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Vanguard Quits Climate Alliance In Major Blow To Woke Investing


Vanguard Quits Climate Alliance In Major Blow To Woke Investing

In a mighty blow to Environmental, Social and Governance (ESG) investing, Vanguard, the world’s second-largest asset manager, announced it’s withdrawing from a major financial alliance against climate change: the Net Zero Asset Managers (NZAM) initiative.

NZAM, which Vanguard joined in 2021, bills itself as “an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.”

Last month, Consumers’ Research joined 13 state attorneys general in filing a complaint against Vanguard with the Federal Energy Regulatory Commission (FERC), charging that the firm was violating its agreement to control utility company shares passively.  

“Committing to net zero isn’t an abstract goal,” wrote Will Hild, executive director of Consumers’ Research, in a Dec. 1 Wall Street Journal op-ed. “The Net Zero Asset Managers Initiative requires its members to prescribe specific emissions targets for industry sectors, especially utilities.

“The International Energy Agency’s net-zero road map envisions eliminating fossil fuels from electricity generation by 2050. That would require every American utility to remake its operations radically.”

Vanguard’s exit comes at a time of increased saber-rattling and legal maneuvers by Republicans against investment firms pursuing woke agendas in general and anti-fossil-fuel agendas in particular.

Congressional hearings are in the works, and various state legislatures are readying anti-ESG measures. On Dec. 1, Florida CFO Jimmy Patronis announced the state would withdraw $2 billion in assets managed by BlackRock. “Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns,” said Patronis. 

Here are two key excerpts from Vanguard’s statement about its withdrawal: 

Industry initiatives [like NZAM] can advance

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