Impact Investing and Millennials

As impact investing makes its way towards mainstream knowledge, millennials show signs that they are the most willing generation to invest in impact and take on the risks that may accompany these investments. According to U.S. Trust Insights on Wealth and Worth it is millennials more than any other generation who believe investment decisions are a way to express social, political and environmental values. Most millennials would rather not invest in a company that is negatively impacting the world even if high financial returns are expected:

74% say that they seek both financial and social impact returns

13% say they seek opportunities that align with their values, regardless of financial return

9% say they seek financial returns first with some social benefit

67% of the millennials surveyed are either current investors with personal assets under management ranging from USD $500,000 to USD $99 million, or future wealth holders who anticipate access to larger pools of capital with family assets ranging from USD $1 million to over USD $1 billion. 78% of millennials surveyed believe they will receive access to a larger pool of assets in the future. 27% of these millennials anticipate access to these assets within the next 5 years, while 24% estimate access to a larger pool of assets in 20+ years. While the transfer of wealth is anticipated, it is important to note that there may be some unforeseen challenges for millennials.

Millennials are very concerned about an eroding quality of life. As a result, their priorities include “staying close to family and friends, having free time for recreation, and working in creative jobs.” This quest for balance and alignment is commented on broadly in research on millennials. “If the financial markets are going to be volatile, the most secure thing you can do is find a life and work that you love,”. According to a Morgan Stanley study, millennials are three times more likely to seek employment with a company based on its stance on social and/or environmental issues (14% of millennial investors, compared to 5% of the total individual investor population) 

Millennial impact investors in this study are pursuing careers in the following areas:

• Social Entrepreneurship
• Working with the family foundation
• Investment management in a social investment fund
• Managing their own social investments
• Sustainability consulting
• Social Finance advisory and structuring

More findings available in research report prepared by Toniic Institute.