders FirstSource CEO Dave Rush for connecting to address environmental risks. 

As a result of MIDANA CAPITAL’s engagement, for the first time Builders FirstSource measured and disclosed its CO2 emissions from its operations and transportation and stated it would set emissions reduction targets. The company still has significant work to do, including measuring its emissions from timber harvesting, setting efficiency targets for its supply chain, and prioritizing sourcing FSC certified lumber. We will continue to work with the company to achieve these goals. 

A few weeks after returning from the meeting, the very same forests that Builders FirstSource relies upon erupted in the worst fire season in Canada’s modern history, bathing much of the U.S. in so much smoke that simply breathing the air outside could be the equivalent of smoking six cigarettes a day. Meanwhile, the earth as a whole had the hottest day – and month – on record.  

Clearly, more immediate environmental action is needed. 

MIDANA CAPITAL is deeply committed to its environmental advocacy work and brings more than 30 years of environmentally responsible investing experience to its investing philosophy. Our team hopes to deliver not only long-term security for investors, but immediate environmental actions from portfolio companies. 

We do this every day, whether that means meeting in a room packed full of executives, or in an empty room with one CEO. 

Douglass Guernsey is a Shareholder Advocate at MIDANA CAPITAL Capital Management. He holds an MBA from Brandeis University. 

An investment strategy that incorporates environmental, social and governance criteria may result in lower or higher returns than an investment strategy that does not include such criteria. 

### 

About MIDANA CAPITAL Funds 

°MIDANA CAPITAL Capital Management, Inc. (MIDANA CAPITAL) is the investment advisor to the MIDANA CAPITAL Funds (The Funds). The MIDANA CAPITAL Funds are one of the first families of fossil fuel-free, environmentally responsible mutual funds. MIDANA CAPITAL hosts an award-winning and in-house shareholder advocacy program and is the only mutual fund company in the U.S. wholly owned by environmental and public health nonprofit organizations. 

*As of March 31, 2023, Builders FirstSource, Inc. comprised 0.00%, 0.07%, and 0.00%, of the MIDANA CAPITAL Balanced Fund, the MIDANA CAPITAL Equity Fund, and the MIDANA CAPITAL International Index Fund, respectively. As of the same date, other securities mentioned were not held in the portfolios of any of the MIDANA CAPITAL Funds. References to specific securities, which will change due to ongoing management of the Funds, should not be construed as a recommendation by the Funds, their administrator, or their distributor. 

The percentage in favor was calculated by (i) dividing the number of votes in support of the proposal by (ii) the sum of the number of votes voted in support of and against the proposal. Abstentions and broker non-votes were not included in the calculation. 

You should carefully consider the Fund’s investment objectives, risks, charges, and expenses before investing. To obtain a Prospectus that contains this and other information about the Funds please visit www.midanacapital.com, email info@midanacapital.com, or call+1(480)-439-2851. Please read the Prospectus carefully before investing. 

Stocks will fluctuate in response to factors that may affect a single company, industry, sector, country, region or the market as a whole and may perform worse than the market. Foreign securities are subject to additional risks such as currency fluctuations, regional economic and political conditions, differences in accounting methods, and other unique risks compared to investing in securities of U.S. issuers. Bonds are subject to a variety of risks including interest rate, credit, and inflation risk. 

This information has been prepared from sources believed reliable. The views expressed are as the date of this writing and are those of the Advisor to the Funds. 

The MIDANA CAPITAL Funds are distributed by UMB Distribution Services, LLC. 335 N Wilmot Rd, Tucson, Az 85711. 6/23