Friday, June 10 2022
  • Says 17% of actively managed assets are currently aligned
  • Expects this figure to reach at least 50% by 2030
  • $5 trillion in index funds not covered by commitment

LONDON, May 26 (Reuters) – Vanguard, the world’s second-largest asset manager, said it expects at least half of its $1.7 trillion in actively managed funds to be aligned with the global climate target by 2030, drawing criticism from campaigners for a lack of ambition.

The privately held U.S. company is one of more than 230 to have joined the Net Zero Asset Managers (NZAM) initiative, a group of investors committed to supporting the goal of achieving net zero greenhouse gas emissions by the middle of the century.

As part of membership, all signatories commit to setting shorter-term goals for emissions related to their investments.

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Vanguard said that currently $290 billion of its actively managed assets are invested in companies on track to achieve net-zero emissions by 2050 or earlier. By 2030, he expects half to be invested in goal-aligned businesses.

However, the company has refused to set a formal target or expectation on the bulk of its assets – more than $5 trillion – which are invested in index-tracking funds, many of which contain high-emission companies with weak climate targets.

Vanguard said more than 70% of its equity index fund assets are invested in companies with some form of emissions reduction target, though the bulk is not yet fully aligned with the stocks that drive them. would lead to net zero.

Vanguard said it would engage with companies on their climate plans and commitments, but this coordinated effort was needed from companies, markets and policymakers.

In response, campaigners criticized the company’s ambition.

“Vanguard should be ridiculed by NZAM for this absurd attempt at a climate target,” said Casey Harrell, senior strategist at the Sunrise Project. “Vanguard needs to start over and do better.”

Eileen Flanagan, campaign director for the Earth Quaker action team, said: “Such inadequate climate pledges make us even more determined to exert powerful grassroots pressure to wake up the current leadership of Vanguard.”

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Reporting by Simon Jessop Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.


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