Millennials, those born between the early 1980s and 2000s, are a generation that understands and cares about the economic, social and environmental challenges of mitigating climate change as well as the impact of today’s ethical choices for future generations and sustainability.
The values and attitudes of this tech-savvy demographic are different from those of previous generations. Notably, when it comes to investing for example, millennial savers are twice as likely as older generations to want their pension to be invested responsibly. According to the most recent YouGov poll, 13 per cent of 18 to 34 year-olds with a pension think it’s their responsibility to ensure their money is invested ethically. This compares to 6 per cent of 45 to 54 year-olds, and 7 per cent of over 55s.
Driven by technology, globalisation and growing access to information, millennials could potentially be the most educated generation in history. When it comes to identifying which companies to invest in, they understand that it’s not just about what companies do but also about how they do it. For example, more than 44 per cent of millennials believe that backing ethical firms could bring about positive social change, compared with 34 per cent of investors overall. This means that the investment community needs to understand how to cater for this new social and environmental-conscious investor.
Claudia Quiroz, Investment Director and lead investment manager for Quilter Cheviot’s Climate Assets Fund, says: “It is encouraging to hear that millennials are taking more ownership over their investments. Generation Y understands that equal or better returns can be achieved by investing ethically and caring about the environment.
“Often people mistakenly believe that they will be penalised with poor returns if they have strong ethical values when it comes to investing. Contrary to popular belief, performance in the ethical sector can be outstanding, as illustrated by our Climate Assets Fund, a multi asset, fossil-fuel-free fund with no mining or financial companies and top quartile performance since inception.
“There are many ways to gain exposure to investments that underpin particular ethical values and have a positive focus on the environment. For example, supporting companies that produce products to reduce carbon emission across industries is a good place to start.”