Press Release: UMC Investor—GBPHB/Wespath Encourages Corporate Response to Climate Change
May 3, 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 through its Wespath Investment Management division (GBPHB/Wespath) is collaborating with other global, sustainable investors for the 2016 corporate annual general meeting (AGM) or “proxy voting” season by filing and supporting shareholder resolutions aiming to improve company responses to the threat of climate change.
Addressing the Risks of Climate Change
GBPHB/Wespath 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. 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 shares and losing a voice for The United Methodist Church.
The overwhelming majority of climate scientists agree that the world is warming. GBPHB recognizes this threat and the urgent need for cooperation among governments, businesses, investors and consumers to change the ways in which people live—reducing carbon emissions and limiting climate change.
Filing Climate Change-Related Shareholder Resolutions
GBPHB/Wespath has established investment policy guidelines that address the risk of loss to the value of our investments resulting from unsustainable business practices, including the risks of climate change. These guidelines have resulted in the exclusion of major “pure-play” thermal coal companies and coal-dependent utilities. While GBPHB/Wespath remains invested in many of the world’s largest oil, gas and mining companies, it continues to demonstrate leadership among the global investment community in encouraging these companies to support an orderly transition to a lower-carbon economy.
Early results from this year’s proxy season—which has seen a record number of climate-related resolutions—indicate an important shift in investor engagement and in company responses. GBPHB/Wespath believes this is a critical time for the UMC to remain engaged in these discussions with companies and with fellow investors around the world.
Anglo American—GBPHB/Wespath co-filed a resolution asking for additional reporting on the environmental risks and opportunities associated with climate change. The resolution was supported by company management and received 96.25% support from investors. The resolution is binding according to the laws of the United Kingdom, where Anglo American is domiciled. This level of support mirrors results last year for similar resolutions at BP, Shell and Statoil, but is otherwise unprecedented for environmental resolutions.
Occidental Petroleum and Chevron—GBPHB/Wespath led the filing of shareholder resolutions requesting that both companies provide additional disclosure to investors about scenario planning and the ways in which they are “stress-testing” their fossil fuel portfolios in anticipation of a lower-carbon future. The management of both companies do not support the resolutions. However, GBPHB/Wespath believes this type of analysis is critical in understanding each company’s long-term strategic positioning within the rapidly transforming energy sector as renewable energy costs fall and markets face disruption that may occur faster than anticipated. Initial, conservative results from Occidental’s April 29 AGM indicate that more than one-third of investors supported the resolution, a very significant vote for a “first-time” climate resolution filed with a company. Wespath has also received commitments of support from many of the largest international institutional investment funds for the resolution at Chevron.
Additional information about these shareholder resolutions, GBPHB/Wespath’s voting activity and voting results of the annual general meetings is available on the GBPHB and Wespath websites.
Investing in Climate Solutions
GBPHB/Wespath continues to invest in companies that are helping the world mitigate and adapt to climate change. These include industry giants such as Unilever, Microsoft, Procter & Gamble, Walmart, Marks & Spencer and Nestlé that are either “carbon neutral” or have announced plans to source 100% of their energy from renewable energy. At the start of April, GBPHB/Wespath also finalized a new $250 million investment in a dedicated “low-carbon energy solutions” mandate. The new investment increases GBPHB/Wespath’s exposure to companies involved in energy efficiency, renewable energy, and waste and water management—which the agency believes will provide strong investment opportunities.
Gaining International Recognition
GBPHB/Wespath has been ranked number three in the United States and number 15 globally for sustainable investment related to climate change. The rankings come from the 2016 Asset Owner Disclosure Project (AODP), an independent not-for-profit organization which annually ranks 500 of the world’s largest investors based on how they manage climate risk and invest in low-carbon solutions. GBPHB/Wespath was commended for ranking among the top 3% of asset owners in the world and specifically for its engagement activities, where it was placed seventh globally.
As an active and an engaged investor, GBPHB/Wespath has a “seat at the table” with companies and plays an influential role in encouraging them to address climate change, human rights and other environmental, social and governance (ESG) issues. Engagement and investment help transform companies in ways that can make them more sustainable for the future and that are in the long-term best interest of the clergy, lay workers and institutional investors GBPHB serves.
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.