Insights

Vanguard has an important role to play in safeguarding investors from material financial risks, including climate risk.

Climate change is a complex risk that presents physical, societal and economic challenges to countries around the world. In this second of two Q&As, John Galloway, global head of Vanguard Investment Stewardship, discusses Vanguard’s views on climate change and the role that effective stewardship can play throughout the energy transition to encourage companies to mitigate the financial threat to long-term investors.

Our investment stewardship activities are focused on addressing material risks, including environmental, social and governance (ESG) risks, at the companies held by our equity index funds. These risks, if not recognised and managed, can undermine long-term value for investors.

Advisers increasingly need to guide clients through the ESG landscape, but what are the key questions to ask to determine an investor’s goals?

Jan-Carl Plagge, Global Head of Active-Passive Portfolio Research, Investment Strategy Group, Vanguard Europe, examines the behaviour of US ESG equity funds and looks at whether they have different return characteristics from the broader market.

Fong Yee Chan, head of ESG strategy, Vanguard Europe, explores some of the different ways to approach ESG investing and looks at how Vanguard incorporates ESG considerations into its product design and investment processes.