Is social impact investing really only for millennials?

Those aged 35 and older are at least as likely to want investments that have a positive impact as so-called millennials, those aged 25 to 34.  

More and more investment management groups now talk proudly about their commitment ‘to social impact’ investing, offering ever more ESG (environmental, social and governance) compliant investment products.

To cynics, this is just a way to attract millennial investors. This is typically the hardest cohort to convince to invest but historically more interested in the social impact of their financial choices.

However, according to polling recently carried out by YouGov on behalf of Impax Environmental Markets, those aged 35 and older are at least as likely to want investments that have a positive impact as so-called millennials, those aged 25 to 34.  

According to the survey, 49% of 25 to 34-year-olds said they wanted investments that focused on both growth and had a positive impact. In contrast, 52% of those aged 35 to 44 responded the same, as did 48% of 45 to 54-year-olds and 51% of those aged 55 and over, suggesting there is little generational difference when it comes to wanting investments with a positive impact.

However, it is important to keep in mind that the survey was of the general public, who were asked about their preferences “if they were to invest money”. When it comes to those with a more active and engaged commitment to investing, the age split for impact investing becomes pronounced.

Other surveys have found that much more of a generational divide exists among those who are actively engaged in investing. A survey of investors conducted by Barclays in 2017 found that 43% of investors under 40 had made an “impact investment.” In contrast, just 9% of those aged 50 to 59 had done so, and only 3% of those aged over 60.

Similarly, a survey of 1,000 “active individual investors” in the US by Morgan Stanley’s Institute for Sustainable Investing from 2017 showed that those aged between 18 and 35 were nearly twice as likely as the general pool of investors to have made an investment because of a brand’s environmental or social impact.

The YouGov survey of the general public, however, did show a key divide between men’s and women’s attitudes to impact investing, with women significantly more mindful of the wider implications.

Among men, 31% of respondents said that they would invest money only on the basis of seeing growth, without reference to social impact. In contrast, only 13% of women answered the same.

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