Radio show spotlighting Vanguard’s fossil fuel problem reaches over one million listeners

The latest episode of Reveal, titled “Your Retirement Investments Are Probably Fueling Climate Change,” focuses on the controversy around Vanguard’s fossil fuel investments. Reveal, from The Center for Investigative Reporting and Mother Jones, airs on over 500 radio stations across the country and reaches more than one million weekly listeners. The experts and thought leaders featured in the episode raised important points, highlighted below.

This story comes soon after the largest climate change protest ever at Vanguard’s headquarters this summer, and with the most Vanguard protests happening in one day coming up this fall. We’re already hearing from listeners who are Vanguard customers newly interested in asking the asset manager to do better or in moving their money out of the company.

Climate risk is financial risk

  • Vanguard is the world’s largest investor in fossil fuels. 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.
    • “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, Institute for Energy Economics and Financial Analysis
  • 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, the Sierra Club 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 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
    • “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 ensure that we cannot meet global climate goals.
    • “We looked at the Mountain Valley pipeline, the Willow Project, BP deepwater drilling, 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
  • One example of many is the Mountain Valley Pipeline in Appalachia, which poses severe risks to the health, environment, and livelihoods of nearby 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

The movement is growing, with more action to come

  • Organizations featured in the episode have requested meetings, delivered letters, signed petitions, held vigils, and taken part in nonviolent direct actions. For over 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 change issues.
  • Meanwhile, protests targeting Vanguard will continue. For example, people in at least 7 states will hold protests as part of 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, Earth Quaker Action Team

Contact: Eve Gutman, eve@eqat.org
Mark Normington, mark.normington@sunriseproject.org

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