Dear William McNabb III, CEO of Vanguard,
I am writing to ask that you institute a Deforestation and Land Grab-Free investment policy across all of your investment vehicles. Specifically, I am concerned that Vanguard holds billions of dollars worth of shares in destructive palm oil companies. Vanguard’s continued financing of palm oil’s worst offenders therefore contributes to far-reaching environmental and social problems and exposes both Vanguard and its clients to reputational and financial risk.
Palm oil, used in over half the food and cosmetics on our shelves, as well as in biofuels in many countries, is the single fastest growing driver of deforestation and displacement of forest-dwelling indigenous communities across the tropics, and is a major driver of climate change. Deforestation is responsible for some 10-15 percent of global greenhouse gas emissions – more than the emissions from all the cars, trucks, trains, and buses in the world each year combined. While palm oil production damages the environment as a whole, it has a particularly acute impact on the human rights of marginalized people in the global south, through coercive takeovers of their lands, well-documented labor abuses, and far-reaching impacts on cultures and livelihoods. As such, it is neither sustainable nor just.
As the palm oil sector’s environmental and social impacts become more widely recognized, investments in these destructive palm oil companies are becoming increasingly risky.
Many banks and institutional investors are increasingly adopting policies to prevent financing companies that operate in ways that are illegal or unethical – and I believe Vanguard should do the same. The Norwegian Government Pension Fund, for example, excludes most of the world's largest palm oil companies – including companies held by Vanguard – because they fail to meet the fund’s ethical criteria.
I believe Vanguard should follow suit and commit to a Deforestation and Land Grab-Free investment policy that entails four pillars of responsibility: to publicly disclose its palm oil holdings, commit to a deforestation-free, land grab-free investment policy, exclude companies that do not meet the criteria of the aforementioned policy, advocate with the companies it owns to repair social and environmental harm; and to re-invest in a more sustainable future.
Thank you for your consideration.