FirstFT: Vanguard adds to ESG backlash

By Editor On Aug 29, 2023

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Vanguard’s support for environmental and social shareholder resolutions dropped sharply during the 2023 proxy season as it echoed other asset managers by criticising such proposals as “overly prescriptive”.

Vanguard, which manages $7.2tn of assets, backed just 2 per cent of such proposals, compared with 12 per cent in 2022, the company said in a report on its voting record published yesterday.

Last week BlackRock, the world’s largest money manager, reported it voted in favour of roughly 7 per cent of all environmental and social proposals in the 12 months to June, down from last year when it backed 22 per cent and 2021 when it voted in favour of nearly half.

Together, BlackRock, Vanguard and State Street control between 15 per cent and 20 per cent of most large US public companies through their huge index-tracking products and investment funds so their influence is enormous. Here’s more on the growing ESG backlash.

More financial news: Goldman Sachs has agreed to sell one of its personal financial management divisions to Creative Planning, an investment and retirement adviser.
Alternative investing: Fund flows into private equity, hedge funds, real estate and credit — so-called alternative investments — have slowed down this year, according to data provider Preqin.

Here’s what else I’m keeping tabs on today:

Results: Best Buy and discount chain Big Lots are the latest retailers to report earnings. HP, Box and JM Smucker also report results.
Economic data: The Case-Shiller index’s 20-city composite is expected to show home prices fell 1.3 per cent from a year ago in June, according to a Refinitiv poll of economists. We also get job openings data from the US Bureau of Labor Statistics and an update on consumer confidence from the Conference Board.
Apple in court: The tech giant will be contesting a $2bn mass lawsuit at London’s Competition Appeal Tribunal in which it is accused of hiding defective batteries in millions of iPhones by “throttling” them with software updates.

Five more top stories

1. Country Garden, one of China’s largest property developers, has asked for a grace period on a renminbi bond maturing next week. The request came a day after shares in Evergrande, the world’s most indebted developer, plunged 90 per cent after a year and a half suspension. The request is another sign of stress in China’s ailing property sector.

2. UK flight disruptions will take “days” to resolve, according to British transport secretary Mark Harper. Thousands of passengers were stranded yesterday after a “technical issue” led to the cancellation of hundreds of flights on one of the busiest days of the year. Here’s the latest on the transport chaos in the UK.

3. Exclusive: The EU is facing a battle to secure an additional €86bn to help finance Ukraine’s war effort over the next four years. The request has divided member states and led to calls for reductions and a longer approval timetable, according to people involved in talks. The debate has become a pivotal test of western resolve over Ukraine.

War in Ukraine: Ukrainian forces have penetrated Russian defences at Robotyne, a strategic settlement that could open the way for advances further south.

4. Spain’s regional football bosses have demanded that Luis Rubiales resign after he kissed Women’s World Cup winner Jenni Hermoso. This comes just hours after prosecutors opened a preliminary inquiry into the case and as his mother said she was going on a hunger strike to support her son. More on the scandal’s latest dramatic turn.

5. Donald Trump’s federal criminal trial on alleged election interference has been set for March 4 after a judge rejected his efforts to delay it until after next year’s presidential election. The date is one day before “Super Tuesday”, when Republicans in more than a dozen states are expected to vote for their party’s presidential nominee. Here’s why the former president has been trying to push back the legal proceedings.

News in-depth

The fortunes of downtown areas in the US have diverged since the onset of the coronavirus pandemic, researchers at Georgetown University and the University of Chicago have found. Using smartphone data, housing prices and other factors from 274 US cities economists identified one class of city that had been restored to vibrancy and another that was empty and forlorn, with serious implications for real estate values and local tax receipts.

We’re also reading . . .

El Niño: The weather event is forecast to bring months of extreme heat to parts of south Asia and Central America, further straining global food output and stoking inflation.
Europe’s new banks: Groups such as N26, Revolut and Monzo had high hopes of disrupting staid retail banking empires, but they are now struggling with profitability and culture issues.
How to start your day like Jamie Dimon: Associate professor at the London School of Economics Grace Lordan studied the morning routines of many in business, including the chief executive of JPMorgan. Here’s what she found.

Chart of the day

As China slides into deflation consumers are thinking hard about how they spend their money. Consumers are putting off big purchases like houses, cars and trips abroad. FT reporters in China analyse what this means for the world’s second-largest economy.

Take a break from the news

. . . and drool over this two-tone chocolate cake, one of many reimagined plant-based recipes from Philip Khoury. Harrods’ head pastry chef sat down with — and baked for — the FT’s Ajesh Patalay to discuss his debut cookbook A New Way to Bake.