Vanguard's approach to ESG

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With more than 30 million investors globally looking to us to both safeguard and grow their investments, we think about risks and opportunities in the context of delivering value to investors. This attitude shapes our approach to environmental, social and governance (ESG) considerations, which is multifaceted and founded on three pillars.

Product construction

Products with explicit ESG components

Our range of ESG index funds employs exclusionary screening, meaning exposure to certain companies is prohibited, owing to their failure to meet a set of independently established ESG standards.

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Portfolio management

Portfolio management ESG integration

Financially material ESG information is measured systematically within the investment process across our range of funds. ESG risk ratings are assigned to companies and no investment opportunity is off limits.

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Investment stewardship

Oversight of portfolio companies

Our index funds are long-term owners of companies and we seek to positively influence corporate behavior through our investment stewardship programme, which focuses on four key principles.

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Take the controversy out of your investments

Vanguard takes a thoughtful and deliberate approach to developing new products. We aim to deliver value through the quality of our funds. Vanguard advocates broadly diversified, low-cost portfolios of equities and bonds. The only difference is that with these, we aim to remove the companies that don't live up to the beliefs of our ESG investors.

Each of our ESG index funds has different exclusionary screens depending on the index they track. As an example, a developed world all-cap ESG index fund tracking a particular ESG index might exclude: companies in violation of UN Global Compact principles, producers or manufacturers of adult entertainment, alcohol, firearms, fossil fuels, gambling, nuclear energy and tobacco.

ESG Global All Cap UCITS ETF

Total Assets

As at 30 Nov 2021

$183.40 M

NAV

As at 01 Dec 2021

$5.46

ESG Global Corporate Bond UCITS ETF

Total Assets

As at 30 Nov 2021

CHF 49.40 M

NAV

As at 01 Dec 2021

CHF 5.05

ESG Developed World All Cap Equity Index Fund

Total Assets

As at 30 Nov 2021

$3.24 B

NAV

As at 01 Dec 2021

$198.74

ESG Emerging Markets All Cap Equity Index Fund

Total Assets

As at 30 Nov 2021

$320.90 M

NAV

As at 01 Dec 2021

$123.83

*Source: Vanguard. Data as at January 2021. The Ongoing Charges Figure (OCF) covers the fund manager’s costs of managing the fund. It does not include dealing costs or additional costs such as audit fees.

Integrating ESG in active funds

Across our active funds and index fixed income products, we incorporate the assessment of financially material ESG information in the investment research and decision-making process. The practice is most visible in our range of actively-managed funds, with different protocols for in-house and externally-managed products, as well as equity and fixed income funds.

Discover our range of active funds

Oversight of portfolio companies

A long-term perspective is central to our approach to stewardship. Through multiple channels we promote leading corporate governance practices, which we believe will deliver long-term value to all investors.

Advocating

We advocate with groups of constituents in the market to inform and articulate our governance.

Engaging

We have ongoing, direct dialogue with portfolio companies and other stakeholders about corporate governance.

Voting

We vote the Vanguard funds' proxies in support of good governance.

Important risk information:

The value of investments, and the income from them, may fall or rise and investors may get back less than they invested.

For further information on risks please see the “Risk Factors” section of the prospectus on our website.