THe FINANCIAL -- The Millennial generation is four times more likely than older people to invest their money for positive social and environmental impact, new research by Barclays reveals.
Two out of five investors (43%) aged under 40 report having made an impact investment during their lifetime, according to Barclays. But this falls to less than one in ten (9%) people aged 50-59, dropping even further to 3% of investors aged over 60.
Barclays is a leader in impact investing, giving investors the opportunity to invest their money to generate both competitive financial returns and make a positive social and environmental contribution to the world. This could mean investing in companies seeking to address challenges faced by our society, such as climate change, ageing populations or chronic diseases, through their practices, products or services.
Overall, investing with consideration for social and environmental impact is becoming more prevalent, with the number of UK investors that have made an impact investment growing to 15% in 2017, up from 9% in 2015. Under 40s are leading the way, with the number of people making an impact investment rising to 43% in 2017, up from 30% in 2015.
Barclays’ research found that younger investors would allocate the highest proportions of a portfolio to investing for the good of society. Those aged under 30 would allocate three times as much of their portfolio to impact investments as those aged 60 and above.
However, Barclays sees older investors, who hold greater wealth today, as a critical group in whom to raise awareness of and engagement with impact investing. Barclays says different age groups will respond to different approaches, which the industry must capture the interest of and cater to the whole spectrum of investors.
Damian Payiatakis, Head of Impact Investing at Barclays, says: “Younger generations are more naturally comfortable combining financial and societal ambitions when investing.
“However, it’s the older generation who have more investible wealth today and whose choices help shape the investment market and the world their children and grandchildren live in.”
Barclays is a sponsor of a global coalition of over 1,000 collaborators, The Impact Management Project, collaborating to establish shared fundamentals on how to talk about, measure and manage impact for investors.
Damian Payiatakis believes that more needs to be done to raise awareness of impact investing, and also to demonstrate how straightforward it is. He adds: “Older individuals and families are likely to have been investing over a longer period and have existing portfolios to evolve to align their investments with their intentions.
"In line with The Impact Management Project, we've been developing our process to help these clients transition their portfolios. This means understanding clients’ impact ambitions alongside financial goals that then can guide how we build their portfolios and report the outcomes achieved.”
Barclays Multi-Impact Growth Fund, a fund of funds, is distinct from other impact products by offering a diversified portfolio based on both their potential for strong financial returns and the consideration of their impact around key social and environmental issues such as climate or demographic changes.