Investment Exclusions Guidelines
Wespath Benefits and Investments (Wespath) 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 Wespath’s fiduciary responsibility as described in ¶1504.14.
The UMC Principles Committee will evaluate and approve Wespath ethical screening guidelines following each General Conference to ensure consistency with adopted Church positions.
Management shall identify and maintain a list of companies excluded from investment. The list shall be updated monthly and made available to all Wespath external asset managers on a password protected Wespath web site.
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;
f. privately operated correctional facilities, including jails, prisons, penitentiaries, detention centers, prison camps and transfer centers.
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, Wespath will not knowingly invest in any company with identifiable nuclear weapons production contract awards from the U.S. Department of Defense or comparable agency or department of any foreign government.
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.
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.
Commingled hedge fund pools are exempt subject to periodic reporting described elsewhere in the Investment Strategy Statement.