Many folks in the industry expect millennials to drive the greatest demand for socially responsible investments going forward, as this generation believes social or environmental impact is important. But interest in these investments is even higher among Generation Z, those aged 18 to 24, with 84 percent of these investors indicating that they’re either already invested or plan to invest in SRIs in the future, according to a new study by Swell Investing. That compares to 78 percent of millennials, 67 percent of Generation Xers and 54 percent of baby boomers.
“The next generation of investors grew up with a smartphone in hand and instant access to news and information,” said Dave Fanger, CEO and founder, Swell Investing. “Events that happen thousands of miles away can be seen immediately in the palm of their hands, and they’ve never known anything different. This access developed in them a sense of responsibility and empathy that carries over to their financial lives.”
Harris Poll, on behalf of Swell, surveyed more than 2,000 adults aged 18 and over, 1,400 of whom have investments.
The current political climate is driving much of the interest, Swell found, with 63 percent of Gen Z and 65 percent of millennials indicating that their interest in SRI was affected by politics.
And younger individuals believe they can affect positive change with their investments, especially on the environment. Nearly three in four (72 percent) of Gen Zers say the decisions made around investing can have a meaningful impact on climate change and the release of greenhouse gases.
In addition, nearly one in three Gen Zers (31 percent) said they would allocate half or more of their portfolio to SRI or impact investments, compared to one-fourth (25 percent) of millennials.