The Vanguard Group, one of the world's largest asset management firms, has surpassed its competitor BlackRock as the planet's leading investor in fossil fuels, according to a report released Thursday.
The report—published by the German environmental and human rights group Urgewald—shines a spotlight on the 6,500 finance firms whose combined holdings of bonds and shares in oil, gas, and coal companies are valued at $3.07 trillion. That's more than the gross domestic product of any nation on Earth save the U.S., China, Japan, or Germany.
Vanguard and BlackRock—the "Terrible Two" of finance—together account for 17% of all institutional investment in fossil fuels, with the former holding $269 billion in coal, oil, and gas investments and the latter $263 billion.
According to the report, Vanguard holds bonds and shares in 200 fossil fuel companies, with its largest single investment—$34 billion—in ExxonMobil.
"If it is bad for the environment, it is bad for retirement," Doug Norlen of the green group Friends of the Earth said in a statement. "Vanguard's retirement schemes are built on investments that jeopardize our future."
As the report states:
Vanguard's CEO, Tim Buckley, has made abundantly clear that he has no intention of putting restrictions on investments in climate-destructive business models. Consequently, Vanguard dropped out of the Net-Zero Asset Managers Initiative in December 2022.
BlackRock is a member of the Net-Zero Asset Managers Initiative and claims to be a sustainability leader, but its fossil portfolio barely differs from Vanguard's. Despite the fact that BlackRock adopted [its] first coal policy in 2020, it remains the world's largest investor in companies developing new coal plants, mines, or coal infrastructure.
"At a time when the [United Nations] warns that greenhouse gas emissions must be cut in half by 2030, pension funds, insurers, mutual funds, and asset managers are still gambling away our future by sinking money into the world's worst climate offenders," Urgewald energy and finance director Katrin Ganswindt said in a statement. "By publishing our research online, we want to empower clients, regulators, and the public to hold these institutional investors accountable."
Earlier this month, a sister report—Banking on Climate Chaos—was published by a coalition of groups including Urgewald and showed that the world's 60 largest private banks have provided $5.5 trillion in financing to the fossil fuel industry, belying their net-zero and other pledges that activists have called "greenwashing."
The report was published the same day as 16 Quakers and other climate activists ranging in age from 22 to 84 were arrested during a protest organized by Vanguard SOS—an international campaign launched by civil society groups, grassroots activists, and financial experts—at Vanguard's headquarters west of Philadelphia in Malvern, Pennsylvania.
"This is an 'all hands on deck' moment for addressing the ecological crisis," explained Frank Fortino, a member of the climate action group Extinction Rebellion Philadelphia who was arrested at the demonstration. "I'm here today because I feel that urgency and because we need Vanguard leadership to also feel that urgency."
