Info on Vanguard

Narrative

I mention Vanguard here only because it is widely used.  It does not offer transformative funds but it forms a baseline, a suite of green funds that can be compared to funds that use shareholder advocacy.  Vanguard is famous for its many index funds with low management costs.

The website says that the advisor of an actively managed fund will engage with company management and vote proxies, but the details are not specified.  It appears that Vanguard’s primary influence consists of dropping a company from its holdings rather than conversing with company management or filing shareholder proposals.  Nowhere could I find any mention of advocacy for the environment, or of efforts to encourage the companies to take on improved environmental practices. 

Funds offered

Among so-called ESG funds, Vanguard offers the funds below.  The website comments that the index funds "exclude companies that do not meet certain ESG requirements."  By contrast, the actively managed funds look for companies with "leading or improving ESG practices," such as “a well-performing energy company that is thoughtfully navigating the transition from fossil fuels to sustainable sources.”

Among so-called ESG funds, Vanguard offers three actively managed mutual funds,

  • Global ESG Select Fund
  • Baillie Gifford Global Positive Impact Stock Fund
  • Global Environmental Opportunities Fund

Vanguard also offers one index fund,

  • FTSE Social Index Fund, indexed to FTSE4Good US Select

Vanguard also offers three ETFs, all indexed,

  • ESG U.S. Stock ETF
  • ESG International Stock ETF
  • ESG U.S. Corporate Bond ETF

Fees and Hassles

Ownership is remarkably convenient — a user who has set up online access to an account can make unlimited free transactions of Vanguard funds with a few clicks at the keyboard, even when withdrawing from an IRA to make a charitable donation.  No Medallion Signature Guarantee is required.  This convenience is very rare in the industry.

However, Vanguard does not prioritize environmental advocacy, and therefore is not considered further here.