What does it mean that Vanguard lags behind its peers on climate?
Vanguard is one of the world’s two largest investors in coal, oil, and gas and it has the most passive ownership (through index funds) of the world’s top 200 greenhouse gas emitters.
When Vanguard shows up at the annual shareholder meetings of other corporations, it votes for business as usual. Vanguard continues to oppose too many shareholder resolutions related to climate issues and support corporate directors who are stalling on climate action.
Vanguard still has no policy to divest its actively managed funds from coal companies and it has notably fewer ESG (investment funds using environmental, social, and governance criteria to screen out certain companies) options than its peers.
While other large asset managers also have a long way to go, their actions so far show that change in finance is possible, despite what financial leaders said for decades. Vanguard has no excuses left.
Vanguard needs to:
- be an active shareholder, supporting climate shareholder resolutions and voting out directors that don’t take climate change seriously,
- offer fossil fuel-free funds as the default for its customers, and
- make a plan to exit its investments in coal, oil, and gas.
Climate in the Boardroom: How Asset Manager Voting Shaped Corporate Climate Action in 2021. Majority Action.
Vanguard Group: Passive About Climate Change. Institute for Energy Economics and Financial Analysis.
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