Delivering a major blow to the Environmental, Social and Governance (ESG) investing movement, Vanguard's decision to axe its participation in NZAM, which only began just last year, comes as Consumers' Research joins 13 state attorneys general in filing a complaint against Vanguard with the Federal Energy Regulatory Commission (FERC).
According to the complaint, Vanguard violated its agreement to control utility company shares passively when it went "woke." (Related: The collapse of FTX also recently helped expose the fraud of ESG, putting Vanguard even more in the spotlight.)
NZAM bills itself as "an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner."
In a December 1 op-ed for The Wall Street Journal, Will Hild, executive director of Consumers' Research, explained in further detail what NZAM entails and why Vanguard's participation in it needed to stop.
"Committing to net zero isn't an abstract goal," Hild said. "The Net Zero Asset Managers Initiative requires its members to prescribe specific emissions targets for industry sectors, especially utilities."
"The International Energy Agency's net-zero road map envisions eliminating fossil fuels from electricity generation by 2050. That would require every American utility to remake its operations radically."
Republicans are strongly against ESG and other anti-fossil fuel agendas, which fall under the greater umbrella of woke investing. Some GOP-led states are preparing anti-ESG legislation and other measures in an effort to fight back against it.
In Florida, state CFO Jimmy Patronis recently announced that the Sunshine State will be withdrawing $2 billion in assets managed by BlackRock in an attempt to stop the woke investing trend.
"Florida's Treasury Division is divesting from BlackRock because they have openly stated they've got other goals than producing returns," Patronis said.
Seeing the writing on the wall, Vanguard issued a statement about its withdrawal from NZAM, explaining that while sometimes these types of initiatives "can advance constructive dialogue," they also "sometimes ... result in confusion about the views of individual investment firms."
"That has been the case in this instance," Vanguard added, "particularly regarding the applicability of net-zero approaches to the broadly diversified index funds favored by many Vanguard 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," the statement further reads.
When Vanguard was first founded, Jack Bogle created a unique ownership structure in which the company's mutual funds own the Vanguard Group. This was meant to ensure that the interests of investors were put first.
"Overlaying an ESG agenda on fund management and proxy-voting betrays Bogle's founding vision, by using investor assets to pursue social goals – at high risk of harming returns in the process," reported Zero Hedge.
Even with Vanguard no longer participating, NZAM still boasts having most of the world's largest asset management firms among its 290 signatories. These include BlackRock, State Street, JPMorgan Asset Management and London-based Legal & General.
Fidelity and Pimco, and now Vanguard, are three notable exceptions that are not or are no longer NZAM members.
The latest news coverage about the woke agenda can be found at Wokies.news.
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