Wellington and Impax Equity Strategies
Wespath has hired two asset managers—Wellington Management Company and Impax Asset Management Group—to actively manage public equity strategies that invest in solutions with an environmental lens.
Impax’s strategies managed on behalf of Wespath seek to identify strong companies providing products and services across themes like: energy; food, agriculture and forestry; water; and waste management.
Wellington manages several strategies on behalf of Wespath, including public equity strategies that focus on investing in quality companies enabling the low-carbon transition. The low-carbon transition refers to the ongoing shift from an economy that depends heavily on fossil fuels to generate energy to one that uses low-carbon energy.
Read more about the Wellington and Impax strategies.
BlackRock Transition Ready Portfolios
Wespath also employs a slightly different approach—driven by the BlackRock Transition Ready Portfolios (TRP)—that seeks to capitalize on the low-carbon transition while providing the diversified exposure typically provided by a passively managed strategy.
Wespath and BlackRock co-created the TRP strategy, which launched in 2018. TRP strategies are rooted in a simple premise: The market is not realistically assessing the impacts resulting from the transition to a low-carbon economy, leading to stock prices not reflecting reality for some companies.
BlackRock uses research, data and analytics to assess a company’s transition readiness in five key areas: energy generation/production, carbon efficient technologies, energy management, water management and waste management. The strategy invests slightly more in companies relative to the benchmark index that are better positioned for the low-carbon transition, and slightly less in the less-prepared companies.
Climate Action 100+
Wespath has taken on leadership roles with Climate Action 100+ (CA100+), an investor-led engagement initiative seeking to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. CA100+ is the largest ever collaborative engagement initiative.
Wespath co-leads CA100+ engagements with large oil and gas companies Chevron and Occidental Petroleum (Oxy), heavy equipment manufacturer Cummins, and electric utility provider WEC Energy.
Read more about our CA100+ engagements.
Read more about the progress we’ve seen from our longstanding engagements with Chevron and Oxy.
Net-Zero Asset Owner Alliance
Wespath helps to lead the United Nations-convened Net-Zero Asset Owner Alliance (the Alliance), a group of asset owners (such as pension funds and insurers) that have committed to transitioning their investment portfolios to net-zero greenhouse gas emissions by 2050.
As the co-lead of the Alliance’s engagement working track, Wespath has advocated for asset owners to go beyond traditional corporate engagement to engage more actively with asset managers as well as public policymakers about supporting the low-carbon transition. Wespath also co-leads the Alliance’s communications work and is involved in the Alliance’s monitoring, reporting and verification group.
United Methodist Interagency Just and Equitable Net-Zero Coalition
On Earth Day in 2021, Wespath and 10 of its fellow United Methodist Church (UMC) agencies publicly pledged to achieve net-zero emissions across ministries, facilities, operations and investments by 2050. This group came to be called the United Methodist Interagency Just and Equitable Net-Zero Coalition (Coalition). As its name implies, the Coalition places an emphasis on a just and equitable transition to net-zero to ensure structural barriers to racial and gender equity are addressed alongside climate issues.
Wespath helped come up with the idea for the Coalition and serves as the group’s co-chair. The group’s shared UMC values and experiences help its members to learn from—and work with—one another to find solutions to common challenges.
Climate Change Exclusion Guideline
To assist in identifying and managing financial risks related to climate change and human rights, Wespath’s Board of Directors adopted policies on the Management of Excessive Sustainability Risk (MESR).
On the issue of climate change, we have MESR-related guidelines on thermal coal and companies assessed as “high risk” of failing to adequately adjust their business model to the low-carbon transition. Several organizations focused on climate change, including Climate Action 100+, inform our MESR policy and our global sustainability research provider, Institutional Shareholder Services, provides data relevant to the policy. The climate change guideline stipulates Wespath may exclude companies subject to the following limitations:
- Developed Countries: Any company with revenues of 50% or greater stemming from extraction and/or mining of thermal coal
- Developed Countries: Electric utilities deriving 75% or more of their overall fuel mix from coal, unless a company has demonstrated its intent to transition from coal by sourcing 10% or more of its energy from renewable sources
- Developing Countries: Any company deriving approximately 50% of revenues from the extraction and/or mining of thermal coal
- Companies assessed as “high risk” of failing to adequately adjust their business model to the low-carbon transition
Read more about our investment exclusions.
As of August 31, 2023, we excluded 94 companies under the climate change guideline.
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