By: CNBC (PAID POST BY CREDIT SUISSE)
When the largest generation in history is also the most socially conscious investor group the market has ever seen, business and social change are converging like never before.
Three-quarters of millennial investors regard their investment as a vehicle to make a positive social impact. Value-led spending is key for this generation.
“Millennials are disrupting the traditional models and re-defining consumption”
Priorities for socially responsible investors, particularly those who have grown up against a backdrop of global warming, include addressing climate change, global responsibility and sustainable living. A focus on impact investing – targeting businesses that have an ethical agenda – by the millennial generation is a powerful trend and has led to a rise in the collaborative economy.
The rise in socially aware investing
With sustainable investments currently representing 18 percent of the assets under management in the wealth and asset management industry, this is a real growth area. Couple this with the fact that millennial investors are almost twice as likely to put their money in companies that focus on social or environmental issues, according to research by EY, then the power of sustainability as a motivating factor for spend is even more significant.
The clear shift towards companies with social and environmental policies at the forefront of the business is reflected in millennial consumer spend. Millennials are increasingly buying products that are sustainable despite having a higher price tag, and it is clear that concern over environmental, social and governance (ESG) ratings is a crucial factor. This age group is significantly more likely to invest in companies that have proven high ESG standards than non-millennials.