Sustainable investing remains a strong trend worldwide as Gen Z and Millennial investors are nearly unanimous in their interest in having their portfolios make an impact, a survey out this week from the Morgan Stanley Institute for Sustainable Investing shows.
The Sustainable Signals report found an overwhelming majority of global investors (88%) saying they are interested in sustainable investing. Younger investors show the most interest in sustainability, with 99% of Gen Z and 97% of Millennial investors expressing interest. Nearly two-thirds of all investors (64%) say their interest has increased in the last year.
The survey polled 1,765 active individual investors with more than $100,000 in investable assets across North America, Europe and Asia Pacific between February and March of this year to assess attitudes toward sustainable investing and where investors see the greatest opportunities and challenges.
“Our Sustainable Signals survey shows that investors across demographic groups and regions continue to believe that investments can achieve both positive real-world outcomes and competitive market-rate returns,” said Jessica Alsford, chief sustainability officer and chair of the Institute for Sustainable Investing at Morgan Stanley.
“Younger investors plan to increase portfolio allocations to sustainable options at higher rates and prioritize a broader range of environmental and social issues when making investment decisions. This suggests that sustainability could become an even greater focus area for investors in the future as younger generations gain more financial influence,” she said in a press release announcing the findings.
Other survey highlights:
- Sustainable allocations: Over half of investors surveyed (59%) say they plan to increase their portfolio allocations to sustainable investments in the next year. Growing confidence that these options offer returns comparable to or better than traditional investments was cited as the top reason (24%).
- Driven by climate change: Investors also chose seeing the real-world impacts of climate change as a key reason for increasing their allocation. Just under a third (31%) plan to maintain their current allocation to sustainable investments, with portfolio diversification given as the most common reason.
- Energy transition: Across all regions, investors ranked renewable energy and energy efficiency as top investment priorities, and over 80% see the energy transition as an opportunity to generate returns.
- Geographic priorities: When it came to other sustainable solutions, regional differences emerged. North America respondents placed greater focus on health-care affordability and innovation, while investors in Europe and APAC put more emphasis on energy storage and battery technology as well as regenerative agriculture and sustainable land use.
- Financial advice: Almost 80% of global investors surveyed are likely to choose a financial advisor or investment platform based on sustainable investing offerings. This is stronger for Gen Z (96%) and Millennials (92%), suggesting that opportunity exists for advisors, especially as wealth transfers to younger investors in the years to come.
The Sustainable Signals series was launched in 2015 and measures the views of individual investors, institutional investors and corporates on sustainable investing. View the full results of the latest survey here.
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