Wespath Benefits and Investments (Wespath), through its Wespath Investment Management division, engages companies on issues of sustainability, including environmental stewardship, human and workers’ rights, access to health care and sound corporate governance.
Background: One of the four focus areas of The United Methodist Church is “combating the diseases of poverty by improving health globally.” Wespath initiated in 2010 an ongoing conversation with Bristol-Myers Squibb on the company’s efforts to provide medicines to persons in low- and middle-income countries. The conversation focused on the challenges of reaching patients with HIV/AIDS, tuberculosis and malaria. Wespath asked Bristol-Myers to consider donating an HIV/AIDS patent to the Medicines Patent Pool, a United Nations backed organization working to lower the cost of HIV medicines and to facilitate new drug combinations for patients in low-income countries. Bristol-Myers entered into formal negotiations with the Medicines Patent Pool and in 2013 reached an agreement to donate the patent for Atazanavir.
The Hershey Company
Background: Wespath met with Hershey in 2009 to discuss the company’s efforts to combat child labor in West Africa, where 80% of the world’s cocoa is produced. Hershey also was engaged by United Methodist Women, whose members raised public concern about the use of child labor on cocoa farms. Hershey subsequently released its first sustainability report and launched its CocoaLink program, which provides education and support to cocoa farmers in Ghana. Farmers in the CocoaLink program increased their crop yields by 46% within three years. Hershey announced in 2012 it would begin producing its Bliss chocolate line from certified fair-trade cocoa. The company also announced an additional $10 million commitment to reduce child labor and improve the cocoa supply from West Africa. Hershey went further and in 2012 announced that by 2020, the company intends to source 100% of its cocoa supply from fair trade sources. The company is currently ahead of its annual targets to meet this longer-term sourcing goal.
Background: Wespath and eleven other institutional investors engaged several pharmaceutical companies in dialogue in 2011 regarding a concern that shareholder value was being affected by the assessment of several large fines related to health care fraud.. An investor/corporate working group was formed that included Amgen, Bristol-Myers Squibb, Eli Lilly, Johnson & Johnson, Merck & Co, and Pfizer. The group met throughout 2012 and drafted the “Principle Elements of a Leading Recoupment Policy” paper which described how companies can hold individuals accountable for actions that may negatively affect shareholder value. The paper was presented to the compensation committees of each company’s board of directors, and all agreed to adopt the policy.
Background: Wespath filed resolutions at Wal-Mart in 2004, 2005 and 2006, requesting that the company prepare a sustainability report. Sustainability reports generally disclose important information about a company often not included in annual reports or filings required by the SEC, including environmental impacts, social policies, labor and human rights issues and corporate governance guidelines. The resolutions received 14%, 16% and 10% of the vote, respectively.
In 2007, Wal-Mart published its first sustainability report. Wespath provided feedback on the report and continued the dialogue with a review of the 2008 report.
Wespath informed Wal-Mart in 2008 about the state-sponsored use of child labor to harvest cotton in Uzbekistan. Wal-Mart subsequently directed its suppliers to stop using cotton sourced in Uzbekistan. Since then, the company has worked with its suppliers to develop traceability measures to identify the source of cotton used in Wal-Mart’s products.
Wespath, in partnership with the Interfaith Center on Corporate Responsibility (ICCR), is a member of Wal-Mart’s stakeholder advisory board and regularly meets with the company’s executive leadership to consult on environment, social and governance matters and to give input regarding the corporate sustainability report.