Social, Environmental Concerns Fuel Investment Choices
You can always find someone for whom social and environmental concerns are top of mind, but a new survey suggests that many consumers are willing to use dollars to support their ideals.
While different generations may have varying opinions on the most pressing social issues of the day, consumers across all age groups appear open to the idea of going to bat for what they believe in, according to a study by Allianz Life Insurance Company of North America. Allianz surveyed 1,000 adults about their investment habits to see if they were willing to invest in companies that support their views on environmental, social and governance (ESG) issues.
A sizable percentage across all age groups said yes. According to the survey, 64% of millennials said they consider ESG issues when making investment decisions, followed by 54% of Gen Xers and 42% of baby boomers.
While nearly half of Gen Xers and boomers (49% and 47% respectively) expressed an interest in allotting some of their money to ESG investments, a smaller percentage are actually doing so at this time. Only 7% of Gen Xers and 3% of boomers currently have ESG investments. Millennials are more proactive in that regard as 17% of them said they currently participate in ESG investing.
One of the main reasons given by respondents for ESG investing is using one’s stake in a company to have some sway over that company’s actions. In fact, 61% of boomers, 51% of millennials and 48% of Gen Xers said they wanted their participation in ESG investing to encourage firms to be “good corporate citizens.” When asked what issues resonated with them the most, a majority of respondents across all generations said social issues like workplace diversity were most important with corporate governance and environmental topics listed as the second and third concerns.
While respondents have good intentions, their knowledge about ESG investing may be lacking, the survey suggested. Of all generations, millennials were most interested in learning more about ESG investing. All generations seemed to agree that they had difficulty measuring a company’s commitment to certain causes. In fact, 71% of millennials, 64% of Gen Xers and 69% of boomers said they weren’t certain how to measure how much a company in an ESG investment cared about a particular issue.
“These stats show us that people from all generations are looking to learn more about ESG and want to put their values into action,” said Kelly LaVigne, vice president of consumer insights, Allianz Life, in a press release. “But they feel they need more education and guidance on how to best make ESG investment decisions.”
Investing in companies isn’t the only way respondents sought to use their money to support their causes. Approximately 77% of millennials, 64% of Gen Xers and 61% of boomers said a company’s record on ESG issues affected who they did business with.
As you determine whether socially responsible investing is for you, make sure you follow an investing plan that fits into your overall financial goals. Regardless of what types of companies you ultimately choose to invest in, take the time to understand investment basics such as the risks involved.
