Vanguard joins BlackRock, cuts support for shareholder items on climate, social issues - Reuters
Vanguard joins BlackRock, cuts support for shareholder items on climate, social issues | Reuters
Vanguard joins BlackRock, cuts support for shareholder items on climate, social issues
The logo for Vanguard is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 1, 2022. REUTERS/Brendan McDermid/File Photo Acquire Licensing Rights
- Companies
Aug 28 (Reuters) - Vanguard supported just 2% of shareholder resolutions on environmental and social issues at U.S. companies this year, down from 12% last year, the top mutual fund manager said on Monday, fueling a drop in investor backing overall.
Vanguard said the declining support rate reflected a rising number of proposals - 359 this year, up from 290 a year ago, coupled with improvements in company disclosure that it said made many resolutions unnecessary.
With $8.2 trillion under management, Pennsylvania-based Vanguard has become a leader in deciding whether companies should take steps like curbing greenhouse gas emissions or reviewing their workforce diversity.
Support for shareholder resolutions calling for such steps has declined at U.S. companies this year, with top asset manager BlackRock saying it backed the mostly-advisory measures just 7% of the time, down from 22% last year.
Vanguard's drop in support was even steeper. Like BlackRock, Vanguard noted new securities regulations that make it harder for companies to leave questions off their ballots. In a note on its website, Vanguard also said many resolutions sought changes that might not be needed.
"In some cases, we identified that although a proposal raised a material risk at the company in question, the board had already demonstrated appropriate oversight of the risk and evidenced its oversight through robust disclosure or had practices in place that substantially fulfilled the proposal’s request," Vanguard said.
Vanguard and BlackRock have been under fire from conservative U.S. politicians who say they have over-emphasized sustainability issues, and from liberal activists who say the firms do too little to address global problems.
Like BlackRock, Vanguard did not address how the criticism may have shaped votes this year but said its approach to evaluating shareholder proposals "has been consistent over time."
Reporting by Ross Kerber; editing by Diane Craft
Our Standards: The Thomson Reuters Trust Principles.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”