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How Vanguard Funds Harm And Fuels Extractive Industry

Vanguard’s Empty Promises.

Pennsylvania based asset manager, Vanguard, is the world’s second largest asset manager, with over $8 trillion in assets under management. Vanguard is referred to as a “universal owner,” with ownership stake in over 10,000 corporations. The financial institution dominates market environments and consequently has the ability to set industry norms. Asset managers have largely ignored calls for divestment from extractive industries. Asset managers, like Vanguard, have failed to include a robust racial and environmental justice orientation in their business practices. In turn, they flood extractive industries with capital. Industries like the carceral and fossil fuel industries use those investments to extract from low-income and BIPOC communities. Despite Vanguard’s public commitments, in the wake of a national uprising against racialized police violence and an ever present climate crisis, our analysis shows that Vanguard has not taken adequate steps to move the needle toward racial or environmental justice.

This report (1) critiques Vanguard’s governance practices and charitable giving vehicles and (2) highlights how Vanguard’s loose definitions of social justice and inadequate screening tools allow capital to be deployed to extractive industries via funds touted as both environmentally and socially responsible. While frontline BIPOC communities have been demanding divestment from extractive industries for years, Vanguard’s investment vehicles remain financial drivers of harmful industry.

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