Casey Harrell, the campaigner whose sustained pressure was instrumental in pushing BlackRock Inc. to act against climate change, approaches his work as if locked in a race against time. That was true even before the 42-year-old environmental activist was diagnosed last year with amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease.
Harrell’s latest effort, focused on Vanguard Group Inc., is likely to be his last.
“My diagnosis has put me on the ALS clock, which is a different clock than most people live,” said Harrell, who resides in Oakland, California, with his wife and young daughter. He works as a senior strategist for the Sunrise Project, an Australian nonprofit that fights against climate change. “I feel really connected to the urgency that others feel around a need to act on climate now, not by 2050, in a real visceral way.”
The result is a determination to do something about Vanguard, which ranks only behind BlackRock among the world’s largest money managers, overseeing about $7.2 trillion of assets. He’s working with non-governmental organizations, including Sierra Club, Friends of the Earth and Amazon Watch, to raise awareness about the fund manager’s climate record. The plan is to enlist Vanguard’s massive base of individual investors in the campaign, getting them to express their disquiet directly to the firm and fund advisers. That way, Harrell hopes to make climate change an unavoidable daily topic of conversation with which Vanguard has to reckon.
There’s plenty to say. The asset manager, whose late founder John Bogle invented index investing, is the biggest institutional investor in coal companies, according to Urgewald, an environmental nonprofit in Germany. Vanguard recently held $86 billion of the debt and equity of companies involved in thermal coal, compared with $84 billion held by BlackRock.
It’s also the largest investor in the 350 companies that Global Canopy, a U.K. nonprofit, has identified as having the greatest exposure to tropical deforestation in their supply chains, through sourcing items such as palm oil and timber. And that’s only part of the problem. Beyond its stakes in climate-destroying companies, Vanguard is widely criticized for not using its influence to push for lower emissions, snubbing shareholder climate resolutions and votes against recalcitrant boards.
“Vanguard cares deeply about the impact of climate risk and welcomes input from all parties on how we can best address it,’’ said John Galloway, global head of investment stewardship at the Valley Forge, Pennsylvania-based firm. “Core to our mission is a fiduciary duty to maximize long-term investment returns for our shareholders, and climate change and other ESG risks are critical factors that impact the ability of companies into which our funds invest to create that long-term value.''
As a predominantly index-based investor, divestment of carbon-intensive companies isn’t an option for Vanguard, Galloway said. Engaging with companies is the best way to encourage positive change, with proxy voting seen as the “tip of the iceberg,’’ he said.
“Proxy voting records are often misperceived or misused,’’ Galloway said. “As much as we care about climate change, simply because a proposal has the word climate in the title doesn’t mean, that in our careful analysis, we will decide that the proposal is in the right long-term interests of shareholders.”
It’s been almost three years since Harrell started what became known as BlackRock’s Big Problem, a network of organizations pressing the New York-based firm to divest from fossil-fuel companies, including coal, in its actively run funds. For its passive funds, the campaign has been pushing BlackRock to support climate resolutions and vote against directors at laggard companies.
BlackRock’s Big Problem has held dozens of protests outsides the company’s offices from Brussels to San Francisco, has arranged for people indigenous to the Amazon rainforest to speak at the money manager’s annual shareholder meeting and has circulated reports on the firm’s climate record to some of its biggest clients.
Harrell insists he isn’t done with BlackRock. That’s even after the asset manager has pledged to put climate change concerns at the center of its strategy.