A new study from American Century Investments has found that though impact investment is growing in popularity across age groups, the socially-conscious investment movement’s most enthusiastic proponents are Millennials.
Impact investing is a growing trend of investing in organizations that will create beneficial societal impact as well as financial returns. Impact capital can be invested in emerging or developed economies, in areas ranging from renewable energy to healthcare to sustainable agriculture. North American and European institutional investors (pension funds, endowments) have played a key role in developing the field of impact investment, while the Catholic Church under Pope Francis has also dipped its feet into the trendy investment area.
Now, socially-conscious Millennials are propelling the growing appeal of impact investing. According to a new study from American Century Investments, the overall ‘appeal’ of impact investing reached 49% among US respondents in 2018 – a growth of 11% since 2016. Millennials found impact investing most appealing, at 56%. Meanwhile, 52% of Gen-Xers found it appealing, and 44% of Baby Boomers. As such Millennials are significantly more likely to find impact investing appealing than their (mostly) Baby Boomer parents.
Relatedly, familiarity with the concept of impact investment has grown in the past two years, according to ACI’s survey. In 2016, 20% of respondents were familiar with impact investing, while 24% were familiar with it in 2018. Millennials were most aware of impact investments, with 32% familiar with the concept. 26% of Gen-Xers were familiar with the concept, while 17% of Boomers knew about it.
A rising proportion of people also believe that impact on society is an important part of choosing where to invest. While 42% of respondents in 2016 said that impact on society was important when investing, that number grew 54% in 2018. As in the other categories, Millennials were most keen, with 60% believing that impact investing was very or somewhat important.
Gen-Xers and Baby Boomers were less enthusiastic, with 51% and 52%, respectively, rating impact investing as very or somewhat important. Furthermore, women were more likely to rate impact investing important than men (57% of women vs 51% of men).
