Wespath Hires New Deputy Chief Investment Officer From Illinois SBI

Johara Farhadieh will succeed Dave Zellner, who plans to retire next summer from the Methodist Church pension and benefits arm.



Wespath Benefits and Investments has named Johara Farhadieh deputy chief investment officer, effective the week of Oct. 2. She will succeed current CIO Dave Zellner, who will retire in the summer of 2024. Farhadieh is currently CIO of Illinois State Board of Investment.

Johara Farhadieh

In her new role, Farhadieh will oversee the investment management team at Wespath, the nonprofit pension and benefits agency for the United Methodist Church, as well as join the organization’s senior leadership team during the transition period, working closely with Chief Executive Officer and General Secretary Andy Hendren.

“Johara will be an exceptional addition to Wespath and our investment team,” Hendren said in a release. “Johara’s mission orientation and executive experience make her the right leader to carry this legacy forward. She will bring a deep understanding of capital markets, fresh perspectives from her life’s experiences, and relational talents with diverse stakeholders to Wespath.”

At the Illinois State Board of Investment, Farhadieh oversees the investment management of the $24 billion defined benefit fund, as well as the fiduciary obligations of the nearly $5 billion defined contribution plan for more than 170,000 beneficiaries and 67,000 participants respectively.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

“I am very excited that Johara will be joining Wespath,” Zellner said in a release. “She has clearly demonstrated success in managing multi-asset portfolios supporting the investment of pension and defined contribution plan assets.”

Farhadieh earned her bachelor’s degree in finance and a master’s in business administration from DePaul University.

“I am truly honored to assume the role of deputy CIO at such an esteemed organization,” Farhadieh said in a release. “I am passionate about achieving top-tier investment performance while upholding a commitment to diversity and sustainable investing practices.”


Related Stories:

Minority Alts Firm Preserver Partners Names New CIO

Pitcairn Family Office Names Sonnenberg as New CIO

Pennsylvania PSERS Names New CIO, Tapping UAW Investment Official

Tags: , , , ,

Republican ESG Working Group Calls Out Proxy Voting

An interim report published by Republicans on the House Financial Services Committee argues that ESG lowers returns and that the proxy voting industry is unacceptably opaque.


An “ESG Working Group” established by Republicans on the House Committee on Financial Services in
February, published an interim report Friday highlighting the various policy goals it intends to pursue. The goals include: regulating proxy voting and ESG rating firms, mitigating application of EU regulations to U.S. issuers, and blocking the Securities and Exchange Commission’s climate disclosure proposal.

The report indicates that the group is primarily interested in the “E” for environmental in the environmental, social and governance moniker, a focus that is reflected in the lawsuits brought by fossil fuel industry groups seeking to overturn the Department of Labor’s Employee Benefit Employee Benefits Security Administration’s rule proposal permitting ESG factors to be used by fiduciaries making retirement plan investment decision: “The initial focus of the Working Group centers on the environmental aspect, specifically the current promotion of environmental policies in the financial services industry and by regulatory bodies.”

To that end, the group recommended reforms to the proxy voting industry. They identify the two largest proxy voting firms, Glass Lewis and Institutional Shareholder Services, which is the parent company for Chief Investment Officer. The House group states that proxy voting firms need to be more accountable and transparent to shareholders, including being required to publish their methodologies and data regularly and only considering pecuniary factors in making their voting recommendations. Additionally, the report said that proxy voting firms should be required to disclose if any of the proposals on which they are offering a voting recommendation was submitted by a client, so as to reduce conflicts of interest.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news.

The report makes broadly similar recommendations for ESG ratings firms (ISS also provides ESG ratings). The House members write that firms selling ESG ratings should disclose their methodologies and data used in assigning the ratings.

The group also identifies the volume and content of some shareholder proposals as a problem. They argue that shareholders submit too many politically motivated proposals that consume time and resources for issuers. They state that the SEC should make it harder to submit and re-submit previously denied proposals by increasing the ownership thresholds for making proposals.to enable shareholders to submit a proxy proposal if they have owned $2,000 of the company’s securities for at least three years; owned $15,000 of the company’s securities for at least two years; or $25,000 of the securities for at least one year.

The SEC’s current proposal on climate disclosure should not be allowed to proceed, the group argued. It said that the proposal goes beyond the SEC’s authority to require climate-risk and greenhouse gas disclosure because these are not material concerns, and accuses the SEC of prioritizing “social justice” over investment returns.

The largest asset managers were also a target of the report. The “Big Three,” or The Vanguard Group, BlackRock, and State Street Global Advisors, were identified by the group as posturing as passive investors who are actually quite active in voting to approve ESG and DEI initiatives. The report criticizes the firms for having signed an international net zero commitment, which Vanguard left at the end of 2022. The report said that “Congress should consider policies that better align the voting behavior of passively managed index funds with retail investors’ best interests.”

Lastly, the report argued that the U.S. government should be more active in advocating for U.S. securities issuers in the context of foreign regulations. The report specifically identified the EU’s Corporate Sustainability Due Diligence Directive, which requires issuers with more than $150 million in market capitalization to disclose scope 3 emissions, referring to the carbon emissions of firms within a company’s supply chain, but not the company itself. The regulation applies to many U.S.-based issuers operating in the EU, and the group argued that the U.S. government should negotiate with foreign jurisdictions to remove or mitigate the applicability of foreign regulations to U.S. businesses.

 

Tags: , ,

«