The Royal Foundation, the conservation charity founded by Prince William and his wife Catherine, keeps its investments in a bank that is one of the world’s biggest backers of fossil fuels, The Associated Press has learned.
- Prince William’s environmental charity received more than $1.9 million with JPMorgan Chase
- The charity cannot own stock in oil companies, but the funds could allow JPMorgan to loan more to oil companies
- The Prince has been outspoken on green issues, launching the Earthshot Prize in 2020 alongside David Attenborough
The foundation also places more than half of its investments in a fund advertised as green which owns shares in large food companies that buy palm oil from companies linked to deforestation.
“The Earth is at a tipping point and we face a stark choice,” the prince, a well-known environmentalist, is quoted as saying on the websites of the Earthshot Prize — which he launched in 2020 with David Attenborough — and the Royal Foundation.
Yet in 2021, the charity received more than 1.1 million pounds ($1.9 million) with JPMorgan Chase, according to the most recent filings, and still invests with the corporation today.
The foundation also held 1.7 million pounds in a fund run by British firm Cazenove Capital Management, according to the 2021 filing.
As with JPMorgan, it still keeps funds with Cazenove, which in May had securities linked to deforestation through their use of palm oil.
The foundation invested similar amounts in both funds in 2020, its older filings show.
As of December 2021, the charity also held more than 10 million pounds in cash.
The investments, which the Royal Foundation did not dispute when contacted by AP, come as top scientists repeatedly warn that the world must shift away from fossil fuels to sharply reduce emissions and avoid more and increasingly intense extreme weather events.
Financial experts say investments like those of the foundation can be blind spots for charities and philanthropies.
Charities ‘must walk the walk’
As climate change is an increasing area of attention for foundations and others, organizations have sometimes struggled to recognize where their own investments lie and align them with more environmentally friendly choices, despite growing numbers of ways to steer clear of funds linked to fossil fuels.
Like the Royal Foundation, in recent years other foundations, including high-profile British charities like the National Trust and Wellcome Trust, have also faced criticism for investments with strong connections to fossil fuels or environmentally harmful practices.
Microsoft co-founder and philanthropist Bill Gates announced that he divested his foundation’s direct oil and gas holdings in 2019.
Charities that are talking the talk “also need to walk the walk”, said Andreas Hoepner, a professor of operational risk, banking and finance at University College Dublin who helped design several European Union climate benchmarks and has sat on its sustainable finance group.
“There are funds that are more sustainably oriented,” Professor 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, funds manager CCLA caters to churches and charities and does not invest in businesses that get more than 10 percent of their revenue from oil and gas.
Another option is Generation Investment Management, founded in part by former US vice-president Al Gore.
The Royal Foundation said by email that it had followed the Church of England guidelines on ethical investment since 2015 and goes beyond them.
“We take our investment policies extremely seriously and review them regularly,” the statement said.
The foundation said management fees paid to JPMorgan were small, but declined to provide a figure.
It is not clear what role, if any, Prince William had in investment decisions, nor did he respond to AP requests for comment.
JPMorgan Asset Management in an email declined to comment on questions about charities investing in its products despite its record of financing fossil fuels.
‘The world’s worst fossil-fuel bank’
Bloomberg data show JPMorgan has underwritten more bonds and loans for the fossil fuel industry and earned greater fees than its competitors in the five years up to 2021.
Environmental NGO Rainforest Action Network looked at direct loans and stock ownership along with bonds and estimated that between 2016 and 2021, JPMorgan’s banking arm financed fossil fuel companies with some $US382 billion ($555 billion). This was more than any other bank.
“Major investors have their pick of companies to manage their assets, and mission-driven institutions have options well beyond the world’s worst fossil-fuel bank,” said Jason Disterhoft, senior energy campaigner with Rainforest Action Network.
As one of the world’s biggest banks, JPMorgan is also a leading financier of green projects and has set a target of investing $US1 trillion in these over the next decade.
However, it made about $US985 in revenue from fossil fuels compared to $US310 million from green projects since the Paris Agreement in 2015, according to Bloomberg Data.
Investments will not align with charity’s aim
Compared to some other charities, the Royal Foundation’s investments are small, with little impact on climate change.
But they are not in line with the ethos of the foundation, which lists conservation and mental health as main points of emphasis, or Prince William’s public statements.
The prince’s Earthshot Prize, a “global search for solutions to save our planet”, awards grants of up to 1 million pounds each year to projects confronting environmental challenges, according to the charity’s website, which suggests banks as among potential recipients.
In July, the Royal Foundation announced that the Earthshot Prize had become an independent charity and Prince William would be its president.
Through launching and awarding the prize and in other public appearances, Prince William has been outspoken on the environment for years.
He has argued that entrepreneurs should focus their energies on saving the Earth before investing in space tourism, encouraged parents to consider how their children will not have the same outdoor opportunities they had and urged conservation.
“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.
The policies of the Royal Foundation will not allow ownership of stock in oil companies, tobacco or alcohol.
But profits from the Royal Foundation’s account could enable JPMorgan to loan more money to the many oil companies it backs, allowing their expansion.
In the same way, investing in companies tied to problems with palm oil supply could help end unsustainable practices.
Palm oil ties to British end
While the Cazenove fund is marketed as “sustainable”, as of May 31 the fund held almost $US6 million of shares in Nestlé and shares worth $US8.1 million in Reckitt Benckiser, according to Morningstar Direct data.
Nestlé is the world’s largest food and beverage manufacturer, while Reckitt manufactures consumer goods including Lysol, Vanish and Dettol.
A 2021 investigation by the environmental NGO Global Witness said both companies were sourcing palm oil via intermediaries from illegally deforested areas in Papua New Guinea.
Clearing rainforests to make way for palm oil plantations is one of South-East Asia’s biggest drivers of deforestation.
The plantations responsible were also accused of corruption, use of child labor and paying police to attack protesters.
Another 2021 report, by sustainability analysts Chain Reaction Research, said both companies purchased palm oil from an Indonesian firm that has an affiliated mining project accused of deforestation in an orangutan habitat.
An investigation in 2020 by Chain Reaction Research found that more than 500 hectares — almost 1,000 football fields — of rainforest in Indonesia’s Papua province were felled by a supplier to Wilmar, a giant food and oils producer, from which both source their palm oil.
David Croft, head of sustainability at Reckitt, said no tainted palm oil entered its products from the Papua New Guinea properties, while conceding their mills were previously in its supplier list.
An intermediary company linked Reckitt to the Indonesian mining conglomerate in its supply chain, he said, and it was investigating.
Emma Keller, head of sustainability at Nestlé UK and Ireland, also said the Wilmar case was to be investigated.
Dr. Keller said that by winter 2021, more than 90 percent of Nestlé palm oil was deforestation-free, and it would achieve zero-deforestation status by the end of 2022.
Status quo approach ‘needs shaking up’
Lily Tomson, of the responsible investment charity ShareAction, said Cazenove had shown some leadership on sustainable investing, but there “remain areas [that] charities such as the Royal Foundation can push them on”.
Investors can vote on key environmental issues in companies where they hold shares, for example setting targets to align with the Paris Agreement, or on climate lobbying.
Kate Rogers, head of sustainability at Cazenove Capital, said the company engaged with Nestlé and Reckitt and had seen progress on deforestation.
Cazenove has committed to eliminating commodity-driven deforestation from its investments by 2025, and said a new voting policy meant that as of June 2022, the firm had voted against 60 directors of companies it invests in over a lack of climate action.
Dr Raj Thamotheram, former head of responsible investing at both a 92 billion pound British university pension fund and AXA Investment Managers, said foundations should be better regulated, with annual reports made to detail how well their investment strategies are aligned with their missions.
Dr Thamotheram, now an independent adviser, called unsustainable investments a “cultural and governance blind spot of huge proportions”, and said they were endemic in the charity sector.
“It’s the status quo approach and it needs shaking up,” he said.