News that Prince Harry and Meghan, the Duchess of Sussex, have a new role as “impact officers” at ethical fintech firm Ethic comes at an awkward time. Just a day after the announcement, data revealed U.S. investors are the world’s least interested in ethical investing.
Just 64% of U.S. investors used ESG (environmental, social and governance) factors when making an investment decision last year, according to a survey conducted by Royal Bank of Canada Global Asset Management (RBC GAM).
By comparison, over three quarters of Asian investors and 94% of Europeans considered such ethical issues when investing their money. And while their rates are rising, the percentage of investors considering ESG in the U.S. has fallen consistently over the last three years.
Donald Trump has a lot to answer for, says Melanie Adams, head of Corporate Governance at RBC GAM. The Trump administration barred retirement and pension plans from considering ESG factors when selecting investments, a decision that is only now being contested. “There was a big pullback during the Trump administration,” says Adams.
But, regardless of Trump, data shows a quarter of U.S. investors expect ESG portfolios to underperform their non-ESG counterparts. Ethical investments, they believe, would make less money. Anyone investing for maximum profit would therefore have to put their money into non-ESG stocks like oil and gas.
None of this bodes well for Harry and Meghan, who not only invested in Ethic earlier this year but also have their own managed portfolio with the New York-based startup, where, according to its marketing materials, “all investing is sustainable investing.”
Actor and venture capitalist Ashton Kutcher is also an investor in Ethic.
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The size of Harry and Meghan’s portfolio at Ethic is unknown, but the average account there is believed to be around $2 million, and the average investment during its series B funding round in March was $4.1 million. The firm manages a total of $1.3 billion between fewer than 1,000 clients. (Ethic did not respond to requests to verify these figures.)
Ethic invests according to each client’s preferences. Among the 19 issues that new investors pick from when signing up are things like “animal welfare,” “climate change,” “LGBTQ justice,” and “corporate diversity and inclusion.”
An Ethic spokesperson said preferences like these define each client’s portfolio. “We allow our clients to choose the environmental, social and governance issues that are most important to them and then help them create custom portfolios based on their preferences–not ours,” a spokesperson told the Telegraph.
Many of these issues chime with Harry and Meghan’s goals. In a joint opinion piece for The Washington Post, the Duke and activist Reinhold Mangundu argued against plans to drill for oil and gas in the Okavango River Basin. “We believe this would pillage the ecosystem for potential profit,” they wrote.
The Okavango River Basin in Botswana.
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However, these issues are out of sync with the wider investment community. Most ESG-tied investments are made towards anti-corruption, cyber-security and climate change, in that order, with the latter dropping one place since the same RBC GAM survey was conducted a year ago.
The U.S. had the largest number of respondents saying that climate change was “immaterial” to their decisions. LGBTQ justice did not rank.
What Will Harry and Meghan Do As Impact Officers?
Ethic did not say what exactly Harry and Meghan will do as impact officers. However, in a press release, the company said “they want to shine a light on how we can all impact the causes that affect our communities.”
This implies some sort of ambassadorial role, which might promote the idea of ESG investing among an increasingly skeptical audience in the U.S. Their campaigning might be able to convince more investors to think about ESG factors when buying into companies and funds, or at least bump climate change up the agenda.
It is not only the investment community that needs to be convinced, but everybody with money to invest. In an interview with the New York Times
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announcing the move to join Ethic, Harry said he wanted to get the “younger generation voting with their dollars and their pounds.”
However, things might be already starting to change regardless of Harry and Meghan’s new job. “I think we are starting to see more and more recognition in the public,” says Adams. “We sent the survey out last spring, so it would be interesting to watch over the next few years how the survey plays out.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
