FOR IMMEDIATE RELEASE
AUGUST 29, 2023
CLIMATE CATASTROPHE: VANGUARD SUPPORTED ONLY 2% OF U.S. ENVIRONMENTAL AND SOCIAL SHAREHOLDER RESOLUTIONS IN 2023
The Asset Manager’s New Stewardship Report Shows Decline Even From 2022’s Low Voting Performance; Vanguard’s Support for Environmental & Social Measures Is Even Less Than BlackRock’s
Yesterday, Vanguard disclosed that it supported only 2% of environmental and social shareholder resolutions in the United States during the 2023 proxy season – down sharply even from 2022, when the company supported such resolutions 12% of the time. The same report showed that Vanguard only supported 2% of environmental and social shareholder resolutions globally as well.
Following the same trend, BlackRock’s support for environmental and social proposals in the U.S. fell from 22% in 2022 to 7% this year – shockingly low and yet still higher than Vanguard.
In reporting on both companies’ support for shareholder resolutions, Reuters noted that both firms “have been under fire from conservative U.S. politicians who say they have over-emphasized sustainability issues.” Similarly, the Financial Times reported: “The shift comes at a time when investing based on environmental, social and governance factors has become highly politicized and asset managers have come under attack by Republicans.”
Statements from Vanguard S.O.S.:
“Vanguard and BlackRock both acknowledge the risks that climate crisis poses to the financial system and to investors, yet they continue to do almost nothing to mitigate that risk,” said Roberta Giordano, campaign manager for Vanguard S.O.S. “Last year’s numbers were bad, but 2% is shocking. Looking at Vanguard’s behavior as a whole, including its decision to leave NZAM, we have to question the company’s commitment to safeguarding clients’ investments from evident risk. Currently, Vanguard seems to be more concerned with partisan backlash by U.S. conservatives than with its fiduciary duty. Regardless of the reasons, this backsliding on climate action is unacceptable.”
“Asking companies to provide more disclosure is not the same as managing and mitigating risk,” said Jessye Waxman, senior campaign strategist of the Sierra Club’s Fossil-Free Finance campaign. “It’s alarming that the world’s largest asset managers either don’t understand this or choose to ignore this. Contrary to what Vanguard and BlackRock say, simply asking companies to disclose more about their risks and practices is not sufficient to protect investors from growing risks, like climate change. The largest shareholders need to hold companies accountable to actually manage and mitigate these risks. Clients of Vanguard and Blackrock should be concerned that their managers are violating their fiduciary duty by voting down proposals that would cut emissions and reduce the risks that climate change poses to their portfolios.”
“Vanguard’s ongoing failure to mitigate climate risk highlights the need to call for those of moral conscience to move their money out of Vanguard until the company changes course,” said Lina Blount, director of strategy and partnerships for Earth Quaker Action Team, which is based in Pennsylvania and has frequently staged actions outside of Vanguard’s Malvern, PA, headquarters.
Vanguard is the second-largest asset manager in the world, with more than $7 trillion in assets under management, and it is the largest institutional investor in fossil fuels. Across the board, Vanguard’s actions to mitigate climate risk lag far behind even slow-moving peers like BlackRock and State Street.
About Vanguard S.O.S.
Vanguard S.O.S. is an international campaign pushing Vanguard to chart a new course away from climate catastrophe and toward truly sustainable and responsible investing. The network is made up of civil society organizations, social movements, and financial experts working together to secure a climate-safe future for everyone.
Contact: TJ Helmstetter at [email protected]