Vanguard and social/environmental issues

I was a bit shocked to read about vanguard’s behavior relating to their record on voting in shareholder resolutions on social and environmental topics.

Thinking about it a bit more I’m not so surprised that they want to keep the status quo, but voting for green issues is not necessarily bad business.

I don’t feel like I can love them unconditionally anymore… and am looking for possible alternative funds.

Would welcome your thoughts!

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It is a very interesting, polarizing topic, so this thread might turn ugly.

I support social/ environmental changes via personal and political decisions. I would also support it via financial investment in a specific company that is socially/ environmentally friendly and a good business. On the other extreme, as a shareholder i do not expect all my investments, which i made to make money, to fulfill these requirements. So i do not expect vanguard to be involved.

Controversial indeed.

Two key problems for me: First, while we probably all broadly support environmental and social issues, we might differ in the details. And secondly, not every measure that some people believe is good environmentally or socially actually is. So, in the linked article we learn that only a minority of votes on these matters passed, but we don’t know how many of these votes were on actually useful measures and how many were on illusory ones.

Overall I prefer my investment manager to care for my investments and not chase unicorns some people believe in. And those environmental and social issues that should be worked on should be worked on in the political process. Not shareholders, but voters should decide these matters and then leave shareholders no choice in complying.

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I believe that social and environmental issues are positive but the hipe we make around them is negative.
According to today’s speech, the investor is responsible for climate issue. What about the choice of the consumer who wants always larger cars, more travel just for the week-end and more online shopping.
I work in a company that will be climate neutral in 2021. What does this means? The company will fully compensate the CO2 emission since first january 2021. I think this behavior is a joke as you can’t compensate CO2 once it is already in air. But there is a lot of green washing in many resolution and it is wise from investors to reject these inefficient decisions.

Yes I agree with what you are saying!

a lot of the ESG activities are encouraging tokenistic behavior, and I’m not willing to pay higher fees for an ESG fund at this point. My work pension fund is fully sustainable apparently (not sure what exactly that means yet), so I consider that at least some of my investments are ESG in some way.

yes we don’t know what the motions were that vanguard rejected in the article I shared. Good point!

But still it makes me think more critically about my unconditional support for vanguard.

I hope this thread doesn’t turn ugly, instead I hope to explore the topic and get more ideas as to how to deal with it :slight_smile:

That’s also why I resisted the temptation to give my opinion. However, this constructive formulation summarizes rather well what I think:

When talking about these issues, it’s important to always take a step back and be open to other angles. If it were that simple, it wouldn’t be so polarizing.

My question is: What’s the alternative?
Also why call out just Vanguard in the thread title when Blackrock is mentioned in the article too (and other big guys undoubtedly “guilty” of the same)?

@dbu thanks for your questions. I called out vanguard specifically solely because that’s what I invest in and because vanguard is so popular amongst the FIRE community, but yes, the same applies to blackrock as well. I might try to find out what sort of motions they rejected and will get back to you if I find out.

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