A group of over 1400 Vanguard investors have written to the firm’s general counsel accusing it of violating its fiduciary duty by insufficiently managing the risks of climate change on its clients’ investments.

In the March 6 letter, the group of investors, led by Sierra Club Foundation Director Paul Rissman, criticized Vanguard for “falling behind its industry peers on mitigating climate risk” as well as for a “lack of attention to prudent proxy voting.”

The letter also claimed that the firm has violated its duty of loyalty by putting its own financial interests ahead of its investors, citing its withdrawal from the Net Zero Asset Managers initiative as an example of this.

The investors have called for Vanguard to escalate its engagement by adopting investment stewardship guidelines that prioritize decarbonization and communicating the “best-in-class industry standards.” Investors also urged the firm to shift its investment policies by adopting and applying “rigorous climate risk criteria across its entire portfolio.”

“Due to its egregious neglect of the portfolio risk of climate change relative to its peers, Vanguard is now the subject of negative publicity and could also fall victim to litigation for its neglect of climate risks…These distractions could result in additional performance issues over time,” the 1400 dissidents concluded.