There are two frameworks to consider when looking at environmental impact: personal and institutional. The Aston Martin that Prince Charles has been converting to run on wine and cheese instead of gas? That’s personal. The sustainable investing firm that his son and daughter-in-law are promoting? That’s a bit of both, especially as Prince Harry and Meghan Markle are putting their own money into the venture.
On Tuesday it was announced that the Duke and Duchess of Sussex are joining Ethic, a sustainable asset management firm in environmental, social and governance (ESG) investing, per The New York Times. Not only will Harry and Meghan be “impact partners,” promoting Ethic to others going forward, but as the company noted in its announcement, “they became investors in Ethic earlier this year and have investments managed by Ethic as well.”
What is ESG investing, exactly? It’s investing in funds that are focused both on financial return and larger societal impact, in areas such as climate change (environmental), human rights (social) and company leadership (governance). As Bloomberg notes, ESG investing is heating up, with somewhere in the ballpark of $35 trillion invested in these assets globally, but facing the same problems with greenwashing as other sustainable initiatives. Prince Harry and Meghan’s partnership with Ethic may help bolster the credibility of this firm in particular.
“Ethic runs screens on companies and sectors based on social responsibility criteria, including racial justice, climate and labor issues,” writes the New York Times’ DealBook. “Its user interface has more in common with the likes of Robinhood than traditional financial sites, and it has developed a new platform, ‘Sustainability for Everyone,’ which scores a person’s portfolio along different dimensions.”
Ethic, which was founded in 2015, currently manages $1.3 billion. In June, when the company passed the $1 billion mark, they said the number of portfolios they managed had doubled over the past year. Now with royal backing, the real growth opportunity begins.
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