Ethical Exclusions

Values-Based Company Selection

Sustainable investing is, by its very nature, selective. Performance is essential, but so is alignment with values.

The Church asks us to make a conscious effort to select and manage investments in accordance with the Social Principles. We exclude investments in companies earning significant revenues from gambling or from the manufacture, sale or distribution of alcoholic beverages, tobacco-related products, pornography, weapons, or the management or operation of prison facilities. We update our exclusions monthly and review our performance annually, and also perform proactive, in-depth analysis. Our analysis demonstrates that exclusions have little if any adverse impact on performance.

Because of this due diligence, we have established a record of selecting stocks that meet both our exclusions criteria and the performance goals of our investors.

2nd Quarter 2017

Holdings as of June 30, 2017 (PDF | Excel)
Companies Ineligible for Purchase as of June 30, 2017 (PDF | Excel)

Please Note: The ineligible companies list is not an exhaustive list of all companies in the investment universe that are considered ineligible for investment. Rather, it is a list of companies that have been considered for investment at some point in the past but have failed one or more Wespath exclusion. Please be aware that other companies not included on this list may be ineligible for purchase.


Ethical Exclusions Guidelines

Wespath Benefits and Investments shall endeavor to exclude from investment the securities of companies that produce products and/or provide services that are not aligned with United Methodist values as described in the Social Principles, ¶717 of The Book of Discipline 2012 and Resolution 4071 ("Investment Ethics") of The Book of Resolutions 2012 provided that to do so does not abrogate the Board’s fiduciary responsibility as described in ¶1504.14.

  1. The UMC Principles Committee will evaluate and approve Board ethical screening guidelines following each General Conference to ensure consistency with adopted Church positions.
  2. The Fiduciary Committee will receive and approve the UMC Principles Committee’s recommendation to amend the Statement of Administrative Investment Policy.
  3. Management shall identify and maintain a list of companies excluded from investment. The list shall be updated monthly and made available to all Board external asset managers on a password protected Wespath Benefits and Investments web site.
  4. Investments shall not knowingly be made in any company or entity whose core business activity involves the production and/or assembly, direct sale, distribution, and/or marketing of the following products and/or services:
        a. alcoholic beverages;
        b. cigarettes, cigars, chewing tobacco or smokeless tobacco;
        c. gaming or lottery industries, including the ownership, operation or management of casinos, racetracks, off-track betting parlors and other gambling enterprises;
        d. adult entertainment, including pornography and other harmful materials;
        e. antipersonnel weapons (land mines, "assault‐type" automatic and semiautomatic weapons, firearms, etc.), armaments, ammunition or weapons delivery systems provided for commercial and private markets;
        f. privately operated correctional facilities, including jails, prisons, penitentiaries, detention centers, prison camps and transfer centers.
  5. Core business activity refers to a company’s primary, or central focus of activity and is an essential element in the company’s economic success. Generally, a "core business" is one that accounts for 10% or more of a company’s revenue derived from the objectionable products and/or services and discontinuing the activity would materially change the nature of the company’s operations. An exception to the 10% threshold will apply to restaurants and other food retailers that sell or serve alcoholic beverages. For such businesses, a 25% revenue threshold will apply. In addition, the board will not knowingly invest in companies that have contracts with an agency or department of the U.S. or foreign government, which materially contribute:
        a. to the production, maintenance or upkeep of tailor‐made and/or essential core nuclear weapons systems,
        b. tailor‐made and/or essential components and/or services that facilitate the lethal use of nuclear weapons.
  6. Companies supplying raw materials, packaging, supplies, and/or other components to ineligible companies will be assessed on a case‐by‐case basis. General retail establishments (other than restaurants and other food retailers) engaged in the sale of alcoholic beverages, tobacco products, adult entertainment, including pornography and other harmful materials, lottery tickets or firearms will be assessed on a case‐by‐case basis.
  7. Emerging markets commingled equity pools are exempt from the above restrictions if specifically authorized and the aggregate exposure of companies otherwise prohibited does not exceed 10% of the value of the fund.
  8. Commingled hedge fund pools are exempt subject to periodic reporting described elsewhere in this statement.

Wespath Benefits and Investments also excludes companies under our Human Rights and Climate Change guidelines subject to our Management of Excessive Sustainability Risk policy. To see a list of companies excluded under our Human Rights guideline, click here. To see those excluded under our Climate Change guideline, click here.

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