The conservation charity founded by Prince William, second in line to the British throne and creator of the Earthshot environmental prize, is keeping its investments in a bank which is one of the world’s largest fossil fuel funders, has learned the Associated Press.
The Royal Foundation also places more than half of its investments in a fund advertised as green which holds shares in major food companies that buy palm oil from companies linked to deforestation.
“The earth is at a tipping point and we face a stark choice,” said the prince, a well-known environmentalist, as quoted on the Earthshot Prize and Royal Foundation websites.
Yet in 2021 his charity kept more than 1.1 million pounds ($1.3 million) with JPMorgan Chase, according to the most recent documents, and is still investing in the company today. The foundation also held 1.7 million pounds ($2 million) in a fund managed by British firm Cazenove Capital Management, according to the 2021 filing. Like JPMorgan, it still keeps funds with Cazenove, which held in May titles linked to deforestation via their use of palm oil.
The foundation invested similar amounts in the two funds in 2020, according to its old documents. As of December 2021, the charity also held over 10 million pounds ($12.1 million) in cash.
The investments, which the Royal Foundation did not contest when contacted by the AP, come as top scientists repeatedly warn that the world must move away from fossil fuels to sharply reduce emissions and avoid increasingly intense extreme weather events.
Financial experts say investments like the foundation’s can be blind spots for charities and philanthropies. With climate change an area of growing attention for foundations and others, organizations sometimes struggle to recognize where their own investments lie and align them with more environmentally friendly choices, despite the growing number of ways to avoid funds linked to fossil fuels.
Like the Royal Foundation, in recent years other foundations, including leading UK charities like the National Trust and the Wellcome Trust, have also come under fire for investments closely linked to fossil fuels or harmful practices to the environment. Microsoft co-founder and philanthropist Bill Gates announced that he divested his foundation’s direct oil and gas holdings in 2019.
Charities talking “must also follow suit”, said Andreas Hoepner, professor of operational risk, banking and finance at University College Dublin, who has helped devise several European Union climate benchmarks and has served on its sustainable finance group.
“Some funds are more sustainability-oriented,” Hoepner added, pointing to a dozen alternatives to the JPMorgan product that are marketed as sustainable.
There are also alternatives to Cazenove’s sustainability fund. For example, fund manager CCLA caters to churches and charities and does not invest in companies that derive more than 10% of their revenue from oil and gas. Another option is Generation Investment Management, founded in part by former vice president Al Gore.
The Royal Foundation said by email that it had followed the Church of England’s guidelines on ethical investing since 2015 and went above and beyond.
“We take our investment policies very seriously and review them regularly,” the statement said.
The foundation said the management fees paid to JPMorgan were low, but declined to provide a figure.
It’s unclear what role, if any, Prince William played in the investment decisions, as he did not respond to requests for comment from the AP. JPMorgan Asset Management in an email declined to comment on questions about charities investing in their products despite its record of fossil fuel funding.
Bloomberg data shows JPMorgan has taken on more fossil fuel industry bonds and loans and collected higher fees than its competitors in the five years to 2021.
The environmental NGO Rainforest Action Network looked at direct loans and equity ownership as well as bonds and estimated that between 2016 and 2021, JPMorgan’s banking arm funded fossil fuel companies with some $382 billion. It was more than any other bank.
“Major investors have a choice of companies to manage their assets, and mission-driven institutions have options far beyond the world’s worst fossil fuel bank,” said energy campaign manager Jason Disterhoft. at Rainforest Action Network.
As one of the largest banks in the world, JPMorgan is also a leading financier of green projects and has set itself the goal of investing $1 trillion in them over the next decade. . However, it has made about $985 million in revenue from fossil fuels, compared to $310 million from green projects since the Paris Agreement in 2015, or about three times as much, according to Bloomberg Data.
Compared to other charities, the Royal Foundation’s investments are small and have little impact on climate change. But they are not in line with the foundation’s philosophy, which cites conservation and mental health as key points of attention, or with Prince William’s public statements. Its Earthshot Prize, a “global search for solutions to save our planet”, awards grants of up to 1 million pounds ($1.2 million) each year to projects facing environmental challenges, according to the website of the Earthshot. charity, which suggests banks among potential beneficiaries.
In July, the Royal Foundation announced that the Earthshot Prize had become an independent charity and that Prince William would be its chairman.
In launching and awarding the prize and in other public appearances, Prince William has been outspoken about the environment for years. He argued that entrepreneurs should focus their energies on saving the Earth before investing in space tourism, encouraged parents to consider that their children do not have the same outdoor opportunities as they do, and urged conservation.
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“Today, in 2022, as the Queen celebrates her Platinum Jubilee, the pressing need to protect and restore our planet has never been more urgent,” the prince said in June during the Platinum Jubilee of the Queen Elizabeth II.
Royal Foundation policies do not allow ownership of shares in oil, tobacco or alcohol companies. But profits from the Royal Foundation account could allow JPMorgan to lend more money to the many oil companies it backs, enabling them to expand. Similarly, investing in companies linked to palm oil supply problems could help finance unsustainable practices.
While the Cazenove fund is marketed as “sustainable,” as of May 31, the fund held nearly $6 million worth of Nestlé stock and $8.1 million worth of Reckitt Benckiser stock, according to Morningstar Direct data. Both Nestlé and Reckitt Benckiser have faced controversy over their palm oil sourcing. The clearing of rainforests to make way for palm oil plantations is a major driver of deforestation in Southeast Asia.
Nestlé is the world’s largest food and drink maker, while Reckitt makes popular American brands, including Lysol and Woolite, and well-known brands in Britain, such as Vanish and Dettol.
A 2021 investigation by environmental NGO Global Witness found that the two companies sourced palm oil through intermediaries from illegally deforested areas in Papua New Guinea. Responsible plantations have also been accused of corruption, using child labor and paying police to attack protesters.
Lily Tomson, of responsible investment charity ShareAction, said Cazenove had shown some leadership in sustainable investing, but there “remain areas where charities such as the Royal Foundation can push them”.
Investors can vote on key environmental issues in the companies where they hold shares – for example, setting targets to align with the Paris Agreement, or climate lobbying. Yet Cazenove’s parent company, Schroders, voted against 22% of environmental resolutions last year, according to research by ShareAction.
Kate Rogers, head of sustainability at Cazenove Capital, said the company has engaged with Nestlé and Reckitt and seen progress on deforestation.
Raj Thamotheram, a former chief investment officer responsible for a $109bn UK university pension fund and AXA Investment Managers, said foundations should be better regulated, with annual reports detailing how well their strategy investment aligns with their mission.
Thamotheram, now an independent adviser, called unsustainable investing a “cultural and governance blind spot of enormous proportions”, and said it was endemic in the charitable sector.
“It’s the business as usual approach, and it needs to be shaken up,” he said.