11 Sep Public Pension Corner, #12 — Addendum
Today, I want, just briefly, to follow up on a news item from this week’s Public Pension Corner, that addressing Vanguard’s recently released Investment Stewardship U.S. Regional Brief. As noted in the blurb that accompanied the link, Vanguard reports that, for the second year in a row, it “did not support any environmental or social-related proposals at U.S. portfolio companies….”
While this is inarguably a positive development, it is one that should, nevertheless, carry a caveat or two.
First, it should be noted that Vanguard does not say in this document how it voted on anti-ESG proposals. It says only that that such proposals increased in number again this year: “Another trend that continued into the 2025 proxy year was the increase in proposals that sought to reverse or rebuke a company’s approaches to climate change risks, sustainability, or a range of social issues.”
If Vanguard wants to be seen as the one of the Big Three that has moved furthest from the ESG/stakeholderism consensus, then it can’t simply hold to the current status quo. It must actively work to depoliticize corporate behavior, to push companies “back to neutral.” Or, to put it more bluntly, it must work to undo E & S provisions already in place at companies through its engagement and voting practices.
And speaking of engagement….
Vanguard also notes that, over the course of the 2025 proxy season, it conducted 807 total corporate engagements with 701 companies, accounting for $4.4 trillion of the assets it has under management. As has always been the case, but as has become more clear over the last few years, engagement is where the real progress can be made or damage done on environmental and social issues. As Vanguard itself reports, one of the reasons that it did not vote for any E & S proposals and that total E & S proposals were down this year (by comparison to last) is due to “voluntary withdrawal of proposals by proponents, often following reported engagement with the company.” That’s telling.
We have no information on the subject matter of Vanguard’s corporate engagements, no information as to the success of those engagements, and no sense of the firm’s likelihood to have voted for (or against) any E & S proposals that were withdrawn because of others’ engagement.
In short, we know only what Vanguard has told us about its ESG-related behavior this proxy season. And while that is generally positive, it is also the very bare minimum.
