Vanguard sets human-rights policy
Vanguard Group Inc., the largest US manager of stock and bond mutual funds, has introduced criteria to determine whether companies meet human-rights standards.
The policy, developed in the past six months, is designed to identify companies whose "direct involvement in crimes against humanity or patterns of egregious abuses of human rights would warrant engagement of potential divestment," the Valley Forge, Pa.-based company said in a letter to shareholders that was filed Tuesday with the Securities and Exchange Commission. Fund trustees retain final say on whether a fund divests any investment, Vanguard spokesman John Woerth said yesterday.
Investors Against Genocide, a Boston-based human-rights group, has been pressuring mutual fund companies to adopt socially responsible investment practices. The group succeeded in placing proposed investing guidelines on the agenda for 30 selected Vanguard funds at the company's July 2 annual shareholder meeting. Vanguard's trustees have recommended shareholders reject the motions in light of the new companywide policy.
"This action by the board of trustees of Vanguard is a clear affirmation that fiduciary responsibility and ethical responsibility are not mutually exclusive," Investors Against Genocide chairman Eric Cohen said in a statement yesterday.
Cohen said his group will discuss with Vanguard whether to withdraw the 30 shareholder proposals.