Millennials & ESG Investing

September 1, 2022
By CSE

Younger Generations: Why & How You Should Engage Them in Your Corporate Financial ESG Strategy

By CSE Research Team

 

Millennials & ESG

 

Why

Younger generations will transform the world with their investments. As Baby Boomers continue to grow older, they will pass approximately $68 trillion down to their descendants, making it the “biggest wealth transfer in history,” according to CNBC. Millennial purchasing power will increase, and they will want to move their money, likely into the investing realm. While they may be just starting their careers, over time their assets will grow. As their assets increase, more long-term growth in a company is possible. 

In 2017, Morgan Stanley Institute for Sustainable Investing conducted a survey. It showed that millennials are twice as likely as the overall investor to invest in a company aiming to meet ESG targets. This can be partially due to the fact that 75% of Millennials believe that their investments can influence climate change and 84% believe that their investments have the power to help lift people out of poverty. This means that the companies with high ethical and environmental ratings will concentrate on the purchasing power that the millennials will gain. And this is already evident, as ESG-focused funds in 2021 invested $649 billion.

 

How

Although there is no exact formula for enacting your company’s ESG strategy to engage the younger generations,  there are some key factors that you should keep in mind to guide the process. 

 
Transparency & Assurance

With each passing year, more and more S&P 500 companies are publishing sustainability disclosures, with around 40% of S&P 500 companies now voluntarily addressing sustainability in their financial filings. However, as the threat of greenwashing rises, there is no direct correlation between publishing and higher investing. It is now of increasing importance to gain external assurance on your company’s ESG publishing. 

 

Social Media

Younger investors rely heavily on digital media.  Younger generations engage themselves in a multitude ways while they use social media. Is it important to ensure your media is eye-catching and visually appealing. For example, short, engaging videos are a great tool to connect and establish a relationship with your audience. 

 

Investor Relations

Simply making contact and maintaining a relationship with millennial investors is another tool to also utilize. While millennials use social media to establish a perceived reliability,  the power of investor relations is highly considerable, as it provides a sense of authenticity and an opportunity to convey the company in the best possible light. 

While engaging young investors may not be easy, it is vital for company performance and future growth. The years to come will reveal the perceptible effects of millennial investments. These investments will induce real change, both social and environmental, and your company would benefit greatly by being a part of it. 

If you’re interested in integrating ESG into your corporate financial strategy, attend CSE’s  Leadership Version of the Certified Sustainability ESG Practitioner Program. Throughout the live session, attendees will learn how to apply corporate sustainability ESG strategy on five fronts: awareness and training; stakeholder mapping and engagement, assessment; goals and strategy; and reporting.

 

CSE’s upcoming programs  include US Certified Sustainability (ESG) Practitioner Program, being held on September 22, 23 & 26 or the Leadership Version on October 27, 28 & 31 with a focus on Canada.

For more information, please reach out to us at sustainability@cse-net.org.

 


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