US-based Praxis Mutual Funds' approach to achieving positive societal impact places a heavy emphasis on making its voice heard as a shareholder.
In the past year, this approach has borne fruit, and seen it involved in more than 20 shareholder advocacy initiatives:
- An engagement over several years with US electric utility Southern Company, resulting in a commitment to a net-zero carbon future.
- The instigation of a global Covid-19 Investor Statement on Coronavirus Response, through the Interfaith Center on Corporate Responsibility, calling on company leadership to uphold policies that care for employees, customers and suppliers in the face of the humanitarian crisis. The statement garnered support from institutions with more than $9 trillion in combined assets under management.
- Two years of dialogue with JPMorgan Chase, leading to a commitment to end its lending relationship with private prison companies. In the weeks following, all the largest US banks also committed to do the same, Praxis says.
Praxis, which is the mutual fund family of faith-based financial services organisation Everence and says its approach to impact investing is guided by faith values, was the first faith-based mutual fund to publicly disclose its proxy voting record in 2000, several years before it was required by law.
It also invests in the debt market with an intent to generate measurable, positive impact, through its $685 million Impact Bond Fund.
Over the past year, it has invested in the following impact bonds:
- An Apple green bond supporting renewable energy and green buildings;
- An investment in the African Development Bank's 'Fight Covid-19' social bond, which seeks to mitigate the social and economic impact of Covid-19 in Africa.
- The purchase of a Ford Foundation bond that supports its work promoting higher education for African Americans, and supporting gender, racial and ethnic justice.
Praxis also commits approximately 1% of each of its funds to "deep-impact" community development investments, which provide catalytic capital and economic opportunity for disadvantaged individuals and communities around the world. These investments help provide capital access, through nonprofit organizations, for individuals and projects that may have a harder time getting traditional funding, according to Praxis.
Examples include investments in the Forest Resilience Bond developed by the Blue Forest Conservation in partnership with the World Resources Institute, and in the nonprofit Medical Credit Fund, which supports private healthcare enterprises in Africa through loans.
Praxis Mutual Funds president, Chad Horning, said: "We believe it is important to deliver social and environmental impact, in as many forms as possible, along with consistent, competitive financial performance to the families and institutions who rely on us to help provide for their futures. It is our shared values and vision and the difference we can make together that provides the inspiration for our work."