Investments that track environmental, social, and governance, or ESG, principles are not just in demand amongst younger generations.
ESG investments have gained in popularity, and now a number of money managers are seriously considering the investing theme in response to the positive feedback across the broader investment community, FTAdviser reports.
According to the latest data from the Investment Association, responsible investment funds enjoyed net flows of £7.1 billion, or $9.4 billion, in the nine months ending September of this year, 275% more than the £1.9bn measured in the first first three quarters of 2019.
Gemma Harle, managing director of Quilter Financial Planning, points out that while many were initially focused on issues with governance and the environment, more are taking a closer look at social issues.
“Climate change in particular has been a real focus as a result of the likes of Greta Thunberg and Sir David Attenborough raising awareness of the threat of rising temperatures and sea levels,” Harle told FT. “However, as a result of the pandemic we are now seeing an interest in social issues too. People want to know that the companies they are investing in treat employees and society as a whole well and that their values are aligned.”
Tim Morris, financial adviser at Russell and Co Financial Advisers, said that while he still instigates the ESG conversation with clients and many become greater-engaged with the topic, there has been more resistance from some older generations of clients.
“That is now changing,” Morris told FT, “especially with the increasing climate emergencies making global news headlines in recent years. An upside of the pandemic has been to focus people’s minds.”
We are now seeing greater interest for socially responsible investments among older generations.
“ESG investment appeals to people of all ages. Of course on average those later in life have accumulated more wealth but we are starting to see an inter-generational transfer of assets and it is certainly true that younger generations score highly when asked about their interest in issues such as climate change, or sustainability more generally,” John David, head of Rathbone Greenbank Investments, told FT.
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