Cliff: What has been your focus on Corporate engagement / proxy voting this year? Where were the successes and what companies are you still in discussions with?
Marian: This year, our corporate engagement and proxy voting efforts have focused on driving tangible improvements across five key themes where we see both material risk and opportunity: climate & water risk, chemical safety, responsible AI, sustainable workplaces, and governance.
Our Climate & Water Risk engagements aim to prepare companies for climate change risks and opportunities, pushing for science-based emissions targets, robust climate transition plans, and effective water stewardship to ensure resilience in a changing environment.
For Chemical Safety, we emphasize strengthening risk oversight, improving transparency through chemical inventories, and transitioning to safer alternatives to protect human health and mitigate regulatory and reputational risks.
In Responsible AI, our focus is on ensuring accuracy and privacy, mitigating biases, and establishing clear governance structures to manage ethical and legal risks for companies to develop, sell and deploy AI systems responsibly.
Our Sustainable Workplaces efforts concentrate on creating safe, high-performing environments that enable companies to attract, retain, and engage talent. We focus on strong labor practices, competitive benefits, and rigorous health and safety standards — key drivers of productivity, operational efficiency, and long-term value creation.
Finally, our Governance work, including proxy voting, reinforces independent oversight, transparency, and strong shareholder protections. We push for strong, independent boards, executive compensation aligned with long-term performance, and ethical leadership across all operations. These efforts drive corporate accountability and enhance sustainability performance across companies in our portfolios, demonstrating the impact of persistent, well-informed engagement on material issues.
Cliff: Several years ago, Parnassus Investments removed its screens for investments in Nuclear Power. Though controversial at the time, the world has been embracing it more as part of the clean energy mix. Can you say more about this?
Marian: Indeed, this evolution reflects our belief that sustainable investing requires us to dynamically adapt to new information, the latest data and global challenges and opportunities. We aim to focus on solutions that create long-term value responsibly.
We made a principled and pragmatic decision to remove a prohibition on investments related to nuclear power after re-evaluating the long-term safety record and the role of nuclear power as essential for a stable, low-carbon grid alongside renewables.
Many climate scientists and policymakers now recognize its necessity for meeting ambitious climate targets in an era of rising energy demand. We acknowledge that historical concerns about safety and waste persist, and we’ve reconciled the risks with the opportunities as the risks have been reduced.
Our decision isn’t a blanket endorsement. We seek companies committed to the highest operational standards and we will continue to rigorously analyze the companies in this industry — scrutinizing their safety protocols, waste management, regulatory compliance, and overall governance.
Cliff: Can you give our readers some clarity on your approach to investments in Natural Gas?
Marian: We recognize natural gas can play a role as a transition fuel, but we assess each utility on its specific risks, opportunities, and alignment with a lower-carbon future. We look for companies whose gas operations are a (hopefully diminishing) part of a credible climate strategy. Key indicators we evaluate include science-based targets, robust methane management, and clearly defined transition plans. We also value operational excellence, strong governance, and transparent climate reporting, such as Task Force on Climate-Related Financial Disclosures | TCFD) disclosures.
Cliff: Finally, what do you see ahead in the coming year for sustainable investors and what should they be paying attention to?
Marian: As we navigate the rest of 2025, sustainable investors should keenly observe several interconnected shifts impacting long-term value creation.
1. Deregulation risks and corporate standards: The deregulation landscape presents both opportunities and risks. While some regulatory rollbacks might reduce compliance costs and foster innovation in the short term, a “sugar rush” mentality prioritizing immediate gains could lead to significant long-term vulnerabilities. We are closely monitoring how companies respond to these changes, seeking those that maintain high standards in workplace quality, environmental stewardship, product responsibility, and ethical governance, regardless of the regulatory environment. Our focus remains on identifying businesses that view sustainable practices as a strategic advantage, building resilience against potential future legal liabilities, reputational damage, and regulatory “whiplash.”
2. The potential erosion of governance premium: The additional value that investors are willing to pay for companies with strong corporate governance practices compared to those with weaker governance structures is known as the governance premium—and it’s under pressure. The governance premium in U.S. markets is under pressure. Eroding regulatory safeguards, including curtailed SEC enforcement and weakened shareholder rights, threaten the transparency and accountability that have long underpinned investor trust. The shifting legal landscape, with states offering more management-friendly environments, further complicates the ability of shareholders to assert their rights. We believe that disciplined investment research, thoughtful proxy voting, and direct engagement are more critical than ever to identify companies that prioritize independent oversight, transparency, legal and regulatory stability, and robust shareholder rights.
3. The rise of AI, its risks and opportunities: Finally, the rapid advancements in Artificial Intelligence (AI) warrant careful attention. While AI promises innovation and efficiency, it also carries risks such as the spread of misinformation, bias, privacy violations, and even physical safety issues. We will advocate for portfolio companies to manage AI-related risks, integrate principles of safety, non-bias, privacy, and accuracy throughout product lifecycles, and establish clear AI governance. That said, we believe AI will have transformative abilities that will enable companies to become better, stronger and more sustainable in the long run.
At Parnassus, we remain committed to stewarding capital with conviction. That means strong governance and a proactive approach to sustainability are not barriers to performance, but rather foundations for enduring value.
More About Marian:
Marian Macindoe is a managing director, responsible for oversight of the firm’s sustainable investment approach, corporate engagement efforts and proxy voting at Parnassus Investments. She is chair of the firm’s Proxy Voting Committee. Prior to joining Parnassus Investments in 2022, Marian was head of ESG strategy and engagement at Uber Technologies. She functioned as the director of investment stewardship at Charles Schwab and before that as an analyst and advisor for Chevron on ESG concerns. Marian was also the first director of ESG research at Glass, Lewis & Company. Marian received her bachelor’s degree in international and comparative policy studies (economics) from Reed College and her master’s degree in regional and urban planning from the London School of Economics. Marian serves on the board of First Place for Youth, a nonprofit that supports youth transitioning out of foster care in Oakland, California. Marian is also a member of the Corporate Governance Advisory Council for the Council of Institutional Investors (CII) and an advisory board member to the ESG and Law Institute.
Footnotes:
1 Jefferies Research Services, LLC, The 2025 Great Placed to Work For All Summit, April 14 th 2025
2 The Science Based Targets initiative defines a science-based target as follows: Emissions reductions targets adopted by companies to reduce GHG emissions are considered “science-based” if they are in line with the level of decarbonization required to keep global temperature increase below 2°C compared to pre-industrial temperatures, as described by the Intergovernmental Panel on Climate Change (IPCC).
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) GUIDELINES: The Fund evaluates ESG factors as part of the investment decision-making process, considering a range of impacts they may have on future revenues, expenses, assets, liabilities and overall risk. The Fund also utilizes active ownership to encourage more sustainable business policies and practices and greater ESG transparency. Active ownership strategies include proxy voting, dialogue with company management and sponsorship of shareholder resolutions, and public policy advocacy. There is no guarantee that the ESG strategy will be successful. There are no assurances the Funds will meet their investment objectives and or that their ESG strategies will be successful.
Mutual fund investing involves risk, and loss of principal is possible. For the current holdings of the Parnassus Core Equity Fund, the Parnassus Growth Equity Fund, the Parnassus Value Equity Fund, the Parnassus Mid Cap Fund, the Parnassus Mid Cap Growth Fund, the Parnassus Core Select ETF, the Parnassus International Equity Fund, and the Parnassus Value Select ETF, please visit each fund’s individual holdings page. Fund holdings are subject to change at any time.
©2025 Parnassus Investments, LLC. PARNASSUS, PARNASSUS INVESTMENTS and PARNASSUS FUNDS are federally registered trademarks of Parnassus Investments, LLC. The Parnassus Funds are distributed by Parnassus Funds Distributor, LLC.
Before investing, an investor should carefully consider the investment objectives, risks, charges and expenses of a fund and should carefully read the prospectus or summary prospectus, which contain this and other information. The prospectus or summary prospectus can be found on the website, https://www.parnassus.com , or by calling (800) 999-3505 for a mutual fund prospectus or (855) 514-4443 for an ETF prospectus.
