After receiving pressure from investors and others, Vanguard has announced that it will withdraw from the Net Zero Asset Managers (NZAM) initiative. Brittany Bernstein reports in National Review:
Vanguard announced Wednesday it is pulling out of the Net Zero Asset Managers initiative, an investment-industry effort to encourage fund firms to reach net zero emission targets by 2050.
“We have decided to withdraw from NZAM so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks—and to make clear that Vanguard speaks independently on matters of importance to our investors,” Vanguard said in a statement.
Vanguard, the world’s top mutual fund manager, said the change “will not affect our commitment to helping our investors navigate the risks that climate change can pose to their long-term returns.”
The change of heart comes roughly a week after Consumers’ Research and 13 state attorneys general asked the Federal Energy Regulatory Commission to review Vanguard’s request to own energy company stocks.
“Americans are paying sky-high electricity rates and companies like Vanguard are making the problem worse,” Will Hild, executive director of Consumers’ Research, wrote in an op-ed for the Wall Street Journal.
“With more than $7 trillion in assets under management, the Pennsylvania-based investment firm has publicly committed to pressuring utilities to lower their emissions,” Hild added. “Vanguard appears to be not only putting America’s critical infrastructure at risk but violating its agreement only to control utility company shares passively. To protect U.S. consumers and safeguard national security, FERC should investigate the company’s conduct.”
Hild responded to Vanguard’s announcement in a statement on Wednesday, saying the decision “proves what we’ve been saying from the beginning, this is a conspiracy against the consumer.”
Action Line: Your investments should not be used to push the agenda of your asset manager. Your investments should benefit you. That’s the fiduciary rule. Does the fiduciary rule apply to your financial advisor? If you don’t know, you should ask. If you need help from a fiduciary, let’s talk. Before our conversation, get to know me better by subscribing to my free Survive & Thrive letter by clicking here.
E.J. Smith - Your Survival Guy
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