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Wespath Benefits and Investments implements the sustainable investment strategies—including the approach to engagement and proxy voting—for investment funds made available through it and its investment management subsidiaries, including Wespath Institutional Investments. Below, Wespath and its investment management subsidiaries are referred to collectively as "Wespath."

"Engagement" describes using our influence as an investor to enter constructive dialogues with companies, policymakers and asset managers.

Engagement is at the heart of our sustainable investment activities. Through engagement, Wespath urges leaders to administer sustainable business practices and policies, which we believe will ultimately lead to greater financial security and improved investment returns for our clients and beneficiaries.

Wespath engages on issues that are material to shareholder value. These include climate change, human rights, board diversity and many more. These engagements take many forms, including dialoguing via video calls and in-person meetings, writing to government agencies about proposed regulations, and filing shareholder resolutions with suggestions for how a company can improve its corporate governance or better address a particular sustainability-related risk.

Chevron and Occidental Petroleum

Wespath has engaged companies on climate-related issues for over 20 years. For example, Wespath co-leads Climate Action 100+ (CA100+) engagements with large oil and gas companies Chevron and Occidental Petroleum (Oxy). CA100+ is an investor-led engagement initiative seeking to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. A few of the highlights of the engagements with Chevron and Oxy include:

  • 2016: Oxy’s shareholder resolution asking for a climate risk report receives 49% support, a watershed moment for investor’s support of climate action at U.S. oil and gas companies. A similar Chevron resolution receives 41% support. Wespath re-files the same shareholder resolutions at both companies.

  • 2017: Chevron publishes "Managing Climate Change Risks" in response to the resolution. The Oxy resolution passes with majority support, marking a first for a U.S. oil and gas company. Oxy subsequently begins including environmental information in its quarterly earnings calls.

  • 2019: Oxy publishes a new climate assessment report and announces plans to develop a major carbon capture facility. Wespath attends Oxy's annual meeting to speak in support of CA100+. Meanwhile, Chevron creates an "Energy Transition Team" focused on increasing its low-carbon business activities. Wespath co-leads a meeting with Chevron to discuss the company’s new methane reduction goals.

  • 2020: Engagements with Chevron focus on opportunities to enhance the company's approach to the low-carbon transition and include a conversation with the CEO. Oxy becomes the first U.S. oil and gas major to announce a target to achieve net-zero emissions from its operations by 2040 and in scope 3 emissions by 2050.

  • 2022: Engagements focus on topics like climate-related target setting and disclosure, aligning corporate lobbying practices with climate goals, and improving methane management. Chevron becomes the first oil and gas company to recommend a vote for a shareholder proposal focused on climate. The resolution, which concerns management of methane, passed with 98% support.

Read more about Wespath’s climate and environmental engagements.

Investors for Opioid and Pharmaceutical Accountability

Wespath serves as the co-lead of the Investors for Opioid and Pharmaceutical Accountability (IOPA), a collection of investors who came together out of a concern for the people and communities affected by the opioid epidemic.

The IOPA has engaged large pharmaceutical companies and helped change executive pay practices. Five pharmaceutical companies agreed to include legal settlements in executive compensation metrics in 2023. This incentivizes leaders to focus on safely producing and distributing medicine by including legal settlements the company pays for irresponsible practices in calculations for executive pay.

Read more about how the IOPA has sought to promote responsible corporate behavior.

Midwest Investors Diversity Initiative

The Midwest Investors Diversity Initiative (MIDI) is an alliance of institutional investors, including Wespath, that engages Midwest-based companies and helps them take steps to improve their racial, ethnic and gender diversity. Research indicates that improving diversity can help improve long-term outperformance. MIDI also helps companies improve disclosure practices related to diversity.

Between MIDI's founding in 2016 and July 20, 2022, the companies MIDI engaged have appointed 95 women and people of color to their boards.

Read more about MIDI—and how Wespath has worked with MIDI to engage asset managers.

Asset Manager Engagement

As the co-lead of the Net-Zero Asset Owner Alliance's engagement working track, Wespath has advocated for asset owners (such as pension funds and insurers) to go beyond traditional corporate engagement to engage with asset managers.

By engaging with asset managers, asset owners can broaden their efforts to address systemic risks—risks that touch all sectors of the economy and nearly all types of investments—like climate change. Since asset managers are one of our key partners at Wespath, the work at the Alliance sought to make clear that asset owners have a vested interest in asking that their long-term perspective be reflected by their asset managers.

Read more about the Net-Zero Asset Owner Alliance’s focus on asset manager engagement.

Public Policy Engagement

Wespath conducts public policy engagement focused on how macro-level issues affect the structure, function and governance of markets as a whole and how they affect investors’ interests. Public policy engagement may include supporting regulatory initiatives if, in the judgment of Wespath, such action will improve the long-term sustainability of fund performance.

For instance, Wespath wrote to the U.S. Environmental Protection Agency in 2022 and the Pipeline and Hazardous Materials Safety Administration in 2023 in support of proposed standards for regulating methane emissions in the oil and gas industry. In addition, we offered both government agencies suggestions for how these standards could be strengthened to further address climate risks.

Read more about Wespath’s public policy engagement.

All publicly traded companies hold annual general meetings (AGMs) during which shareholders cast votes on a variety of issues, including shareholder resolutions as well as governance matters like the election of directors and executive compensation packages. Wespath works with service providers to vote the vast majority of the thousands of proxies in our portfolio following the guidance of our custom proxy guidelines.

Summary of 2023 Voting Activity—All Ballot Items:

Vote with Management Recommendation: 85.8%
Vote Against Management Recommendation: 14.2%

Summary of 2023 Voting Activity—Shareholder Resolutions:

Vote with Management Recommendation: 39.1%
Vote Against Management Recommendation: 60.9%

As of December 31, 2023.

Proxy Voting Guidelines

The majority of our proxy votes are cast in accordance with our Proxy Voting Guidelines, which are annually updated and approved by Wespath’s boards of directors and oversight committees. These guidelines are grounded first and foremost in our understanding of the responsibilities of prudent fiduciaries and complemented by an aspiration to align with the values of the United Methodist Church. They are organized in four main sections:

  1. Governance
    • Board of Directors
    • Executive Compensation
    • Shareholder Rights
  2. Environmental and Social Factors
  3. Disclosure
  4. Securities Lending Program

Wespath staff manually vote the ballots of fund holdings where we have identified a strategic benefit to manual voting, and we've hired Institutional Shareholder Services—a leading proxy analysis firm—to assist in casting other votes.