The world’s second-largest asset manager, Vanguard, has refused to halt new investments in fossil fuel projects and to stop supporting coal, oil and gas production.
CEO Tim Buckley said the group, which manages $ 8.1 billion for more than 30 million investors and is The largest investor in coal companies Worldwide, it was determined to protect its customers from climate risks but this would not oblige it to complete new commitments to fossil fuel industries.
“Vanguard does not seek to guide the company’s strategy. We engage with companies on climate change, ask them to set targets and report on how they reduce climate risks. This transparency will ensure that climate risks are properly priced by the market,” Buckley said in an interview with FT.
Companies that have a large carbon footprint can now play a critical role in the transition to a low-carbon future, he added.
“Our duty is to maximize the overall long-term return for customers. Climate change is a significant risk but they are only one factor in an investment decision. There is already a pension crisis and we need to make sure climate concerns do not make it even worse,” Buckley said.
Buckley’s comments were made prior to the publication of Vanguard’s first progress report towards the goal of reaching Zero carbon emissions net in all its investment portfolios by 2050.
Only $ 290 billion, or 17 percent, of Vanguard’s $ 1.7 billion of assets under management are eligible for net zero by 2050. It expects it to grow to 50 percent by 2030, the agreed interim deadline set for members Zero Net Asset Managers InitiativeA coalition of 235 large investors who together manage about $ 57.5 billion.
But Vanguard has chosen not to attach net intermediate zero targets to the passive funds that track the indices that make up the bulk of its assets. The company said the reason is that net zero targets were not understood in the original targets of these funds. U.S. asset managers also have a fiduciary duty to maximize returns so adding other goals that are not in a fund prospectus may expose them to legal challenges. Active managers have more leeway to decide which factors to use when deciding which companies to buy.
Vanguard also believes that achieving a 50 percent reduction in emissions in these passive funds by 2030 would be very difficult without substantive action by the companies themselves and much clearer about how government policy might develop.
“More than 70% of Vanguard’s stock assets are invested in companies with publicly declared emission reduction targets. More than $ 1 trillion of these assets are invested in companies that have already committed to zero-target targets,” Buckley said.
Proponents of her case have been working to make the actual transcript of this statement available online. Black stoneVanguard and State Street – There is a policy that will achieve a complete reduction in carbon emissions by the end of the decade.
Vanguard ranked the last of 25 major asset managers in the assessment of fossil fuels and climate change released by Reclaim Finance and Urgewald, two environmental campaign groups, in April.
“Asset managers need to send clearer signals to the fossil fuel industry. Any investor committed to achieving carbon neutrality by 2050 must immediately Stop all investments In companies that are developing new oil and gas supply projects, “said Lara Kublier of Reclaim Finance.
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