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
LGT Wealth Management is maintaining a neutral stance on US equities going into 2026 as it is worried whether the hype around AI euphoria will continue.
Tyndall Asset Management is to close down the Tyndall brand and launch a newly-branded affiliate following a “material change” to its client base.
First Sentier has launched its second active ETF, offering advisers an ETF version of its Ex-20 Australian Share strategy.
BlackRock has revealed that its iShares bitcoin ETF suite has now become the firm’s most profitable product line following the launch of its Australian bitcoin ETF last month.
