What are all these pledges to go “net zero” about?
Swiftly getting its investments in line with cutting global emissions in half by 2030 and reaching credible net zero emissions by 2050 is just the beginning of what Vanguard needs to be doing to deal with its climate problem.
Net zero means reducing greenhouse gas emissions enough that any leftover emissions can be removed from the atmosphere by planting trees or using carbon capture and storage technologies.
In March 2021, Vanguard signed onto the Net Zero Asset Managers Initiative. By doing so, it agreed to 1) “create investment products aligned with net zero emissions by 2050 and facilitate increased investment in climate solutions,” 2) “implement a stewardship and engagement strategy, with a clear escalation and voting policy, that is consistent with our ambition for all assets under management to achieve net zero emissions by 2050 or sooner,” and 3) “publish… disclosures, including a climate action plan, annually.”
As of April 2022, Vanguard had not released any plan for how it will fulfill its pledge. And its peers who have made the same pledge and have released plans are nonetheless on track to fall far short of how much they need to cut emissions this decade.
We need a plan that includes an immediate end of fossil fuel expansion and real reductions in the burning of fossil fuels now. We cannot gamble with any net zero plans that dangerously allow for heating the planet up past 1.5 ℃ and rely on unproven methods for removing carbon from the atmosphere to correct our overshoot. Vanguard should use its participation in the Net Zero Asset Managers Initiative as an opportunity to take ambitious, meaningful climate action.