Press Release: GBPHB Human Rights and Diversity Engagements—UMC Investor Yields Positive Change
April 18, 2016
For Immediate Release
Contact: M. Colette Nies, Managing Director, Communications
(847) 866-4296 or firstname.lastname@example.org
Glenview, IL—The General Board of Pension and Health Benefits (GBPHB) recently announced successful results from ongoing corporate engagements in the areas of board diversity, human rights and other environmental, social and governance issues (ESG).
Ongoing Shareholder Engagements
GBPHB directly encourages companies to adopt more environmentally sensitive and socially just business policies that are transformative in supporting a more sustainable future for companies and society as a whole. GBPHB’s experience demonstrates that the agency has significantly greater influence when it remains engaged with companies and active in drawing attention to these important issues—rather than selling its shares and walking away.
GBPHB, an original signatory of the United Nations Principles for Responsible Investment (PRI), along with its U.S. and international sustainable investment partners, plays a privileged role in influencing positive change by large global companies.
Helping Place Women on Boards
Board diversity—specifically the inclusion of women on boards—remains an area of focus for GBPHB. GBPHB’s Wespath Investment Management division (Wespath) believes that diversity is a key attribute of a well-functioning board and demonstrates a measure of sound corporate governance. Research1 has shown that companies with diverse boards exhibit a stronger mix of leadership skills and improved understanding of consumer preferences (women control more than two-thirds of consumer spending in the U.S.2)—both are linked to better stock market and financial performance.
GBPHB’s corporate engagement efforts promoting board diversity have successfully influenced Comcast and Simon Property Group (S&P 500 companies) to increase the number of female directors on their corporate boards. These positive actions taken by the two companies recently resulted in Wespath withdrawing the shareholder resolutions it filed with the companies.
Simon Property Group, one of the largest real estate companies and owner of shopping malls in the U.S., also agreed that it would amend its director qualification policy by explicitly including women and minorities—as requested in the Wespath shareholder resolution. Wespath also withdrew a resolution filed with Equifax, when the company committed to adding a woman to its board in 2017.
U.N. Guiding Principles on Business and Human Rights
Wespath engages with the management teams of many of the companies in which it invests to address human rights and other ESG issues, recognizing that these dialogues often lead to changes in business practices that ultimately benefit investors. Across its investment engagements, the agency encourages companies to adopt the United Nations Guiding Principles on Business and Human Rights (Guiding Principles), in keeping with the call of The United Methodist Church General Conference 2012 (petition 21071).
Wespath’s human rights engagement has included Caterpillar—a company that has come under scrutiny because of the use of its products in the Israeli settlements in the Palestinian territories. Caterpillar recently announced that, in alignment with the Guiding Principles, it has expanded its human rights policy; provided more detailed reporting on the policy implementation to its board; and conducted a human rights impact assessment across its entire value chain, including its suppliers and dealers.
As an engaged investor, Wespath has a ‘seat at the table’ with companies and can play an influential role in encouraging them to address human rights and other ESG issues. Engagement helps to transform companies in ways that help make them more sustainable for the future, and that are in the long-term best interest of the clergy, lay workers and institutional investors the agency serves.
1 2012 and 2014 Credit Suisse research report, “Gender Diversity and Corporate Performance,” links board diversity to better stock market and financial performance (higher return on equity, higher price/book ratios and improved growth prospects)
2 July 2013 Fleishman Hillard research report, “Women, Power & Money: Wave 5”
The General Board of Pension and Health Benefits (GBPHB) is a not-for-profit administrative agency of The United Methodist Church, with Church-authorized fiduciary responsibility for the benefit plans it administers and the assets it invests through its Wespath Investment Management division.
Prudent investment management decisions are an ongoing, long-term priority, supporting benefit plans for over 92,000 participants and approximately $20 billion in assets managed on their behalf, and for many United Methodist-affiliated endowments, foundations and other institutions. This fiduciary obligation reflects the stated values of the Church and helps ensure financial, environmental and social sustainability across all investments.
GBPHB is the largest reporting faith-based pension fund and among the top 100 pension funds in the United States. As a sustainable investor, GBPHB is committed to active ownership through corporate and public policy engagement, proxy voting and the management of excessive sustainability risk. Through its Positive Social Purpose Lending program, GBPHB invests in affordable housing, community development and expanded loan opportunities for disadvantaged communities worldwide.