At SIBOS 2019, Taeun Kwon, Head of Wealth Management Programs at the University of Zurich, discussed the millennial appetite for responsible investment.
Kwon looked at the way millennials consume differently to previous generations.
A recent report showed 86% of millennial investors are interested in sustainability.
Kwon emphasised there is “no trade off” between profitability and sustainability.
What does this mean?
Kwon said sustainability is a big topic on the minds of millennial investors. There are different ways to invest sustainability through the likes of green funds, ESG funds and impact funds. All have a different approach – “for a long time, it was about defining and getting terminology clarified”, said Kwon. “This was done by the Global Sustainable Investing Alliance. Now, there’s the EU action plan coming up… part of their 10 actions is creating standard terminology.”
So it’s not just a generational push – there’s also increasing regulatory responsibility to make it easier to invest sustainably. “There is definitely going to be a regulatory push,” said Kwon. “The EU action plan is implementing for instance to disclose more sustainability relevant risk information… or when you as a customer enter a bank, the bank will be obliged to ask if you have an ESG preference. This will lead to more people reflecting it.”
It’s also important to note that ‘greedy’ millennials will not have to choose between sustainability and profit. “You can still have a financially superior return while investing sustainably,” said Kwon. “There are more than 2200 papers saying there is no trade off (between ESG and profit).”