Posted inESG

Vanguard exits Net Zero Asset Managers initiative

Investment firm Vanguard has announced that it is ending its engagement with the Net Zero Asset Managers (NZAM) initiative.

A statement posted on Vanguard’s website said that the initiative had resulted in ‘confusion about the views of individual investment firms’, particularly around what it called ‘the broadly diversified index funds favoured by many Vanguard investors’.

It was for this reason, wrote Vanguard, that it was withdrawing from NZAM after what it called a ‘considerable period of review’. Vanguard signed up for NZAM in 2021.

Vanguard wrote: “This decision is part of our continuous assessment of our participation in external organisations and their ongoing alignment with Vanguard’s mission and perspectives on investing.”

It added: “This change in NZAM membership status will not affect our commitment to helping our investors navigate the risks that climate change can pose to their long-term returns. We will continue to provide investors the information and products they need to make sound investment choices, including products designed to meet net zero objectives. We will continue to interact with companies held by Vanguard funds to understand how they address material risks, including climate risk, in the interests of long-term investors. And we will continue to publicly report on our efforts with respect to climate risk, grounded in our deep commitment to our investors and their financial well-being.”

According to the NZAM website, it has 291 signatories under its wings with $66trn in assets under management. The site did not offer any comment on Vanguard’s decision. However, its Vanguard section of the website now returns a ‘404 error’, suggesting that the investment firm’s departure has been sudden.

However, the Vanguard SOS campaign did offer comment, via its website, that the investment manager is ‘steering the world towards financial and climate disaster’. It claims that Vanguard has invested $300bn in fossil fuels as of 2021, with $101bn in coal alone. It has also, says Vanguard SOS, invested in 12 of the world’s ‘most-devastating’ new fossil fuel projects.

Casey Harrell, senior strategist at Vanguard SOS, wrote in response to the firm’s leaving NZAM: “Vanguard has long lagged even its own industry peers in mitigating climate risks, but at least it claimed to be moving in the right direction. Now, with its decision to walk away from NZAM, the firm is dropping any pretext. Vanguard is bowing to right-wing political pressure instead of serving its customers’ best interests. It’s now clear that investors who are concerned about climate risk should take their investments elsewhere.”

Last year, Expert Investor reported that its charitable wing, Vanguard Charitable, has been used to funnel money to not one, but various hate groups in the US for years.

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

Part of the Bonhill Group.