Wake up, old men! It’s fast becoming conventional wisdom in the investment industry that female and younger investors are leading their older male counterparts in valuing social and environmental impact.
New research (and a cool infographic) from Morgan Stanley’s Institute for Sustainable Investing suggests 40 percent of female investors consider the impact of their investment, along with financial return, when making an investment decision, versus only 23 percent of men, based on a survey of 1000 individual investors.
Women investors represent 39 percent of assets under management in the U.S.
The report, Sustainable Signals, also found that members of the Millennial generation (22 percent) are nearly twice as likely as the total investor population (12 percent) to invest in companies or funds that target specific social or environmental outcomes. Millennials will make up one in three U.S. adults by 2020.
Altogether, 71 percent of active individual investors describe themselves as interested in sustainable investing, and 65 percent believe sustainable investing will become more prevalent over the next five years.
But the report suggests that there’s work to do to move investors from interest to action. Nearly three-quarters of individual investors believe companies with good environmental and social policies can be more profitable. But 54 percent believe there is a trade-off between financial returns and sustainability.
“The perception of trade-off between profitable and sustainable investments is still a major barrier to the growth of the field,” said Audrey Choi, CEO of the institute and a managing director of Morgan Stanley. “We and others trying to advance sustainable investing at scale have a job to do, demonstrating that it is possible to achieve positive impact and market-rate returns.”