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May 27, 2017 / 7:01 pm EDT
 
 

Finance

Parnassus Investments
 
Parnassus InvestmentsJan 7, 2015
Principled Investing
 
 

Knowing who to trust with your money can be a difficult choice. There’s never any guarantee when you’re investing. However, some companies make a point of ensuring that all their investments not only have good returns but are ethical as well.

Parnassus Investments, based in San Francisco, is a forerunner in ethical investments. Parnassus is an independent employee owned company, and has several safeguards in place to ensure that the investments they make don’t have any cause for concern.

Parnassus judges whether or not an investment is ethical based on environmental, social and governance factors. While all members of the team consider these factors, three of those members focus exclusively on these elements.

They consider the business ethics of the corporation, what kinds of benefits they give their employees, and the corporate culture of the company. They also look into stakeholder relations, as well the company’s product, their customers and where their supplies come from.

Parnassus Investments carefully assesses the environmental impact of corporations they are considering investing in. By assessing these ESG (environmental, social and governance) factors, they are able to see certain risks or opportunities other investment firms may not. It also gives them the ability to ensure that any investments they make are with responsible companies that have ethical business practices.

They also have a strict ban on companies with certain business practices. For example, they do not invest in companies that manufacture alcohol or tobacco products, have any involvement whatsoever with gambling, or generate electricity using nuclear power. They also do not deal with companies that manufacture weapons or (as of 2006) companies that do business with Sudan, due to the genocide in Darfur.

This screening process has been in place in the firm’s inception in 1984. This shows Parnassus Investments have been careful about the impact their investments may make from the beginning. The monetary gain will never be worth more than their integrity.

What Parnassus aims to do is find good companies with good products or services, and good work ethics that have been temporarily undervalued by the market. They invest at a good price and when the company’s value goes up your investment gives a good return.

Not only does Parnassus make solid investment decisions, as well as having high standards and good business ethics, they also invest with community development related financial institutions. These institutions offer financial services to individuals and companies that make a point to give back to lower income communities.

MicroVest is one of these CDFIs that Parnassus invests in. Based in Washington D.C., MicroVest helps entrepreneurs by funding microfinance institutions in up-and-coming markets. It was founded by three non-profit organizations that have a solid, excellent background in microfinance.

Parnassus also invests in Community Bank of the Bay. CBB is a community bank, with locations in Oakland, Danville and San Jose, California. CBB services small businesses and non-profit organizations, as well as various professional service firms. Community Bank of the Bay is laser-focused on improving the local economy as well as the quality of life in the East and South Bay.

The Latino Community Credit Union in Durham, North Carolina also benefits from an investment by Parnassus. They are a member-owned, non-profit financial institution. They service the Latino community in North Carolina by using Spanish, as well as English, in their dealings as well as making available optimum credit options, and even financial education.

Yet another company with backing from Parnassus is Root Capital. Root Capital makes financing reachable for rural startups in Latin America, South America and Africa, provided that those businesses boost the local economy and protect the environment. Root Capital is capable of investing in places with less than stable economies because they require the borrower to have a solid relationship with green market purchasers, which minimizes the risk of not getting repaid.

It’s clear that Parnassus Investments is committed to not only making sure your investments have good returns, but in being responsible with those investments by using only ethical companies and being socially conscious when choosing what to invest in. They support companies that “do good” in their communities and make a difference in their local economies. When you are considering where to make your next financial investment, Parnassus Investments is a good place to go if you want to be sure your money only does good in the world.


 
 
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