Wealthy US Investors Turning to Impact Investment
10 September 2018 at 5:12 pm
A growing number of high net worth investors in the US are turning to impact investment, and it’s millennials who are leading the charge, according to recent survey findings.
The survey of nearly 1,000 high net worth (HNW) individuals across the US found social impact was recognised not only as a way to hold organisations accountable for their actions, but also to build a competitive advantage for businesses.
For 80 per cent of HNW investors, there was an expectation that companies made a profit but also took responsibility for their environmental and social impact.
Those most likely to consider social important in their investment were millennials (87 per cent), generation X (65 percent) and women (64 per cent).
A growing percentage of HNW investors were also reviewing their portfolios for impact.
Across all demographics, 37 per cent of HNW investors said they had reviewed their portfolios for impact, up from 23 per cent three years ago.
Again it was millennials leading the way, with 78 per cent screening for impact, up from just 31 per cent in 2013.
Impact Investment Group CEO Daniel Madhavan told Pro Bono News that young people’s interest in impact investing was a “great long-term trend” that was also evident in Australia.
“Much of this growth comes from younger Australians wanting their superannuation working towards a future they are inspired by,” Madhavan said.
“Awareness and action is growing across the board.
“Crucially, as of right now in Australia, it’s gen-X and older who are in control of the most capital, and are therefore in a position to drive the most money towards impact investing, and that is happening.”
The survey was completed by U.S. Trust, a private wealth management organisation, part of the Bank of America.
Madhavan told Pro Bono News it was great to see “one of the world’s largest financial institutions” take interest in impact investing.
“That decision by a very mainstream bank indicates that – as a concept – impact investing has taken off in the 10 years since the term was coined,” he said.
“That said, all research has its flaws, and self-reported data about something as sensitive as money must be treated with caution.”