Vanguard Group's decision to leave an asset managers initiative committed to net-zero goals has come under criticism from some fiduciaries.
Vanguard said on Wednesday it was withdrawing from the Net Zero Asset Managers initiative, which as of November had 291 signatories with a collective $66 trillion under management committed to net-zero carbon emissions by 2050. One of the largest members, Vanguard said its departure was to provide clarity to its investors, but that it will pursue similar objectives independently.
Kirsten Snow Spalding, vice president of the Ceres Investor Network, said in an emailed statement said that Ceres, a founding partner of the Net Zero Asset Managers initiative, wishes Vanguard well and looks forward to still working with them.
"It is unfortunate that political pressure is impacting this crucial economic imperative and attempting to block companies from effectively managing risks — a crucial part of their fiduciary duty," Ms. Spalding said.
New York City Comptroller Brad Lander, fiduciary for the $239.5 billion New York City Retirement System, had harsher words. "It is a misguided about-face at a time when financial institutions need to be taking a strong, collective approach to addressing financial risks from climate change," he said in a separate emailed statement. The pension funds do not work with Vanguard, he said, but "reducing carbon emissions in alignment with the Paris Agreement is non-negotiable for investment managers serious about the economic dangers that climate change poses to their portfolio companies.
Former U.S. Vice President Al Gore, chairman of Generation Investment Management, in a Bloomberg interview called it "an irresponsible and shortsighted decision."
Dave Wallack, executive director of For the Long Term, a non-profit group for state and municipal fiscal officers, said in a separate email that while its members were disappointed by Vanguard's departure, they are hopeful by the asset manager's pledge to remain committed to climate risk mitigation. "I am sure the market and their clients will be watching their actions closely," Mr. Wallack said.
"It is also important to note that BlackRock has seen its overall assets under management increase significantly despite divestments by a few states averse to climate risk mitigation. Standing up against these blacklists is being rewarded by the market," Mr. Wallack said.
