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A fund that gives a damn about the workers

January 11, 2010

I recently found out about a fund which you may be surprised to know considers the workplace as its main investment theme. The fund is called The Parnassus Workplace Fund and it is owned by Parnassus family of funds. The Fund selectively invests into companies that treat their employees well and engaged in ethical practice both home and abroad.

Parnassus Workplace Fund | http://www.parnassus.com

The adviser uses  following criteria to discern which companies have good workplace practices, such as respect for  and fair treatment of employees, effective dialogues between managements and employees, equitable pay and benefits, family-friendly policies and support for volunteerism and charitable contributions to the community.

The Advisers sometimes may use the annual Fortune magazine survey, “The 100 best Companies to Work For”, the annual Working Mother magazine survey, “The 100 Best Companies for Working Mothers”, and the “Great Place to Work Institute” to select prospective companies for investment or sometimes may conduct their own research to identify companies that fit the description of a good workplace.

“Owning a stock is owning a company”- that is what Parnassus declares on its website. The Fund truly adheres to its principles.  One such example is that in the early 1990s Parnassus Fund observed that despite creating a good working atmosphere a maker of advanced computer system lacked diversity in its executive board. The Company had almost 20 people in the board but did not have any women or minority in it. The Fund offered active suggestion to the company on an ongoing basis which was a main catalyst for the firm’s decision in hiring its first woman in the executive board.

The Fund has cited another example of its respect for workers at the workplace in its website. This time it involves the International Labor Standards. A number of U.S. companies hire workers or contract manufacturers in foreign countries to develop their products. But historically these companies did not feel any obligation to define standards for the environment and wages for those workers abroad. They let the local rules dictate the labor policy which is not often an acceptable policy from the standpoint of international standards. Parnassus Fund noticed that one of its investments, a major retailing company, was buying substantially from foreign factories and was passive about the factories’ policies towards its workers. Parnassus Fund initiated a dialogue with that major retailer and advised them to take a more proactive approach to monitoring how their products were being produced. Today, the company has set the standard of responsibility of working with foreign manufacturers, including publicly disclosing their policies and the result of their work.

Parnassus Fund follows strict guidelines choosing its investments for other kinds of funds as well. In general, the Parnassus family of funds looks for companies that respect the environment and have a strong corporate governance policies and ethical business dealings. The Funds will not invest in companies that derive significant revenues from the manufacture of alcohol or tobacco products or from direct involvement with gambling. The funds do not invest in companies with significant revenues derived from manufacture of weapons or the generation of electricity from nuclear power. The Fund also avoids investment in companies that conduct unnecessary and inhumane animal testing. Parnassus Fund invests up to 2% of its assets into community development financial institutions (CDFIs) that offer credit, capital and financial services to individuals and organizations engaged in work that benefits low-income communities. You can obtain more information about this family of funds by going to www.parnassus.com.

-by Indira

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3 Comments leave one →
  1. Talia permalink
    January 11, 2010 1:53 pm

    Its very difficult as someone who doesn’t know anything about the stock market to make informed decisions about investments that will both make money and be ethical/sustainable/etc. When I asked the person who administers our office’s 401K for advice they basically told me they had no idea about anything that fit that description they only cared about making money. Its great to have some information on this so I can make some changes in my investments.

  2. Indira Banerjee permalink
    January 12, 2010 10:46 pm

    I am a bit surprised that the Fund Administrator does not know anything about Socially Responsible Investments (SRIs). They have been around for some time and are rapidly gaining demands.

    • talia permalink
      January 12, 2010 10:49 pm

      maybe “no idea” wasn’t the right thing to say, he knew what i meant, he just didn’t care. it was frustrating!

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