Type: Aligned Investments
Topic: Agriculture, Energy Efficiency
Status: Current
Parnassus, a public equity manager, believes that companies can increase profitability—and wealth for investors in the long term—when they engage in robust environmental, social, and governance (ESG) practices. The Parnassus team conducts a comprehensive analysis of every potential holding to ensure high social impact and financial return standards.
Investment
$90 million; originated in 2020
Rationale
Parnassus has refined its integrated ESG and investment analysis model over 30 years. As the largest ESG mutual fund in the United States, it can exercise influence on companies it owns with research-backed engagement.
An example of impactful dialogue occurred with Mondelez, producer of staple snacks like Oreo cookies and Ritz crackers. Parnassus joined other investors in pressuring Mondelez to address its poor record of package waste. Responding to shareholder resolutions and intense media scrutiny, Mondelez pledged to ensure paper packaging was sustainably sourced and recyclable by 2025.
Benchmark
S&P 500
Returns
Consistently above benchmark since inception.
Lessons Learned
McKnight selected Parnassus after evaluating two other managers with similar risk-return profiles. Parnassus’s deep integration of ESG and its record on supporting social and environmental shareholder resolutions tipped the scale in its favor.
Photo Credit: Dino Reichmuth on Unsplash.
Disclaimer of Endorsement: The McKnight Foundation does not endorse or recommend any commercial products, processes, or service providers.
Last updated 10/2021