[Gen Z] How Millennials and Gen Z are shaking up sustainable investing

When it comes to impact investing, the future lies with Millennials and Gen Z.   These two generations will determine whether investments become more ethical and sustainable, or simply pad the pockets of wealthy business people.   To help these new generations change the future for good, it should start with trust, transparency and mutual respect.  

WHO ARE MILLENNIALS AND GEN ZERS
 
Millennials are born between 1981 and 1995, and currently make up most of the workforce.  They are known for being digitally connected and for wanting instant gratification, work-life balance, new experiences and social collaboration.
Loosely defined as those born between 1996 and 2010, Gen Zers value diversity and are entrepreneurial, pragmatic, and technology savvy.  As of 2020, this demographic constitutes one-third of the global population. That's a lot of purchasing power and influence in the workplace!
Some key findings:
  • 86% of Millennials are interested in impact investing, and Millennials are twice as likely to invest in funds targeting social or environmental causes than the general population.
  • Around three-quarters (72%) of Gen Zers expressed hope that responsible investing could improve sustainability outcomes.
BARRIERS TO SUSTAINBLE INVESTING
Historically, only wealthy customers of private banks could afford to invest.  For others, sustainable investing meant assuming very high risk and low returns.
 
We often find that younger generations simply don't know how to make ethical investments.  39% of Millennials say that lack of knowledge is an obstacle to investing.  77% of younger investors do not have direct experience with "green investing" and two-thirds  have tried impact investing before.
 
Additionally, 60% of Millennials surveyed by ShareBuilder said that they were skeptical of financial markets.
These don't seem promising; hence, we want to create a new culture of trust and accessibility.
FUTURE OPPORTUNITIES FOR SUSTAINABLE INVESTING
 
Here's what we are doing to inspire young investors:
1.  Catering to their social and environmental values
  • Cone Communications Millennial CSR Study shows: 
    • 90% of Millennials want to switch to cause-related brands
    • 70% of Millennials want to spend more on ethical products
    • 72% of Gen Zers believe that racial equality is the most important cause for businesses and governments to currently address
2.  Integrating with their favourite technologies
  • From smartphones and tablets to Instagram and Facebook). 
  • For personal finance and investing, young investors are turning to digital and mobile-first solutions
 
3.  Provide honest and clear communications
  • Labeled as the "True Gen", Gen Z has earned a reputation for search for truth and asking institutions in power to be held accountable for their actions and transparent about their policies.
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Source:  Extract from yova.ch
Tags:   ESG    /   Sustainability   /   Sustainable investing   /   Millennials   /   Gen Z
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