The move is fueled by the firm’s decision to maintain freedom while offering investment options to its clients. Credit: AndreasAux from Pixabay.

Mutual fund management giant Vanguard Group has decided to end it ties with Net Zero Asset Managers (NZAM), an investment-industry initiative formed to handle climate change.

NZAM supports fund companies to achieve net zero emission targets by 2050 and restrict the surge in temperature across the globe. Vanguard joined NZAM in 2021.

Go deeper with GlobalData

Premium Insights

The gold standard of business intelligence.

Find out more

The move is driven by the firm’s decision to maintain freedom while offering investment options to its clients.

It is also aimed at providing clarity to the company’s investors in terms of index funds, which offer access to stock and bond markets at reduced cost.

Vanguard currently invests around 80% of its clients’ assets through index funds.

The firm’s departure from NZAM is seen as a major setback to endeavours that promote industries to pull back from fossil fuels usage.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Until 9 November this year, the initiative has 291 signatories with around $66tn in assets under management, reported Reuters.

In a statement, Vanguard said: “Such industry initiatives can advance constructive dialogue, but sometimes they can also result in confusion about the views of individual investment firms.

“That has been the case in this instance, particularly regarding the applicability of net zero approaches to the broadly diversified index funds favored by many Vanguard investors.

“Therefore, after a considerable period of review, we have decided to withdraw from NZAM so that we can provide the clarity our investors desire about the role of index funds and about how we think about material risks, including climate-related risks—and to make clear that Vanguard speaks independently on matters of importance to our investors.”