Morningstar recently released a report going over how the 3 major fund providers voted on different ESG topics within publically traded companies. Blackrock and State Street voted in favor of more ESG issues than Vanguard.

In this video, I'll go through why Vanguard voted against more Environmental, social, and corporate governance issues compared to their peers.

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In the context of publicly-traded companies, shareholders often own a part of the company through their investment in stocks. As owners, they have the right to vote on certain issues at the company's annual general meeting (AGM) or special meetings. These issues could be about corporate governance matters like electing members to the board of directors, executive compensation, mergers and acquisitions, corporate policy changes, or changes to the company's charter.

However, not all shareholders can or want to attend these meetings in person. Therefore, they are given the option to vote by proxy, i.e., assign their voting rights to a representative who can vote on their behalf. This representative is often the company's management but it could also be another entity or individual.

The company typically sends out a "proxy statement" before the meeting, which outlines the issues that will be voted on and provides background information to help shareholders make informed decisions. The shareholders fill out a "proxy card" to indicate their voting preferences. Alternatively, many companies also allow proxy voting to take place electronically over the internet. This is usually done through whichever brokerage you use.

It's important to note that proxy voting is a significant way for shareholders to influence the direction and policies of the company. In some cases, large institutional investors like pension funds or mutual funds may use their considerable voting power to sway the outcomes in a direction they believe will be beneficial to their interests.

Proxy voting is a form of voting whereby shareholders in a company delegate their voting rights to another individual or entity. The designated individual, known as a "proxy," can exercise voting rights on behalf of the shareholder at corporate annual meetings or at any other meeting where shareholders vote. This happens when you invest in a fund that holds hundreds or even thousands of stock. The fund manager like Blackrock, State Street, Fidelity, or Vanguard, will case votes on your behalf based on certain guidelines they've laid out ahead of time.

ESG (environmental, social, and corporate governance) has been a hot topic over the past few years. Society has been pushing companies to become more friendly in this area. Unfortunately, the positive outcome of pushing things like ESG scores on publically traded companies hasn't played out the way some of them have hoped.

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Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money.

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