The Vanguard Group claims neutrality in political affairs but in fact serves as the major financier of some of the world’s most anti-democratic companies.
One of the “Big Four” institutional investors in the world alongside BlackRock, Fidelity, and State Street, Vanguard’s holdings put it “into an extreme position of power” at many of the companies it funds and makes it “the voice that matters most among investors.” This concentration of power troubled even Vanguard’s late founder, John Bogle, who wrote in 2018 that “If historical trends continue, a handful of giant institutional investors will one day hold voting control of virtually every large US corporation.”
Among Vanguard’s almost US$9.3 trillion of assets under management are billions of dollars of stock in workers’ retirement savings plans, which the company uses to provide capital to thousands of companies that do business in every industry and country in the world. Among those where it is the largest shareholder are five companies from our list: Amazon, Blackstone, ExxonMobil, Meta, and Tesla. It is also a major shareholder in precarity platform companies like Uber, Delivery Hero, Lyft, and Gojek – all of whom are major players in a still-emerging industry built upon denying decent work. Effectively, Vanguard uses the deferred wages of workers to lend capital to the self-same companies complicit in undermining democracy at work and in societies globally.
Union members have challenged the company directly, including through action taken by coal miners who picketed Vanguard headquarters during a historic 23-month strike in 2022. Activists also called out Vanguard for holding shares in oil and gas companies that provide “enormous revenues to the illegal military junta” in Myanmar. The company is also a named shareholder in weapons manufacturers who, according to the United Nations, “risk being complicit in serious violations of international human rights and international humanitarian laws.
Despite holding billions of dollars in worker money, Vanguard recently abandoned one of its most public commitments to environmental and social governance. After signing on to the Net Zero Asset Managers initiative in 2021, it left in 2022, bowing to pressure from its far-right friends and provoking a backlash from more than 1,000 of its more climate-friendly clients.
Like its peers, Vanguard lets “corporate management spend the Worker Investors’ entrusted capital for political purposes without constraint” while forwarding “almost no proposals to mandate that corporations disclose their political spending.” In June, it cast a pivotal shareholder vote at Tesla in favour of approving an egregious US$56 billion pay package for Elon Musk, one of the world’s most prominent anti-democratic CEOs. Making matters worse, it uses shadowy Donor Advised Funds to allow investors to funnel funding to far-right, anti-democratic organisations that promote Islamophobia, intolerance of LGBTQ+ workers, white supremacy, and more.
