Aimed at portfolio companies and boards, Vanguard's "Climate risk governance: What Vanguard expects of companies and their boards" articulates a 3-pronged board climate oversight effectiveness formula consisting of climate competency, risk oversight and mitigation, and risk disclosure, accompanied by sample climate-related engagement questions, suggested risk oversight and mitigation "best practices," and material risk and risk mitigation disclosure considerations. As is consistent with its other investment stewardship perspectives, Vanguard emphasizes direct engagement in lieu of proxy voting to effect positive change and its general lack of support for overly prescriptive proposals.
Relatedly, Vanguard's "Votes on selected climate-related shareholder proposals" explains why the funds have supported or opposed certain specific climate risk disclosure proposals this proxy season. The "case studies" add helpful color to its climate risk governance commentary and demonstrate a company-specific approach to its evaluation of these shareholder proposals.
See also "How Vanguard addresses climate risk" providing an overview of how Vanguard addresses climate risk as an investor, an investment provider, and a company, and its "Why climate change matters to long-term investors" concerning the implications of climate risk for long-term investors. Access additional information & resources on our Institutional Investors page. This post first appeared in the weekly Society Alert!