Vanguard did not endorse any environmental or social measures during the 2024 proxy season

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Vanguard did not endorse any of the 400 environmental or social shareholder proposals it considered in the 2024 US proxy season, saying they were “overly prescriptive,” unnecessary or unrelated to significant financial risks .

The $9.3 billion money manager’s support for these types of proposals at the firm’s annual meetings has fallen sharply for three years, after peaking at more than 46 percent in 2021. Last year, it voted in favor of 2 % of such proposals.

Vanguard said in its US management report that the drop in support “does not reflect a change in our team’s application of the funds’ voting policies. Rather, it can be attributed to our assessment that in each of these cases the proposals did not address financially significant risks. . . or were overly prescriptive.” Out of 187 proposals related to governance, he supported 51 proposals related to shareholder rights.

The world’s second largest money manager is not alone in declining its support for environmental and social proposals. BlackRock, the largest with $10.6 billion in assets under management, said last week it had voted in favor of just 4 percent of such measures worldwide.

Both firms said this year’s proposals included a number of requests that called for action on issues the companies had already addressed.

Vanguard and BlackRock have scaled back or dropped their involvement in groups committed to fighting climate change, while facing harsh criticism from Republicans who say they are using their large holdings to push “woke capitalism.” Vanguard said its “no” votes included rejecting 40 “counterproposals” that sought to prevent companies from addressing climate and diversity issues.

Vanguard’s decision not to support environmental and social proposals contributed to and reflected a larger decline in support from record levels set in 2021. Average shareholder support for environmental and social proposals at Russell 3000 companies was 21% and 18 %, respectively, this year, according to data from ISS-Corporate.

The Vanguard report was “absolutely stunning,” said Tim Smith, senior policy adviser at the Interfaith Center for Corporate Responsibility, which represents faith-based organizations that file shareholder proposals. “I think that’s both alarming and very surprising.”

“Vanguard is walking away from the game rather than being a responsible fiduciary and really looking at where there is a connection to shareholder value and issues in the resolutions,” he said.