Sustainable Finance Lobbying Overview: Vanguard has stated some top-line support for sustainable finance while taking more mixed positions on specific sustainable finance policies.

Top-Line Messaging on Sustainable Finance Policy: In 2021 Vanguard joined the Net Zero Asset Managers initiative, supporting the goal of achieving net zero emissions by 2050 or sooner. In December 2022, however, Vanguard withdrew from the initiative. Vanguard has stated some support for government action to address climate-related financial risks.

Position on Regulated Corporate ESG Disclosure: Vanguard appears broadly supportive of the need for regulated corporate ESG disclosure, while taking more mixed positions on specific disclosure proposals. In its 2021 Investment Stewardship semiannual report Vanguard voiced support for Hong Kong Stock Exchange rules that would enhance ESG reporting requirements for listed companies, and in a 2021 letter to the Securities and Exchange Commission (SEC) Vanguard stated support for regulated corporate ESG disclosure and called for aligning frameworks with the TCFD. However, in 2022 comments on the SEC’s proposed climate disclosure rule, Vanguard voiced concern that some aspects of the proposal were “overburdensome,” including Scope 3 disclosure requirements. Vanguard expressed similar concerns about Scope 3 disclosure requirements in comments on the International Sustainability Standards Board’s Sustainability and Climate Disclosure drafts in 2022.

Position on ESG Standards/Labels: In comments to the SEC in 2020, Vanguard did not support extending the Names Rule and its 80% investment policy to funds with ESG-related names but did support a requirement for these funds to explain the terms used in fund names to investors. Vanguard does not appear to have commented on the Commission’s 2022 proposed amendments to the Names Rule. In comments to the UK Financial Conduct Authority (FCA) in 2022, Vanguard welcomed efforts to introduce an investment product labeling system but did not support the introduction of a ‘not promoted as sustainable’ label, as “investors might recognize this label negatively.”

Position on Incorporating ESG Factors Into Investor Duties: Vanguard took mixed positions on Trump administration rollbacks to sustainable investing. In comments submitted to the SEC in 2020, Vanguard voiced support for a rule that would limit shareholder rights and increase the participation threshold. However, it opposed Department of Labor rules that would limit fiduciaries’ ESG investing and voting on ESG issues, and in 2021 supported the Biden administration’s proposed reversal of the rules.

In response to the European Commission in 2020, Vanguard supported weaker policy around disclosure on investor ESG impacts under the Sustainable Finance Disclosure Regulation (SFDR). In 2022 comments to the FCA, Vanguard stated support for harmonization of the UK Sustainability Disclosure Requirements (SDR) with the SFDR, but cautioned against an overly prescriptive disclosure framework. In separate comments to the FCA in 2022, Vanguard did not support including ESG funds as a default option for pension funds.

Industry Association Governance: Vanguard has not disclosed its membership to trade associations or any details of indirect influence governance.