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A Smarter Way to Invest


By adding an increased level of scrutiny derived from robust ESG analysis, Pax World seeks to:


Building a More Complete Investment Picture


We believe ESG factors have long-term implications on a company’s financial performance. Evaluating how a company is meeting ESG challenges and opportunities provides us with additional insight into its culture, operational strength, and quality of management, all of which are material to a company's long-term financial prospects.

How exposed is the company to material ESG risks?

How can the company take advantage of ESG opportunities?


ESG Factors Impact Financial Performance


Pax’s ESG research framework centers on how sustainability impacts a company’s financial outcomes. Perspective from decades of sustainable investing allows us to identify which issues are materially linked to companies’ business results and stock prices. We assess key ESG issues for each sector, industry and sub-industry and weight ESG factors accordingly.

FACTORS
E
S
G

ENVIRONMENTAL
SOCIAL
GOVERNANCE
ISSUES
• Manage operational and reputation risks
• Increase revenues by capitalizing on opportunities created by climate change regulation, incentives, and customer demand
• Reduce risk of liabilities and regulatory penalties for pollution
• Manage reputational risk
• Drive innovation and increase productivity
• Improve competitive advantage by recruiting and retaining talented employees
• Drive innovation and improve competitive advantage by recruiting and retaining talented employees
• Manage reputational risk
• Minimize costs associated with product recalls and related litigation
• Minimize risk of operational disruptions due to community opposition
• Improve decision-making, oversight and financial performance
• Increase accountability to shareholders
• Reduce risk of regulatory penalties and reputational damage from substandard business practices
• Incentivize sustainable, long-term value creation
FINANCIAL IMPACT
 
 

ESG Factors Impact Financial Performance


Pax’s ESG research framework centers on how sustainability impacts a company’s financial outcomes. Perspective from decades of sustainable investing allows us to identify which issues are materially linked to companies’ business results and stock prices. We assess key ESG issues for each sector, industry and sub-industry and weight ESG factors accordingly.

ENVIROMENTAL

Climate

Financial Impact:

• Manage operational and reputation risks 
• Increase revenues by capitalizing on opportunities created by climate change regulation, incentives, and customer demand

Emisions & Waste

Financial Impact:

• Reduce risk of liabilities and regulatory penalties for pollution
• Manage reputational risk

Resource Efficiency

Financial Impact:

• Drive innovation and increase productivity
• Improve competitive advantage by recruiting and retaining talented employees

SOCIAL

Diversity, Human Capital & Safety

Financial Impact:

• Drive innovation and improve competitive advantage by recruiting and retaining talented employees

Product Integrity & Supply Chain Management

Financial Impact:

• Manage reputational risk
• Minimize costs associated with product recalls and related litigation

Community Relations

Financial Impact:

• Minimize risk of operational disruptions due to community opposition

GOVERNANCE

Board & Executive Diversity

Financial Impact:

• Improve decision-making, oversight and financial performance

Corporate Structure, Accounting & Transparency

Financial Impact:

• Increase accountability to shareholders
• Reduce risk of regulatory penalties and reputational damage from substandard business practices

Executive Compensation

Financial Impact:

• Incentivize sustainable, long-term value creation

 
 

How we use ESG Research


The Pax Sustainability Team collaborates with portfolio managers and analysts to incorporate ESG research into different elements of the investment process based on each fund's strategy.