Pax World’s Key Issues Briefs prepared by our Sustainability Research Team outline the qualities we look for in companies’ environmental, social and governance practices to help guide our investment choices.
Our criteria for the environment include such issues as air and water emissions, recycling and waste reduction, use of clean and renewable energy, climate change initiatives, and other policies and practices focused on attaining and promoting environmental sustainability. Generally, we favor companies with comprehensive environmental policies, practices, and performance, those with good environmental performance within their respective industries and those that are working to achieve environmental sustainability. We seek to avoid companies with inadequate environmental policies, management systems, performance and reporting.
Environmental Issues Briefs include:
Our social criteria examine companies from three different perspectives – workplace issues, product integrity and community involvement.
Our workplace criteria include such issues as diversity, or equal opportunity based on gender, race, religion, age, disability or sexual orientation; gender empowerment; workplace practices; workplace health and safety; employee relations; vendor standards; and human rights. We look for companies that encourage and foster diversity in the workplace, that offer transparency around policies and programs and that report on diversity performance. We favor companies that treat their employees well and have good labor and employee relations. We also favor companies that have positive health and safety policies and procedures in place.
Our product safety and integrity criteria cover such issues as product health and safety (including public health issues associated with product abuse and addiction), animal welfare, consumer issues and emerging technology issues.
Our community criteria include companies’ commitment to and relationships with the communities in which they do business (including their commitment to sustainable development abroad and indigenous peoples’ welfare), philanthropic activities, and in the case of financial institutions, responsible lending practices. We favor companies that foster strong stakeholder relations and demonstrate a commitment to the quality of life in the communities in which they operate. We seek to avoid companies that show disregard for, or are in conflict with stakeholder constituencies or the communities where they do business.
Social Issues Briefs include:
- Gender Equality and Women's Empowerment
- Human Rights
- Indigenous Peoples' Welfare
- Labor Relations
- Product Safety and Integrity
- Workplace Health and Safety
Our governance criteria include such issues as executive compensation, board structures, actions and charters and the protection they afford to the interests of both shareholders and stakeholders. Pax seeks to invest in companies whose governance is best suited to the creation of long-term value. In addition to examining governance structures, we also include protection of intellectual property, avoidance of bribery and corruption, measures to assure compliance with antitrust statutes and balanced and transparent management of any political contributions.
Learn more by reading Tone Deaf: Executive Compensation and the Economy by Julie Gorte, Pax World Senior Vice President for Sustainable Investing
Pax World Mutual Funds seek to invest in companies with sustainable business models. As part of our investing process, our Sustainability Research team, led by Dr. Julie Gorte, Senior Vice President for Sustainable Investing, rigorously evaluates companies’ performance relative to Environmental, Social and Governance (ESG) standards. This series of reports issued by that department examines, from a sustainability perspective, timely topics that can affect investment performance.
- Water Issues
- Occupational Health & Safety
- Energy and the Management of Risk
- Cloud Computing & Energy
- Climate Change and the Insurance Industry
- Fossil Fuels
The issues highlighted above are illustrative and do not necessarily reflect the full range of the social, environmental or governance criteria Pax World may apply in analyzing a particular security for investment. The availability of information about a company, issues associated with a particular industry, changing social conditions or other circumstances may affect the manner in which Pax World’s sustainability criteria are applied in a particular situation.
Companies in which our Funds invest do not necessarily meet exemplary standards in all areas of Pax World’s environmental, social and governance criteria, nor, we recognize, is any company perfect when it comes to corporate responsibility or sustainability. At Pax World, we nonetheless believe that our shareholders seek to invest in companies that adhere to positive standards of corporate responsibility. Our environmental, social and corporate governance criteria are designed to assist us in identifying those investments. We also believe that well-managed companies that maintain good relations with employees, consumers, communities, and the natural environment, and that strive to improve in those areas, will in the long run better serve investors as well.