Millennials 'twice as likely' to invest in green businesses
Millennials are driving significant worldwide growth in the sustainable and green investment industry, which is now worth nearly $9 trillion, according to financial services company Morgan Stanley.
Sustainable investment aims to deliver outsize returns and also meet targets aiming to help with societal and environmental concerns from around the world.
In its recently published 2017 'Sustainable Signals' report, Morgan Stanley's Institute for Sustainable Investing found that the young investors are twice as likely to trust their money in businesses that are actively and publicly setting themselves positive social and environmental goals.
According to the report, which is based on a survey of more than 1,000 investors, almost nine out of ten of the millennials surveyed were interested in sustainable investing, compared to 75 per cent of investors as a whole.
The data also revealed that sustainable investment opportunities grew by more than 33 per cent between 2014 and 2016 in the US alone, with the market for these products growing from $6.57 trillion to $8.72 trillion as a result.
Interest in sustainable investment by millennials has also grown in the past couple of years, rising from 84 per cent to 86 per cent, while young investors who suggested they were interested in impact investments grew from 28 per cent to 38 per cent.
As a result of its report, Morgan Stanley has suggested that millennials are now underpinning the growth of the impact investment market, as well as adopting sustainable options and green bonds in their portfolio.
According to the financial services firm, much of the increased interest given to sustainable investment by younger investors is caused by sustainable behaviour within the consumer space. Additionally, Morgan Stanley argues that the younger generation is also twice as likely as their older counterparts to purchase products from sustainable companies, highlighting their preferences away from the investment market.
Audrey Choi, chief sustainability officer and chief marketing officer at Morgan Stanley suggests that this behaviour is beginning to have a significant impact on the financial sector.
Speaking in a press release, she said: "As widespread attention to sustainability continues to increase, consumers and investors alike are now more than ever factoring sustainability issues into their investment decisions."
Amit Bouri, cofounder and chief executive officer of the Global Impact Investing Network agrees, suggesting that this effect could continue for the foreseeable future. "What we are seeing right now is just the tip of the iceberg," he said. "In the coming years, budding interest will translate into more and more concrete action on the part of financial-services firms."
In fact, the report argues that pressure has already begun to grow for businesses who aren't yet taking issues concerning climate change as seriously as millennials require them to, with experts suggesting that global warming is putting as much as $43 trillion of global manageable assets at risk between today and the end of the century.
Highlighting the need for change, Choi concluded: "The Morgan Stanley Institute for Sustainable Investing works to drive scalable investment solutions that seek to deliver positive social or environmental impact alongside the market-rate returns that clients expect."