ESG Investing

Royals and Celebrities Join in Support of ESG Investing Trends

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Despite having the influence to start trends themselves, celebrities are not immune to jumping on bandwagons. Now, members of British royalty have newly embraced ESG investing trends—and potentially inspired their own—as the Duke and Duchess of Sussex announce their entry into the ESG arena.

They are not alone in directing their public sway toward ESG considerations. Many stars have moved to lend their wealth and power to positive causes in an effort to promote progress on critical issues.

Royal Partnership Hopes to Spur ESG Involvement

In October 2021, Prince Harry and Meghan Markle announced plans to become “impact partners” with fintech firm Ethic in order to promote sustainable investing. They expressed the hope that their partnership with Ethic will raise awareness around issues such as racial injustice, climate change, and income equality. Not only have the Duke and Duchess of Sussex invested in the company, but they also have investments managed by Ethic, which says the collaboration is “an incredible opportunity to inspire even more people to align their individual values with their actions.”

Celebrities are well-positioned to inspire ESG investing trends that help foster the market for such investments.

Celebrities in ESG Foster Sustainable Efforts

Celebrities are not a new phenomenon within ESG. Using their platforms, they are well-positioned to inspire ESG investing trends that help foster the market for such investments. For instance, after meeting an Ethiopian coffee farmer in 1999, actor Hugh Jackman launched his New York–based Laughing Man Coffee shop to provide farmers in developing countries with a market in the United States. The proceeds are invested back in the Laughing Man Foundation, which “supports educational programs, community development, and social entrepreneurs around the world.”

Actor Matt Damon founded the H20 Africa Foundation in 2006 to raise awareness about safe water initiatives in Africa. In 2009, he partnered with Water Partners International to merge the two organizations and create Water.org, a charity devoted to providing safe water and sanitation for communities in need. The organization’s WaterEquity fund provides investment capital to microfinance companies that issue loans to low-income consumers at affordable rates so that they can make water, sanitation, and hygiene upgrades in their homes.

Actor Gina Rodriguez launched underwear line Naja as a way to empower garment workers in South America. Naja’s garment factory primarily employs single mothers or female heads of household, offering above-market wages with healthcare benefits. “Every child of a Naja garment worker receives books, school supplies, uniforms, and all school meals paid by Naja,” according to its website. Other examples of Hollywood’s entrants into ESG-related work include actor Robert Downey Jr.’s Footprint Coalition, actor Jessica Alba’s Honest Company, and musician Pharrell Williams’ Bionic Yarn.

Public Figures Place Fresh Emphasis on ESG

The ESG market topped out at $35 trillion last year, representing roughly 36% of all professionally managed assets globally. Celebrities in ESG efforts may play a role in bringing more eyes to this growth, but the role of celebrities in promoting awareness of ESG issues is still a subject of discussion. Involvement from famous names can invite concerns that efforts may tout themselves as “green” or “creating impact” despite evidence to the contrary—a practice known as greenwashing and impact washing.

Despite a lack of agreement on which benchmarks should be used to evaluate an organization’s ESG performance, regulation has placed a fresh spotlight on how well claims of sustainability match up against an organization’s actions. This progress lends increasing credibility to such ventures and may invite even wider engagement from investors and celebrities alike.

Any company, security, fund or other investment identified herein is provided solely for illustrative purposes and should not be construed as a recommendation or solicitation for the purchase or sale of any such investment.

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