The world's largest mutual fund provider is pushing companies to disclose how climate change could hurt their business
- Vanguard, the world's largest provider of mutual funds, is pushing companies to disclose the risks climate change poses to their business.
- Vanguard is a top shareholder in many large US corporations, so it can impact how companies are run at high levels.
- It's a sign that investors are taking climate risks seriously.
Vanguard's push is yet another sign that the investment community is taking climate change seriously."Given our duty to steward our shareholders' long-term investments, we must be aware of this risk, where it's most relevant, and ensure companies are addressing it in an appropriate manner," Main said.Generation Investment Management, a firm cofounded by former Vice President Al Gore and David Blood, has a similar outlook. Blood previously told Business Insider that thinking in terms of sustainability is "a terrific risk-management tool."
"If you're more holistic in terms of how you are analyzing management quality and business quality, chances are better - although not guaranteed - that you will be able to identify the types of risk that can hurt a company badly," Blood said.
Glenn Booraem, the principal on Vanguard's investment stewardship team, told Reuters that the fund's support for disclosing climate risks isn't a matter of "ideology," but rather economics."To the extent there are significant risks to a company's long-term value proposition, we want to make sure there is long-term disclosure of those risks to the market," Booraem said.
Despite that stance, Vanguard has so far failed to back climate-change resolutions that shareholders put forward at 14 companies and has only backed two, as the Financial Times noted in October.
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