Investment Draft

TO:                Clark Hansen, CEO

FROM:          David Ju, Research and Development

SUBJECT:     Investment Proposal- JUST Water

DATE:           July 9, 2021

I've completed your research request and propose that our company invests in JUST Water. Below is a brief summary of our company's standards and how JUST Water satisfies them. 

AMDP Standards                                                                                                         

Triple Bottom Line

• Planet: Companies need to be conscious of the effect of their business practices on the environment. With climate change and resource scarcity being a growing concern, a successful company needs to avoid creating wasteful and harmful products. 
• People: Companies have an obligation to account for the well-being of all stakeholders and not only shareholders. Stakeholders can be the communities the company is operating in, the employees, the suppliers, and all those who are affected by the company's business. 
• Profit: Companies need to create value for those that invested their time and wealth. Companies also need to be financially stable to successfully continue their mission. 

Corporate Social Resposibility

Besides earning profits for shareholders, companies must responsibly engage in policies and practices that positively influence society. Companies who engage in corporate social responsibility will more likely gain the support of their consumers. For example, companies can give back to the community through charity and various other means that help those that are marginalized. 

Social Enterprise 

A social enterprise has social objectives as its primary purpose, such as raising awareness on alarming issues. It focuses on maximizing the benefits it can bring to society and the environment. A social enterprise can be profitable, but it is not their primary concern. 

Carbon Footprint

Carbon footprint is the amount of greenhouse gas caused by our actions, directly and indirectly. Carbon footprint is typically measured in tonnes of carbon dioxide, but it includes emissions of other similar gases, such as methane and nitrous oxide. Reducing carbon footprint is important because it causes many of the ongoing environmental issues, including climate change. 

Analysis of JUST Water

Overview

Although JUST goods, inc. was officially founded in 2012, its formation began a lot earlier. When 10-year-old Jaden Smith went surfing, he encountered a plastic water bottle floating next to him. Such a disturbing image prompted him to begin his activist career. His creation JUST Water aims to revolutionize the bottled water industry by using carton packaging, an alternative and greener solution to plastic bottles. Although the number of competitors is rising, JUST Water differentiates itself in every part of the process, from water sourcing to packing, to truly highlights its goal of helping the community and the environment. 

Planet

JUST Water's mission is to minimize carbon footprint. JUST Water sources its spring water from Glens Falls watershed. There is a huge difference between spring water and purified water. Purified water refers to water that has been repeatedly processed until the contaminants in the water are less than 10 parts per million. There are various methods that can be used to process the water, but all of them are expensive and wasteful. Spring water only requires a series of filtration before being packaged. 

Another eco-friendly aspect of JUST Water is its packaging. JUST Water cartons are 54% paperboard. Compared to plastic, paperboard uses renewable resources and does not cause CO2 emissions. Paperboard is also easily recyclable to produce products that are commonly used in everyday life. JUST Water admits that its carton packaging is nonbiodegradable but reemphasizes that its goal is to prevent the unnecessary manufacturing of new products to reduce greenhouse gas emissions. Also, the plastic that is part of the packaging is plant-based to further decrease emissions. Of all the plants, JUST Water decided to use sugarcane as the primary material because sugarcane is the most water-efficient plant and requires fewer energy resources because it grows densely. Moreover, being the plant sugarcane is, it captures CO2 from the atmosphere to grow. 

People

501CThree is a nonprofit organization that helps communities that don't have access to clean water, such as the residents of Flint, Michigan. It's important to consider the 501CThree as an extension of JUST Water because both organizations are founded by Smith with similar purposes. The actions of 501CThree can potentially influence the perception and success of JUST Water. 501CThree mainly built upon the goals and methods of Trinity Missionary Baptist Church in Flint by introducing The Water Box. The Water Box uses the local water supply and runs it through several filters, and it can produce 10 gallons of clean water in one minute, allowing the resident of Flint to no longer rely on dishonest authorities. The Water Box is also featured in Dupont's Brave Blue World, a documentary that invites several celebrities and experts, including Smith to discuss how technology and innovation can be used to combat the world's water crisis. 

JUST Water also does a phenomenal job raising awareness and promoting its cause through selective collaboration with other eco-friendly organizations. For example, JUST Water collaborated Umami Burger and Impossible Foods to produce the Impossible Trio meal (Umami). The goal was to show people an alternative vegan diet that is equally tasty but much less harmful to the environment. Also, $1 was donated to the American Red Cross hurricane relief efforts every time someone ordered the limited collaboration meal. Just Water also collaborated with Allbirds to produce a limited-edition shoe. All proceeds from the sale went toward the Amazon Forest Fund to support wildfire relief (Remi). By incorporating itself in many aspects of our everyday life, it may cause many people to rethink their lifestyles and decisions.

Profit

Financial data on JUST Water is limited. The SEC reports only show the stocks and securities offering in 2017 and 2018. However, the company is also valued at $100 million and has its products in 15,000 retail locations in America, and it plans to expand to the United Arab Emirates and Japan. Also, in a 2019 interview of JUST Water CEO Ira Laufer, she states that they "doubled [the] business last year . . . tripled the business this year, and are on track to almost triple it again next year" (Locker). 

Expert's views

One of the ongoing issues is the recycling rate of cartons. This is largely due to the lack of specialized equipment that can recycle cartons compared to plastic. Adele Peters, a former Sustainable Products and Solutions program worker at UC Berkeley, mentions that PET plastic is recycled at a higher rate compared to cartons: 29.2% to 16%. She also mentions that carton packaging reduces emissions by 50% compared to a new plastic bottle, but recycled plastic reduces emissions by 67%. She argues that the best solution is reusable bottles.  

Despite the criticism, JUST Water is a certified B-corporation. Its ethical and clean practices can be seen in its overall B-Impact score, which measures positive impacts on employees, community, and environment. The median B-Impact score for all businesses is 50.9 while JUST Water is 82.5. Moreover, in 2018 Best for the World Honoree List by B-Lab, JUST Water was in the Best for Environment category. 

Conclusion

Despite some of the criticism and flaws, I still think that JUST Water is a good investment. JUST Water is always improving its products and transparent with its consumers. For example, JUST Water stated on its website the lack of specialized equipment to sort out cartons and how they're constantly improving their product with their supplier Tetra Pak. I also think that JUST Water will give us access to their financial records if we express our interests and sincerity in investing and being part of their amazing journey.

Sources

https://www.fastcompany.com/90400006/jaden-smiths-ambitious-plan-to-provide-clean-water-in-flint-and-the-rest-of-america

https://www.fastcompany.com/90421638/boxed-water-isnt-the-environmental-solution-they-want-you-to-think-it-is

https://www.fastcompany.com/90398045/jaden-smiths-just-water-just-hit-100-million-valuation

https://bcorporation.net/directory/just-goods-inc

https://www.netflix.com/watch/81326710?trackId=13752289&tctx=0%2C0%2C9d46f70f2ffa6b0b6e6dbb51287efb31f2945b66%3A7b109afbcc6820edfae827d27b872f22acca41c1%2C9d46f70f2ffa6b0b6e6dbb51287efb31f2945b66%3A7b109afbcc6820edfae827d27b872f22acca41c1%2C%2C

https://sec.report/CIK/0001718270

Locker, M. (2019, September 4). Jaden Smith's Just Water just hit $100 million valuation. Fast Company. https://www.fastcompany.com/90398045/jaden-smiths-just-water-just-hit-100-million-valuation.

Remi Rosmarin. “Allbirds Collaborated with Just Water on Limited-Edition Shoes and 100% of the Proceeds Support Amazon Wildfire Relief.” Business Insider, US edition, Insider, Inc, 2019.

“Umami Burger x IMPOSSIBLE x Jaden Smith Launch Party: Changing the World - Three Sliders at a Time.” PR Newswire, PR Newswire Association LLC, 2017.