Vanguard did not support any of the 400 environmental or social shareholder proposals it reviewed during the 2024 US proxy season, labeling them as “overly prescriptive,” unnecessary, or unrelated to material financial risks.
The $9.3 trillion asset manager’s backing for such proposals has been on a steep decline over the past three years, following a peak of more than 46 percent in 2021. Last year, Vanguard endorsed just 2 percent of these proposals.
In its US stewardship report, Vanguard explained that the decline in support is not due to a shift in its voting policy application but rather reflects its assessment that these proposals either failed to address financially material risks or were excessively prescriptive. Of the 187 governance-related proposals, Vanguard supported 51 tied to shareholder rights.
Vanguard is not alone in its reduced support for environmental and social proposals. BlackRock, the largest asset manager with $10.6 trillion under management, reported last week that it supported only 4 percent of such proposals globally this year.
Both firms noted that many of this year’s proposals called for actions that companies had already undertaken.
Vanguard and BlackRock have both reduced or ended their participation in groups committed to combating climate change while also facing significant criticism from Republicans who accuse them of using their vast shareholdings to promote “woke capitalism.” Vanguard stated that its “no” votes included rejecting 40 “counterproposals” that sought to block companies from addressing climate and diversity issues.
Vanguard’s decision to withhold support from environmental and social proposals has contributed to a broader decline in support from the record levels seen in 2021. According to ISS-Corporate data, median support for environmental and social shareholder proposals at Russell 3000 companies was 21 percent and 18 percent, respectively, this year.