Understanding how this younger generation will invest is increasingly exercising the minds of those looking to capture this market.
This has spawned the development of funds and strategies aimed at catering to the outcomes youth want from their investments. ‘Impact Investing’ is one that is creating plenty of interest particularly in the US and Europe.
While companies and funds are now very tuned into the increasing use of the Environmental Social and Governance screening, Impact Investing takes it up a notch.
Rather than the ESG focus of ensuring the avoidance of investing in companies that produce a negative impact – on the likes of health, gambling or carbon footprints, Impact Investing looks to actively generate a measurable, beneficial social or environmental impact alongside a financial return.”
Put simply this is about the convergence of purpose and profit.
And it is this philosophy of investing that is capturing the hearts, minds and ultimately the wallets of those who are still fairly new to the workforce.
When Millennials were polled in 2015, 43% were interested in impact investing and 17% had already invested. Two years later the same polling showed that interest from this demographic had grown to 52% and 30% had invested.
The older the group the less interest was found in Impact Investing. Only 30% of baby boomers polled any interest at all in this kind of socially progressive investment.
If you asked a restaurant for a vegan dish 20 years ago one would have been considered strange but these days every menu has vegan or gluten-free options. Supplying this market is now a big industry.
The food industry has been shaken up. Young adults are forcing the plastics issue and pushing for solar panels and electric cars.
In fashion, they are pushing to check supply chains. US clothing company Patagonia, Drew says, owes much of its success to its policy of recycling old clothes.
All these and plenty more are youth-led agendas.