Vanguard announces exit from net zero climate investment alliance (2022)
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Last week, the second-largest asset manager in the world and the world’s largest passive asset manager, Vanguard, announced that it had decided to leave a $66 trillion climate investment alliance.
The move came after 13 Republican state attorneys general filed a motion last month asking the Federal Energy Regulatory Commission to hold a hearing on Vanguard’s plans to purchase a large number of shares in public utility stocks. Stephen Soukup, a market analyst, an opponent of ESG, and the author of “The Dictatorship of Woke Capital,” wrote that “to the best of my knowledge, this is the first time that a coalition of state officials has taken action against a single ESG-committed asset management firm that isn’t BlackRock.”
Vanguard said in its statement that “the move [to leave the climate alliance] had been in the works for several months.” The Financial Times reported the news on December 7:
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Vanguard is pulling out of the main financial alliance on tackling climate change at a time when Republicans in the US have stepped up their attacks on financial institutions that they say are hostile to fossil fuels. With $7.1tn under management and more than 30mn customers as of October 31, Vanguard is the second-largest global money manager after BlackRock. The group said on Wednesday that it was resigning from the Net Zero Asset Managers initiative, whose members have committed to achieving net zero carbon emissions by 2050. Vanguard, which mainly manages passive funds that track market indices, said the alliance’s full-throated commitment to fighting climate change had resulted “in confusion about the views of individual investment firms”. “We have decided to withdraw from NZAM so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks — and to make clear that Vanguard speaks independently on matters of importance to our investors,” the Pennsylvania-based company said in a statement. NZAM was founded in December 2020 and had 291 members managing $66tn in assets as of November. Last year NZAM joined an umbrella climate finance organisation, the Glasgow Financial Alliance for Net Zero (Gfanz) upon its launch last year under Mark Carney, the former Bank of England governor. Vanguard will exit both groups. In a statement, NZAM said Vanguard’s decision was regrettable.[1] |
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- Environmental, social, and corporate governance (ESG)
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Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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