A few days after being fined by the Australian Securities and Investments Commission (ASIC) over alleged greenwashing, Vanguard has exited the global Net Zero Asset Managers alliance.
The firm, which manages US$7 trillion ($10 trillion) in assets and had 30 million investors, said in a statement that it had taken the decision to withdraw from the alliance after only a year.
The alliance had 291 signatories with US$66 trillion in assets under management who commited to accelerating the transition to global net zero greenhouse gas emissions by 2050 and supported investing aligned with net zero emissions by 2050 or sooner.
Vanguard said: “Such industry initiatives can advance constructive dialogue, but sometimes they can also result in confusion about the views of individual investment firms. That has been the case in this instance, particularly regarding the applicability of net zero approaches to the broadly diversified index funds favored by many Vanguard investors.
“Therefore, after a considerable period of review, 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.”
The asset manager said it would continue to inform investors with information on which products were designed to meet their net zero objectives and interact with companies to understand how they addressed climate risks.
Earlier this month, the firm was fined almost $40,000 by ASIC over alleged greenwashing claims regarding investment into companies related to tobacco sales.
