Millennial investors put their money where their morals are

The under-30s are the least likely generation to put profit above beliefs, research shows.

Millennials are less likely to sacrifice personal beliefs for financial gain than other generations, according to research.

A study of more than 23,000 people around the world found only one in five of the under-30s would compromise their ethics for high returns. Overall, one in four would be willing to be flexible with their values.

The Schroders Global Investor Study 2020 found age had a strong bearing on the chance investors would deviate from their morals to make more money.

Some 50% of Brits aged over 71 years would trade their personal beliefs for higher returns. Around 23% of baby boomers would, and 22% of those born in the 1970s, classed as generation X. 

More experienced investors were also more likely to pick pounds over principles. 

A quarter of self-declared ‘expert or advanced’ investors were substantially more likely to trade their personal beliefs for better returns. This was compared with 18% of ‘beginner or rudimentary’ investors.

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Overall, however, 78% of Britons would not invest against their personal beliefs. For those who would, the average return on their investment would need to be 21% to adequately offset any guilt.

Doug Abbott, head of UK intermediary at Schroders, said:

“A significant majority of UK investors expect their investments to align to their personal beliefs and continue to express interest in sustainable investing. We expect to see continued growth in allocations to sustainable investment products.”

Around 92% of UK survey respondents wanted to see more information to reassure them their investments were sustainable.

Sustainable investing is in demand among both male and female savers of all ages and income levels, but just one in 10 think it is easy to make their retirement pot go green, according to a recent survey by insurer Scottish Widows.

Nearly two-thirds of those it surveyed wanted clear fund options which allow them to invest only in environmentally and socially responsible companies.

In the Schroders findings 40% of UK investors believed investing sustainably was likely to lead to higher returns. Some 51% said they were attracted to investing sustainably due to its wider environmental impact.

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Globally, expert or advanced investors are the most likely to think sustainable investments have the most potential to offer higher returns (44%) and the least likely to think investing this way will ultimately disappoint (9%).

More than half of fund managers believe the coronavirus pandemic will significantly accelerate a shift toward more sustainable, green business activity, according to separate research by interactive investor.

Countries in the European Union and the UK are cited as the regions that are likely to lead a greener and more sustainable economic recovery. Technology, renewable energy, healthcare and industrials were cited as the sectors likely to drive change.

Hamish Chamberlayne, head of Global sustainable equities at Janus Henderson Investors, said the next 10 years will see a move towards clean energy and electrification. 

He says:

“It will be a decade of digitalisation and hyper connectivity which will enable new ways of organising our economies and promote greater efficiency and circularity across multiple industries.”

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