Climate change questions don't get more fundamental than this one: How much time is left to act before it is too late?
Right now the difficulty of answering that question is showing up in a place where many individuals are heavily invested in getting the answer right: The index funds responsible for meeting millions of Americans personal financial goals, from saving for a house, to a child's education, and a secure retirement.
Before he died, Vanguard Group founder Jack Bogle said one of the biggest issues the index fund would face in the future is its societal influence. Specifically, he meant the need to vote proxies on complex issues such as sustainability at annual meetings held by every publicly traded company and on behalf of so many individual fund shareholders.
BlackRock, the world's largest asset manager, and Vanguard Group, the creator of the index fund, manage more than $11 trillion combined. Just in ETFs, they manage roughly $2.5 trillion. And their market influence continues to grow: Vanguard has attracted roughly $1 trillion in the past three years alone.
"Larger mutual funds companies, like Vanguard, Fidelity, BlackRock and State Street Global Advisors, can move the market," said Mindy Lubber, CEO and president of Ceres, a nonprofit organization that works with big investors and companies on sustainability. "They can take a shareholder resolution from 10 percent to 40 percent."
In 2017 both companies voted to require ExxonMobil to produce a report on climate change, a watershed moment showing what can occur when index funds punch their weight in proxy voting.
Yet shareholder advocates say there have not been nearly enough of those ExxonMobil vote moments.