Because so much money is invested through Vanguard’s funds, it has enormous voting power at the annual meetings of almost all publicly traded companies.

Once a year, every publicly traded company’s stockholders get to vote on resolutions about how the company is run. Asset managers like Vanguard vote on behalf of all of their customers who have money invested in a certain company. 

Because climate change poses such a profound risk to the whole economy, Vanguard has a fiduciary responsibility to its customers to hold the corporations driving climate change accountable to substantially reducing their emissions.  

Vanguard needs to vote on shareholder resolutions that set companies’ emissions in line with no more than 1.5°C increase in global temperatures – the threshold for irreversible change – and vote against boards of directors that fail to align their companies with that goal. 

If we push Vanguard in this direction, it could change Exxon, Chevron, and many of the biggest contributors to climate change!

References:

Proxy Voting 101. Morningstar. 

Climate in the Boardroom: How Asset Manager Voting Shaped Corporate Climate Action in 2021. Majority Action.