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Walden to Vanguard: Pushing Exxon on Climate Change Isn't Enough

Can a social activist fund target a passive investor?

That's what appears to be happening at index fund behemoth Vanguard. Environmental, social and governance firm Walden Asset Management has submitted a shareholder proposal asking the $4.4 trillion index fund giant to review its voting practices related to climate change issues and issue a report on the subject.

The measure is scheduled to come up for consideration at Vanguard's 2017 shareholder meeting, scheduled for Nov. 15 in Scottsdale, Ariz. Walden is permitted to submit a proposal for consideration because it participates in two Vanguard funds, the 500 Index Fund and Total Stock Market Index Fund.

And the proposal up for a vote in November is nonbinding, which means Vanguard isn't obliged to do anything about it even if it gets a strong vote of support. Nevertheless, Walden's director of engagement, Timothy Smith, argues that the measure is designed to drive Vanguard to vote more proactively on important social and environmental issues. Smith said he hopes that...