Heroic Act of the Week: March 13, 2023: Tim Buckley

Via Solari.com

It may be too early to call out a hero, but we will mention a noteworthy heroic act of some importance. The person behind the “Heroic Act of the Week” is Tim Buckley, CEO of Vanguard, the second largest global money manager. Buckley’s first heroic act was to withdraw Vanguard from the Net Zero Banking Alliance at the UN last December. His second remarkable act in February was to point out that ESG investing as currently promoted is not sensible. The Wall Street Journal described this as follows:

“‘Our research indicates that ESG investing does not have any advantage over broad-based investing,’ Mr. Buckley said in a recent interview with the Financial Times. Matching word to deed, his comments came after he had withdrawn his firm from the $59 trillion Net Zero Asset Managers initiative, an organization that is part of the $150 trillion United Nations-affiliated Glasgow Financial Alliance for Net Zero. Both alliances are committed to restricting their investments over time to companies that are compliant with the Paris Agreement’s objective of net-zero greenhouse gas emissions by 2050. Mr. Buckley claims the financial world, swept up in climate-change fervor, can’t make such commitments without reneging on its fiduciary duties.”

Asset managers should encourage and seek excellence in governance and management and leave the detailed execution necessary to optimize the needs of wide and complex economic enterprises to the people responsible for managing them. As one great asset manager we know once said, excellent management means “leading to appropriate decision making.” Mr. Buckley clearly understands this. He also understands the legitimate concern of the growing number of State Treasurers who are pulling pension assets from managers who do not.

The full article is available here.

Published by markskidmore

Mark Skidmore is Professor of Economics at Michigan State University where he holds the Morris Chair in State and Local Government Finance and Policy. His research focuses on topics in public finance, regional economics, and the economics of natural disasters. Mark created the Lighthouse Economics website and blog to share economic research and information relevant for navigating tumultuous times.

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