FOR IMMEDIATE RELEASE
September 17, 2024
Contact: Nancy Treviño, nancy@stopthemoneypipeline.com, 786-201-8958
New Reveal Episode Spotlights Vanguard’s Fossil Fuel Problem
Reveal from The Center for Investigative Reporting released its latest episode on Saturday, entitled “Your Retirement Investments Are Probably Fueling Climate Change”. The episode focused primarily on Vanguard, and the experts and thought leaders featured raised some important points which I wanted to highlight below.
Climate risk is financial risk
- By investing in fossil fuels, Vanguard is not pursuing the best long-term interests of its clients, because climate change will undermine future economic performance. As a reminder, Vanguard is the world’s largest investor in fossil fuels.
- “Climate risk is financial risk and asset managers can’t afford to avoid it. When we see an asset manager like Vanguard that is just asleep at the wheel, well, from a purely financial perspective, that’s concerning.” – Connor Chung, IEEFA
- Ignoring climate risk is arguably a breach of a fiduciary’s duty of care.
- Vanguard client Paul Rissman wrote to the company: “Vanguard, through its lack of attention to prudent proxy voting, may be placing my portfolio at undue risk, breaching its duty of care. … I expect Vanguard, as my fiduciary, will… take immediate action to manage and mitigate the climate risks in its portfolio.”
- Despite Vanguard’s claim that it is owned by its clients, Rissman’s concerns and those of the 1,400 clients who signed on to the letter were ignored. Earlier this year, Sierra followed up with a letter signed by over 8,000 Vanguard clients.
- Fossil fuels are no longer the reliable source of returns they once were – underperforming vs the S&P 500 over the past decade. Meanwhile, it’s possible to deliver reliable returns comparable to Vanguard index funds while excluding fossil fuels.
- “The data’s clear. The fossil fuel industry has underperformed. It’s a small part of the portfolio. It’s easy to get rid of. Why are you still in it?” – Dan Cohn, Institute for Energy Economics and Financial Analysis (IEEFA)
- “It is absolutely possible to do climate-friendly passive investing.” – Alex Wright-Gladstein, Sphere
Fossil fuel projects and the role of bonds
- Vanguard is a major bondholder in many fossil fuel extraction and infrastructure projects, which threaten to release enough carbon to erase any hope of reaching the world’s climate goals.
- “We looked at the Mountain Valley pipeline, the Willow Project, BP, deepwater drilling. We looked at LNG expansion in the Gulf South and fracking in the Permian Basin. … [Vanguard] is far and away the biggest investor in these companies. In four out of five instances, they are the biggest buyer of newly issued bonds.” – Jessye Waxman, Sierra Club
- For example, the Mountain Valley Pipeline in Appalachia, which poses severe risks to the health, environment, and livelihoods of impacted communities.
- “It’s almost like an awful, traumatizing last gasp of the fracking and methane industry to say we’re going to go to these extremes and the consequences for all of us be damned.” – Russell Chisholm, Protect Our Water, Heritage, Rights (POWHR)
The movement is growing, with more action to come
- Individuals and organizations featured in the episode have requested meetings, delivered letters, signed petitions, held vigils, and taken part in nonviolent direct actions. For three years Vanguard has ignored their calls to action. With his recent appointment in July, Salim Ramji – the first Vanguard CEO hired from outside of the company – has a chance to change Vanguard’s course on climate.
- Meanwhile, actions targeting Vanguard will continue. For example, Earth Quaker Action Team (EQAT) will be hosting a National Day of Action on Wed 10/9.
- “I think that we are in a time and history in relation to climate change, when the choices that we make in the next several years are going to be really, really critical on how livable our planet is.” – Lina Blount, EQAT
Available spokespeople
- Jessye Waxman – Sierra Club, who spoke about the organization’s Investing in Carbon Bombs report
- Eileen Flanagan and Eve Gutman – Earth Quaker Action Team (EQAT), which organized the protest outside Vanguard’s HQ featured in the episode
- Russell Chisholm and Denali Nalamalapu – Protect Our Water, Heritage, Rights (POWHR), who have been impacted by and are fighting against the expansion of the Mountain Valley Pipeline
- Paul Rissman – a retired investment banker and Vanguard client who spearheaded a letter written to Vanguard by over 1,400 clients, asserting that by failing to take climate risk into account Vanguard was violating its fiduciary duty
- Sam Asher – who is working with his fellow Google employees to ask the company to decarbonize its 401(k), including by filing a shareholder resolution with As You Sow at Google’s most recent AGM, and launching an internal petition which has over 1,000 signatories
- Andy Behar – As You Sow, which worked on the above shareholder resolution and co-authored a report with the University of Waterloo which showed that two million employees from twelve tech-sector companies could have earned an estimated $5.1 billion in additional returns had their employers moved to decarbonize their retirement plan holdings 10 years ago
- Alex Wright-Gladstein – CEO and founder of Sphere, who spoke about how it is possible for asset managers to deliver reliable returns comparable to Vanguard index funds while excluding fossil fuels
- Nancy Treviño – Stop the Money Pipeline (STMP), part of the Vanguard S.O.S. network and a Vanguard retail client who is also happy to talk to Spanish-speaking press
- Dan Cohn and Connor Chung – Institute for Energy Economics and Financial Analysis (IEEFA), who spoke about the underperformance of the fossil fuel sector over the past decade compared to the wider stock market over the past decade