Impact Investing Influencers: Andrew Choi

US SIF — the Sustainable Investment Forum is a leading voice advancing sustainable investing across all asset classes. The forum says its mission is to rapidly shift investment practices toward sustainability, focusing on long-term investment and the generation of positive social and environmental impacts.

Its members represent $5 trillion in assets under management or advisement and include investment management and advisory firms, mutual fund companies, ​asset owners, data and research firms, financial planners and advisors, broker-dealers, banks, credit unions, community development financial institutions and nonprofit associations.

Equities.com caught up with influential members of US SIF at the organization’s recent Forum 2024 in Chicago.

Andrew Choi, Portfolio Manager, Parnassus Investments

Tell us a little about yourself and your work.

I’m a portfolio manager at Parnassus Investments. I help manage our Core Equity Fund, which is our large cap fund. I also manage our Large Cap Growth Equity Fund.

What are you most excited about in coming and attending the US SIF 2024 Forum?

This is my first time at the conference, and just from meeting a few folks so far, it seems like an incredible group of like-minded investors. It’s great to just hear what everyone’s thinking about. It seems like we’re all thinking about something similar. And then also it’s an interesting period of time where we’ve had increasing attention and scrutiny over ESG investing, and now we’re sort of like brass tacks getting back to work. That feels like it’s a good place to be.

We understand Parnassus  modified its process. Can you tell us about that change and why you made it?

It was a team decision that was, in many ways, a long time coming, and it’s just a more accurate reflection of how the team works and how we think. We moved from a world of having screens like a restricted list, and I think what that tended to communicate is that we would invest based strictly on rules. And we wanted to communicate that our portfolio managers and analysts were exercising judgment, and we recognize that the world is dynamic, and companies change, and not everything is black and white.

So now we have a caution list. It’s effectively the restricted list, minus a few areas where the burden of proof and the standards for diligence might just be higher.

You discussed the increased attention and scrutiny last year, and now that we’re largely past that, do you think that will have any lingering effects on the industry?

I tend to think about anything new in the financial system going through like, a very similar, similar life cycle, right? In this case, it was ESG, sustainable investment products. There’s a rampant uptick in adoption and selling of new products, and we went through a similar thing where we had a huge tailwind behind us. I think 2022 happened both because of the political climate and the energy performance, which put a spotlight on the asset class.

We view it only as a positive, because, you know, when the tide was rising, everyone sort of looked the same. But once you have scrutiny over your investment process, it starts to expose what’s real and what’s not, and allows us as an industry to get to a more productive area. An area where you have conversations that aren’t politicized and or polarized conversations around the terms that we use, but rather actually figuring out, like, what do we actually do? And how do we actually do it?

What are you most excited about looking ahead the next 6-12 months?

We’re clearly going through a period of change and improvement within the Sustainable Investment Industry. The way people talk about investing, whether it’s ESG considerations, sustainable investing, sustainable business practices, however you want to call it, that’s continuing to evolve and grow. Even internally at Parnassus, we’ve made a lot of improvement in terms of our investment process, something that we work on all the time, but also how we communicate internally, externally to each other about our investment process.

Check out all the Impact Investing Influencers.