Asset managers will need to enhance their investment standards the study suggests
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Interest in impact investing is rising across all age groups with millennial investors driving the growth.
An international study of investors reveals the appeal of investments with a strong focus on ESG and responsible investing with 56% in the US and 59% in the UK saying these are somewhat or very appealing.
The American Century Investments study discovered that Millennials (ages 21 to 38) displayed heightened interest in impact investing along with more than half of Gen X (ages 39 to 54) and slightly less than half of Baby Boomers.
"The findings of our study reaffirm that interest in impact investing continues to be on an upward trajectory across all age groups, but most importantly, it is encouraging to see that millennials are in the driver's seat for impact investing," said Guillaume Mascotto, vice president, head of ESG and investment stewardship at American Century.
The survey also shows that young adults plan to make investments with two in five in the US and 1 in 5 in the UK saying they plan to do so within the next 5 years.
Return on investments, risks, fees, and length of time are the main considerations when making investments but impact on society is important to 57% of US respondents and 64% of those in the UK.
"These trends are a significant signal to asset management firms that they will need to enhance their investment standards in an industry that will soon have to meet the expectations of more socially and environmentally responsible millennials," Mascotto explained. "As this generation increasingly demonstrates a desire to align their positive intentions to address global pressing issues with their investment choices, it is crucial that we understand their values and preferences so that we can properly assess both opportunities and risks."
While the environment is a key concern, the top focus for those seeking impact investments is healthcare and disease prevention.
Other selected causes in descending order included "improved education," "mitigating poverty," "gender equality" and "alignment with religious principles."
