Passive investors, the giants of the investing world, have been facing fierce criticism from both sides of the debate over environmentally responsible investing. One of the biggest players has decided to throw in the towel. - Axios

Why it matters: One of the great successes of the past few years has been NZAM, the Net Zero Asset Managers Initiative. Its 291 signatories, representing $66 trillion of assets under management, have all signed on to a vision of a zero-carbon future.

• Now, however, one of the biggest members, Vanguard, has withdrawn from the group.

The big picture: Vanguard, more than any other investing giant, is proudly dedicated to passive investing - the idea that it's a better idea over the long haul to just buy an entire index than it is to try to pick and choose individual stocks to buy and sell.

• By their nature, passive investors can't divest from carbon-intensive companies. That's a big problem, for environmentalists who have been loudly campaigning against Vanguard's fossil-fuel investments.

The other side: Joining groups like NZAM carries connotations distasteful to many Republicans, who criticize the members of such groups as being beholden to "woke capitalism."

• Vanguard has been on the receiving end of relatively few of those complaints, but BlackRock, another mostly-passive asset manager, is regularly attacked by Republicans. On Thursday, Arizona said it withdrew $543 million from BlackRock money-market funds, for instance.

The bottom line: BlackRock CEO Larry Fink relishes the fight over environmental responsibility. Most other U.S. asset managers don't.