Company Descriptions

Wespath Investment Management, a division of Wespath Benefits and Investments, communicates with many companies about environmental stewardship, human and workers’ rights, access to health care and sound corporate governance practices. Many of these dialogues are long-running conversations. We focus on sustainable business practices and their impact on shareholder value, which guide these and all new discussions that we and our partners have with corporations.

This page contains summaries of some of our current corporate dialogues.

Abbott Labs

Status: Dialogue

Background: The United Methodist Church has identified as one of its four focus areas, “Combating the diseases of poverty by improving health globally.” Our position from a business standpoint is that efforts in this direction promote positive awareness of corporate brands around the world. This, in turn, helps open new markets and support growth. We are participating in ongoing conversations with Abbott Labs about the company’s efforts to provide medicines to persons in low and middle-income countries. The dialogue has focused on the challenges of reaching patients with HIV/AIDS, tuberculosis and malaria.

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Bristol Myers-Squibb

Status: Dialogue

Background: The United Methodist Church has identified as one of its four focus areas, “Combating the diseases of poverty by improving health globally.” We believe that corporate efforts that directly address health issues can have a positive impact on brand awareness, open new markets and drive growth. Wespath initiated an ongoing conversation with Bristol Myers-Squibb in 2010 about the company’s efforts to provide medicines to persons in low- and middle-income countries. The dialogue has focused on the challenges of reaching patients with HIV/AIDS, tuberculosis and malaria.

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Caterpillar

Status: Dialogue

Background: In 2005, Wespath co-filed a resolution at Caterpillar requesting 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 Securities and Exchange Commission, including environmental impacts, social policies, labor and human rights issues and corporate governance guidelines. In 2006, Wespath and other proponents withdrew the resolution following Caterpillar's commitment to publish a report and to involve shareholders in the review process of the draft report.

In 2008, Wespath, working with the United Methodist General Board of Church and Society and other faith-based investors, met with the company to discuss the use of its products in the Occupied Palestinian territories. We expressed our belief that the lack of a corporate human rights policy was exposing the company to reputational and financial risk. As a result, the company made slight revisions to language relating to the responsible use of its products.

At a 2009 meeting, investors again stated their concerns about Caterpillar’s human rights policies, and in 2012, Wespath asked the company to consider adopting the United Nations’ “Guiding Principles for Business and Human Rights: Implementing the ‘Protect, Respect, Remedy’ Framework.” For more information about our recent engagement, please see the February 2012 issue of SRI Connection.

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ConAgra

Status: Dialogue

Background: Wespath began a dialogue in 2009 with ConAgra Foods asking the company to consider reducing the amount of pesticides applied to potato fields, in keeping with our focus on long-term sustainability as an important factor in corporate success. ConAgra is the third-largest potato supplier in the U.S. We have voiced concern that excessive use of pesticides is not sustainable, resulting in higher costs and increased water pollution. In 2010, ConAgra established five sustainability goals it intends to achieve by 2015, including using fewer agricultural chemicals and reductions in water use.

ConAgra has adopted Integrated Pest Management solutions and by 2011 had implemented its proprietary Grower Information Edge program, which provides real-time data to assist farmers in early disease diagnosis, and the development of optimal schedules for irrigation, fertilization and spraying.

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Fred's

Status: 2012 Resolution filed

Background: In 2009, Wespath contacted Fred’s, seeking information on the company’s supply chain. The company was not responsive. Therefore, we filed a shareholder resolution, which received 7.65% of the vote.

Further analysis of the company revealed that, for two consecutive years, the number of "withhold" votes for every member of the board of directors exceeded 50% and the company took no action to restore shareholder confidence. In addition, 77% of shareholders voted in favor of a 2009 resolution that asked that the company adopt a majority vote policy for election of board members. Again, the company failed to act.

In 2010, Wespath wrote to Fred’s to ask how the company planned to address the high number of “withhold” votes from the directors. The company did not respond. Wespath filed a shareholder resolution requesting the company adopt a policy that directors must receive a majority of shareholder votes to be elected. The resolution was withdrawn in exchange for a meeting with Fred’s Chairman of the Board and the Chairman of the Corporate Governance Committee. The meeting was held, however, the company declined to adopt a majority vote policy. At the 2011 annual meeting, these two directors again failed to win majority support from the company’s shareholders.

In 2012, Wespath filed a shareholder resolution asking the company to nominate a director with corporate governance expertise. We believe such a director can help restore investor confidence in the board. Unless an agreement is reached that would allow us to withdraw the resolution, it will be voted on in June 2012.

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The Hershey Company

Status: Dialogue

Background: In 2009, Wespath met with Hershey to discuss the company’s efforts to combat child labor in West Africa, which produces 70% of the world’s cocoa. Additional meetings were held in 2010, where the company described its CocoaLink program, which provides education and support to cocoa farmers in Ghana. Additionally, in 2010 Hershey released its first sustainability report.

In 2011, staff attended an in-person meeting and asked the company to consider producing one of its products using fair trade chocolate. In early 2012, Hershey announced it would begin producing its Bliss chocolate bar from certified fair-trade chocolate. The company also announced an additional $10 million commitment to reduce child labor and improve the cocoa supply from West Africa.

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Hewlett-Packard

Status: Dialogue

Background: Wespath contacted HP in 2008 concerning the company’s human rights policies and practices in Israel and the Middle East. In 2009, the company committed to responding to investor questions in writing. A meeting was later held in 2010, where the company reported it was conducting a global human rights impact assessment of its operations. In 2011, Wespath led an investor dialogue with the company to discuss the results of the assessment. During the meeting, investors offered specific examples of how the company’s products and operations have implications for human rights in the Israel/Palestine region, and urged the company to examine whether its human rights policies were being upheld.

In 2010, Wespath met with HP to discuss the company’s sourcing of “Conflict Minerals” from the Eastern Democratic Republic of Congo, where proceeds from some mining activities are used to fund militia groups. The company later supported the Conflict Minerals Trade Act and is developing a method of certifying its mineral supply all the way down to the mine of origin.

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Hormel

Status: Dialogue

Background: Wespath began a dialogue in 2009 with Hormel that focuses on issues of sustainability within the meat supply chain. Wespath continues to meet periodically with Hormel to discuss various issues such as the use of antibiotics in animals, environmental pollution, air emissions and worker safety in animal processing facilities.

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Motorola Solutions

Status: Dialogue

Background: In 2008, Wespath co-filed a shareholder resolution requesting the company (then called Motorola) model its human rights policies on international standards including the Universal Declaration of Human Rights and International Labor Organization standards. A meeting was held to discuss the resolution, which received 10% of the vote at the company’s annual meeting. In 2009, we re-filed the resolution and attended the annual meeting where we voiced our concern in front of the company’s co-CEO’s and board of directors. The resolution received 7.12% of the vote. In 2010, we attended the annual meeting where we made a statement supporting the resolution and again encouraged the co-CEO’s and the board of directors to strengthen the company’s human rights policy.

In 2010, Wespath participated in an investor group that engaged Motorola on the issue of “Conflict Minerals” sourced from the Eastern Democratic Republic of Congo, where proceeds from some mining activities are used to fund militia groups. In 2011, Motorola Solutions announced the launch of the Solutions for Hope Project, a pilot initiative to source conflict-free tantalum from the Democratic Republic of Congo.

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Sysco Corp.

Status: Resolution Withdrawn

Background: In 2010, Wespath contacted Sysco to request information about the company’s water sustainability program. A company’s environmental practices, most notably as they apply to long-term sustainability and good business policy, can play a major role in corporate success and therefore are of strategic importance to our investors and us. During a subsequent meeting, investors provided the company with a resource list and suggested guidelines for Sysco to incorporate into its water assessment program. In 2011, a shareholder resolution was filed requesting Sysco to report on hydrologic risks in its supply chain that are related to climate change. The resolution was withdrawn in exchange for a series of meetings and the company’s commitment to incorporate water risk into its sustainability program.

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Tenet Healthcare

Status: Dialogue

Background: In 2009, at our request Tenet Healthcare agreed to publicly report on sustainability measures. Wespath periodically consulted with the company and provided feedback on the project. In 2011, Tenet Healthcare published its first sustainability report.

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Wal-Mart

Status: Dialogue

Background: In 2004, 2005 and 2006, Wespath filed resolutions at Wal-Mart requesting 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 to include a review of the 2008 report.

In 2008, Wespath informed Wal-Mart 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, 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 to the corporate sustainability report.

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