Consider ESG investments for millennials, longer-term investing

When it comes to investing, millennial clients rank environmental, social and governance (ESG) factors as equally important as investment outcomes, reveals a global investor survey by Schroder Investment Management.

Compared to older clients, millennials rate the importance of world-based social outcomes, like poverty and climate change, higher (6.4 out of 10 for older clients versus 7.2 out of 10 for millennials).

Read: Not on top of ESG investing? Don’t ignore it

Making a commitment to ESG

Although global investors rate ESG issues as less important than tangible, long-term growth (6.9 versus 7.8), they stay invested in ESG investments longer.

In Canada, almost half of survey respondents (48%) said they’d stay invested in positive ESG products for more than two years longer than usual; two-fifths (44%) said they’d stay invested two to 10 years longer than usual.

Further, companies that fail to deliver on ESG issues motivate investors to move their investments. Of those Canadians surveyed, 50% would move investments if they discovered the company contributed to climate change; 47%, if the company has a poor record of social responsibility.

Other factors motivating Canadian investors to drop an investment: the company is negatively featured in the news (48%), uses legal tax schemes (45%), or is associated with repressive regimes (34%) or weapons (33%).

The survey included 20,000 investors across 28 countries.

More details are available here.

Read: Experts dish on ESG investing trends, challenges

Also read: Most clients unaware of responsible investing

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.