Prince Harry and Meghan Markle are entering the world of finance with progressive ethics in tow.
The couple, who relocated to the US in early 2020 after a public split with the British royal family, have become “impact partners” at Ethic, a New York-based firm that makes asset-management technology for sustainable investments.
The five-year-old ESG (environment, social, and corporate governance) investment firm was founded in 2015 by former UK and Australian bankers Jay Lipman, Doug Scott, and Johny Mair. It invites investors to create portfolios that “align personal values with financial goals.”
The Duke and Duchess of Sussex “share a lot of values with us, and we suspect, with many of you as well,” the $1.3 billion fund said in an Oct. 12 statement. “They’re deeply committed to helping address the defining issues of our time—such as climate, gender equity, health, racial justice, human rights, and strengthening democracy—and understand that these issues are inherently interconnected.”
The Sussexes have struck big-ticket deals with tech giants Netflix, Spotify, and Apple over the last year. They were introduced to the Ethic founding team via friends, have investments managed by the company, and are investors in the firm itself.
“We believe it’s time for more people to have a seat at the table when decisions are made that impact everyone,” the couple said in a statement. “We want to rethink the nature of investing to help solve the global issues we all face.”
Building on the Meghan-Harry brand
Sustainable investing has skyrocketed in popularity in recent years, even as critics have questioned its effectiveness. It’s an area of finance that seems well-aligned for a couple that’s vocal about progressive issues, from mental health to representation.
Yet the public nature of the Sussexes’ positions has invited skepticism, and their interest in sustainable investing is no exception. After all the famous couple live in a massive mansion in California and travel often by private jet.
A host of celebrities have been dabbling in impact investing. Climate change champion Leonardo DiCaprio is restoring Belize’s natural resources, Matt Damon has started an NGO to raise awareness about clean water initiatives in Africa, and actress Jessica Alba runs a $11 billion ethical beauty brand Honest.
In an exclusive interview with the New York Times, Markle said that while growing up, investing was not dinner table conversation. The couple say they hope being in the public eye will help them make ESG investing more accessible for the younger generation.
The ESG opportunity
The market for ESG topped $35 trillion last year, representing nearly 36% of all professionally managed assets globally.
ESG funds significantly outperformed the broader market during the first year of Covid-19. After all, it was a year of rapid green change given that car usage dipped, long-haul holidays went out the window, and deliveries were being made in bulk to people holed up at home.
However, experts have warned the bull run may not last. There’s the danger of “greenwashing“—when a company projects that it is more environmentally sound than it is—to get funding. And the rules and regulations for the sector are not standardized, data on returns are inconsistent, and multiple ratings offer conflicting scores, making it hard to truly assess if businesses are delivering on their goals.
That led BlackRock’s former chief investment officer for sustainable investing, Tariq Fancy, to refer to ESG in a viral post as a “dangerous placebo.”
Either way, it’s just the prescription the celebrity royals ordered.