The world's second-largest asset manager received the worst possible score in a new climate scorecard as NGOs, grassroots groups, and finance experts ramp up pressure for it to act on climate.
Today, in an open letter to Vanguard CEO Tim Buckley, over 100 organizations representing over 6 million people called on the world’s second-largest asset manager to shift away from business as usual and demonstrate the financial leadership needed to address the scale and urgency of the climate crisis.
The letter comes with the launch of Vanguard SOS — an international climate campaign made up of civil society organizations, finance experts, grassroots groups and climate activists, many of whom have been pushing fellow investing giant BlackRock to start tackling its climate problem with the BlackRock’s Big Problem campaign.
“Vanguard is the quintessential example of an institution that could be doing so much good for the world, and is instead sticking to a business-as-usual mode that is ending in tragedy for the planet and its people,” said Bill McKibben, author and founder of Third Act. “Imagine how blinkered you'd have to be to be earth's second-biggest asset manager and not using that power to help ward off the greatest emergency humans have ever faced. It's tragic, but it's also maddening — and that anger will propel action as people demand accountability."
Vanguard has been the target of environmental campaigners for years — most recently in 2021, when The Yes Men put the company in the hot seat with its “Vanguardians of the Galaxy” stunt. Now, with the launch of Vanguard SOS and a new scorecard from Reclaim Finance ranking 30 major asset managers on their climate commitments (Vanguard received the worst possible score — zero out of 30), the seat is hot once again.
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“Our new report shows that Vanguard is one of the biggest climate laggards of the asset management industry,” said Lara Cuvelier, Sustainable Investments Campaigner with Reclaim Finance. “Vanguard is one of the top two investors in companies developing new coal projects and holds $130 billion in the 12 biggest oil and gas expansionists — and there is not a single policy in sight from Vanguard to restrict investments in fossil fuel expansion or even use its shareholder voting power to hold the world’s biggest polluters accountable.”
Even BlackRock, the world’s largest asset manager — which for years has been big on proclamations about the role of finance in decarbonizing the economy but ultimately slow in action — is slowly beginning to walk its talk on the climate front.
Grassroots pressure is also mounting against Vanguard this week with protests planned in the US and Europe. Activists are targeting the asset manager for its massive investments in fossil fuels, companies driving deforestation, and the harm these investments are causing to vulnerable communities around the world.
In the Philadelphia area, where Vanguard is headquartered and most of the company leadership lives, a week-long walk started Monday. Activists and community members are following the money upstream, literally — from destructive facilities along the Delaware River to those profiting from these industries. The walk is set to conclude with a protest at the Vanguard headquarters in Malvern, PA on Friday.
“Not only are Vanguard's investments driving climate chaos globally, they include some of the biggest polluters in the Delaware Valley,” said Eileen Flanagan, Campaign Director with Earth Quaker Action Team — a grassroots, nonviolent action group founded by Philadelphia-area Quakers. “Whether we are living on the frontlines of air pollution, students concerned about our future, or Vanguard customers concerned about the wisdom of these investments, we all have a stake in correcting Vanguard’s destructive course.”
The Vanguard SOS campaign is calling on the finance giant to implement a series of solutions to address the climate crisis and the detrimental impacts of its investments, starting by using its massive shareholder power this spring to vote in favor of climate shareholder resolutions and against corporate boards that are obstructing change.
Between growing consumer awareness of their banks’ harmful investment activities and the SEC's proposed rules that would require companies to include information about their GHG emissions and climate-related risks, finance giants won’t be able to bury their heads in the sand on climate for much longer. While more and more banks have begun to mobilize around climate change and have made individual net-zero pledges, their continued investment in polluting sources of energy flies in the face of those pledges — and external pressure is mounting for them to put their money where their mouths are. December saw a promising move to phase out coal financing from British banking giant HSBC; but many more continue to hedge their bets on forgoing financing for fossil fuel companies. Fossil fuel-producing businesses are still big money for banks — to the tune of trillions of dollars — and it’s something that consumers often feel powerless to change in the grand scheme of the climate conversation.
In response to this, consumer awareness campaigns from activist organizations such as Bank.Green have emerged to make it easier for individual investors and banking customers to discover where their banks’ money is going — and, if necessary, to move their money into institutions whose practices align with their values.
In the meantime, the Vanguard SOS campaign says it will continue to escalate pressure against Vanguard executives in the coming months to prioritize aggressive action on climate, including focusing on organizing and educating Vanguard customers and employees.