Vanguard Makes SRI Screening Official

For the past two years, activists have implored large fund companies to divest holdings in securities linked to human rights abuses. Now Vanguard has decided to make socially responsible investing screening official.

In a fund filing this week, Vanguard asks its investors to ignore ethical investing recommendations by Investors Against Genocide, telling them that it already applies SRI screening even though mutual funds “are not optimal agents to address social change.”

The activists say that isn’t good enough because Vanguard still owns $305 million in stocks in Chinese oil companies that do business in the Sudan, where genocide has occurred. But Vanguard spokeswoman Linda Wolohan says that is not true, that Vanguard only owns moderate amounts of such stock.

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