Millennials lead impact investing
Australian millennials and Generation X are leading the rise of impact investing among local investors, according to a global study conducted by American Century Investments.
The study assessed the role of impact investing on society as well as perceived financial returns, with respondents from the US, UK, Germany and, Australia with results weighted by age, sex, geographic region, race and education.
The majority of respondents in the US (61%), UK (63%) and Australia (57%) found impact investing appealing but appeal was even higher among millennials and Gen Xers.
About 66% of millennials in the US found impact investing appealing, while in the UK and Australia the number was 67% and 68% respectively.
However, while baby boomers generally found impact investing less appealing than the overall population, their interest had increased over consecutive years of running the study.
According to American Century’s head of ESG and sustainable investing, Sarah Bratton Hughes, there was a rising demand for impact investing across geography, generation and gender, along with favourable economics.
“This demand is further backed by a supportive political and regulatory environment that will help drive changes and advances in sustainable investing over the coming year,” she said.
“The combination of regulatory pressure, investor demand and industry cooperation will also help with consistency and transparency across sustainable investing, including alleviating any investor concerns around greenwashing.”
Other concerns for Australian investors included improved education (10%), racial equality and social justice (8%), mitigating poverty (8%) and gender equality (7%).
The study also showed an increasing trend in the share of investors willing to sacrifice financial returns for positive impact.
In all, 38% of US respondents reported a willingness to sacrifice returns for a positive impact, up from 33% in 2020. Further, 50% of US millennials were willing to sacrifice returns for a positive impact, with similar numbers in the UK (49%) and Australia (45%).
AUTHOR
Liam Cormican
Recommended for you
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
Australia’s “sophisticated” financial services industry is a magnet for offshore fund managers, according to a global firm.
The latest Morningstar asset manager survey believes ETF providers are likely to retain the market share they have gained from active managers.
