As NBC News explained, “ESG investing” (environmental, social and governance), “SRI” (socially responsible investing), “CSR investing” (corporate social responsibility) or simply “impact investing,” is a concept has been around for years, but Millennials are charting new territory when it comes to doing good with their money. A rising group of Millennials is changing the way investors utilize their capital – for them, making a social impact is just as important as making a positive return.
By The Numbers:
- According to a survey run by Bank of America in 2018, 77% of high-net-worth millennials currently own or are interested in impact investments.
- More than half of Millennial investors (52%) see the social responsibility of their investments as important selection criteria, compared with less than 30% of WWII-era investors and 42% of Gen X investors.
- Currently, impact investing is $77 billion global industry that’s seeing steady growth each year.
What Can Impact Investing Do? Impact investments are made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Instead of forcing an investor to choose between wanting to make a difference and wanting to make money, unlike past mechanisms for social change like charity, impact investing synergizes the two. Watch this video to learn more about the specifics of what impact investment can achieve.
Rising Returns: The 8th Annual Impact Investor Survey ran by the Global Impact Investing Network found that since just 2016, impact investment deals have gone up 58%, from $22.1 billion across 7,951 deals to $35.5 billion across 11,136.
Sustainable Development Goals As a Guide: In 2017, 76% of respondents across a spectrum of 225 investors said they tracked or planned to track their investment performance using the SDGs set forth by the United Nations.
Why Millennials?: As Forbes explained, “The younger generation may see billionaires such as Bill Gates and the legendary Rockefellers as inspirational business people, but they may question the old guard style of first spending precious time trying to make billions of dollars and then endeavoring to better the lives of others. The concept of impact investing, or pursuing both a financial return at the same time as a positive social impact, allows young people to strive toward both simultaneously.”
Why This Matters: The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services including housing, healthcare, and education. This commitment to implementing social change combined with the estimated $30 billion intergenerational wealth transfer soon to go to Millennials over the next 30 years speaks volumes to how beneficial this new type of investor consciousness could be for the health of our society and our planet.