Vanguard to provide more ESG detail following engagement from Walden Asset Management

Vanguard, the $4trn mutual fund titan, is to provide more information about the environmental, social and governance stance of its funds following engagement from SRI firm Walden Asset Management.

The Valley Forge-based giant said, in a letter to Walden’s Tim Smith, that it would publish the “first iteration” of expanded reporting later this month.

“This report will feature deeper discussion of our thinking on climate risk and gender diversity (as two issues on we expect continuing focus) as well as expanded anecdotal discussion of specific engagements, voting rationale, and vote decisions,” wrote Glenn Booraem, Investment Stewardship Officer.

As part of an agreement, Walden has withdrawn a resolution at two of Vanguard’s index funds requesting a review of their proxy voting at companies, particularly on shareholder resolutions relating to climate change.

While mutual funds are not required to hold annual meetings for investors, Vanguard has scheduled a November meeting for other reasons, providing the opportunity for a vote on the Walden resolution.

This led to a round of engagement between them, culminating in the letter earlier this month.

“We are pleased that Vanguard is championing climate risk and board diversity in its numerous engagements with companies,” said Smith, Walden’s Director of ESG Shareowner Engagement.“This includes Vanguard’s proxy votes this spring supporting shareholder resolutions on climate change at Exxon Mobil and Occidental Petroleum, helping drive majority votes at both companies and a high support level of 62% at Exxon Mobil.”

“This report will feature deeper discussion of our thinking on climate risk and gender diversity”

He also noted that Vanguard also voted in favor of some resolutions on board diversity, “sending a strong message to companies” and that Vanguard had further stated its strong belief that companies must disclose material risks associated with issues such as climate change.

Smith continued: “The report will show that Vanguard has begun to vote for social and environmental resolutions in some cases.

“Yet the record of improvement is not substantial enough, as Vanguard still doesn’t support the vast majority of environmental and social issue resolutions on matters of significant concern to a growing number of investors.”