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Say what you do. Do what you say.

Say what you do. Do what you say.

| April 02, 2024

I was reading this article (https://www.esgtoday.com/australia-court-finds-vanguard-guilty-in-greenwashing-suit/) with some interest. A federal court in Australia found Vanguard Investments Australia guilty of making misleading claims about one of its ESG funds. It seems that the fund in questions held companies with fossil fuel activities.

I am not a big fan of labeling behavior and it should be noted that Vanguard self-reported this issue. At the same time it is important to say what you are going to do and do just that. It is challenging enough in the ESG industry with many different definitions of just what ESG is without this type of behavior muddying the waters.

An investment that states it has no fossil fuel holdings would be well-served to make sure it does not have those holdings before making such a statement. And it would be prudent to have procedures in place to constantly monitor this. I would think in this day and age of computers and data scrubbing, this should be relatively easy.

It will be interesting to what conclusions are arrived at in August during the "penalty" phase as this might signal how serious this issue is or isn't.