Vanguard Makes Bold Statement, Pulls Out of Net Zero Asset Managers Initiative

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Vanguard
Image via Vanguard.

Vanguard has pulled out of the Net Zero Asset Managers initiative, a major investment-industry measure that tackles climate change, write Ross Kerber and Noor Zainab Hussain for Reuters.

The world’s biggest mutual fund manager explained it wants to demonstrate independence with this move and clarify its views for investors.

“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,” said the company.

Top investors have been facing growing pressure from Republican politicians over their use of environmental, social, and governance factors in choosing and managing securities. The NZAM initiative, which was launched two years ago to encourage fund firms to reach net zero emission targets by 2050, is one major focus of criticism.

As of November, the initiative counted 291 signatories that total around $66 trillion in assets under management. The exit of Vanguard, which manages roughly $7 trillion in assets, is a major blow to efforts to organize industries to leave fossil fuels behind.

Read more about Vanguard from Reuters.

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