Pax World Mutual Funds

Impact Business Member

Pax World Management LLC is an investment management company that offers sustainable solutions, specifically mutual funds. By incorporating Environmental, Social and Governance (ESG) factors, the company provides strong long-term investment opportunities that address sustainability concerns.

As ESG implies, sustainability is not limited to the environment. Rather, it also includes broader benefits to society. For example, Social factors include human rights, health and safety, and diversity. Governance focuses on executive compensation, shareholder rights, and issues of corruption and bribery. Climate change and clean energy matter, of course, but as one part of a sustainable economy, not the only criteria.

The Pax World Balanced Fund (ticker: PAXWX) exemplifies this focus. Launched in 1971, the Balanced Fund was the first socially responsible investing (SRI) mutual fund ever created. It included “zero tolerance” social screens, which meant it would not invest in companies dealing in weapons, tobacco, alcohol or gambling. While those screens are no longer used, Pax World still requires companies to meet its thresholds for corporate responsibility before investing in them.

Pax World isn’t afraid to push back once they have invested. According to Pax World’s Sustainability Report, the firm filed or co-filed six shareholder resolutions in 2013, three of which - including one filed with Amazon dealing with data privacy – were withdrawn after agreements were reached with the companies.

Today, Pax World offers a number of investment opportunities - including one Index Fund, five other actively managed funds, and a group of asset allocation funds. All are constructed using sustainability factors, including – but not limited to - environmental impact.

Given that focus on sustainability, it was natural for Pax World to join ASBC. As Julie Gorte, Senior Vice President for Sustainable Investing at Pax World, explained, their involvement came from following ASBC co-founder Jeffrey Hollender’s work. Gorte said of ASBC, “The mission of it, which is to be in business as well as make the world more sustainable” was what ultimately inspired Pax to join.

Of course, as Gorte noted, sustainability has a different meaning depending on the issue in question. The most commonly used definition, centering on environmental sustainability, is only one criterion. Gorte mentioned fair treatment of workers throughout the supply chain and products safety as other examples. This broader view of sustainability is shared by Pax World and ASBC.

Most of Gorte’s work with ASBC has dealt with energy and environmental issues, including joining ASBC’s working groups on energy/environment and externalities. She has also worked extensively with ASBC’s Working Group on Women, formed to develop a gender lens behind many of our policies.

As Gorte explains it, sustainability matters to Pax World for the “same reasons it should matter to anyone – you should want to leave your children a world that gives them the same opportunities you had.” That means tackling the threat of climate change and moving to a clean energy economy.

And as Pax World shows, it’s not hard to promote sustainability and growth at the same time. On the contrary: They can go together quite naturally.