The young are vocal about climate change, pollution and inequality. Last year, Swedish schoolgirl Greta Thunberg was catapulted to fame when her climate protest sparked an international wave of school strikes. The youngest-ever US congresswoman Alexandria Ocasio-Cortez has been making waves with her Green New Deal.
One of the most powerful recent appeals, however, comes from Sir David Attenborough and his documentary series Our Planet. Not exactly a millennial, you may note. After all, it’s not just so-called snowflakes who care about global warming.
It could be questioned whether the focus on millennials has led to less money being invested in the sector
When it comes to tackling climate change and inequality by investing in companies that work on solutions, sustainable investment has been on the rise. Also known as socially responsible investing, this approach uses environmental, social and governance (ESG) factors to asks questions such as: How well does this company treat the workers in its supply chain? How many tonnes of carbon has it managed to avoid? What’s the ratio between the chief executive’s pay and that of the lowest-paid employee? How diverse is the company board?
Millennials have been a driving force of ESG investing. Of those investors aged 25 to 34, some 53 per cent go for sustainable funds, while 28 per cent of those over 65 do the same, according to Schroders Global Investor Study 2018. But have investment companies placed too much emphasis on courting millennials, when ESG should be a universal issue? And what impact has this millennial focus had on the market so far?
What impact has the focus on millennials had so far?
When trying to appeal to millennials, there’s a danger that some companies “stick on a badge or a graphic of the UN sustainability goals, without any substance”, says John David, head of Rathbone Greenbank.
“It could be questioned whether the focus on millennials has led to less money being invested in the sector,” says Jeannie Boyle, director and chartered financial planner at EQ Investors, noting that millennial graduates have larger amounts of debt than previous generations.
On the upside, Ms Boyle says the focus on millennials has encouraged innovation. It’s largely thanks to younger investors that “we have seen a pressure on providers to reduce their charges”, adds Philippa Gee, who runs Philippa Gee Wealth Management. She says younger investors also demand more passive products and digital products. These changes have benefited all generations.