Parnassus Investments follows a responsible investment approach to understand the full impact of a company. We carefully consider a company's environmental, social and governance (ESG) factors. By incorporating ESG factors into our fundamental investment-process, we believe we can identify risks and opportunities that the market may have ignored, and identify responsible companies.
The responsible investment process begins by applying exclusionary screens to the list of investment ideas approved by a portfolio manager for due diligence. The screens eliminate companies (or agencies, as applicable to the Fixed Income Fund) that derive significant revenue from the manufacture of alcohol, tobacco or weapons, or have significant involvement with nuclear power, gambling or Sudan. From this investable universe the investment team then begins its fundamental analysis.
The next step in the responsible investment process is for a company to undergo a proprietary ESG evaluation. ESG research is fully integrated into the investment process such that both fundamental and ESG research analysts are able to identify and address company-specific ESG issues.