Millennials are studied and talked about often. There is a lot of good that has been brought to light, including that millennials work extremely hard and want their time, care, and money to be spent well during the course of that work. They strive not just for financial gains, but also for a sense of accomplishment and happiness that often can’t be attained through money alone.
Despite this, they’re about to become the wealthiest generation in history. As baby boomers start transferring their assets to their heirs in the millennial generation, companies are paying attention to where that money is likely to go. As a generation, they’re more likely than anyone before them to invest their money in vehicles that take environmental, social, and governance (ESG) criteria into account—and hold companies accountable for their increasingly important role in improving the world. Their needs can be met with the growing field of impact investing, and Falcons Rock Impact Investments is here to help them and anyone else interested in doing good in the world, find the right place to put their money.
Why They Care So Much
Millennials are people who were born any time between the early 1980s and early 2000s, which means that many of them have seen periods of significant change. They’ve lived through the dot-com frenzy of the 1990s and the financial market collapse in 2008, as well as the recession not too long after. Many remember terrorist attacks, 9/11, Arab Spring, and the wars in Iraq and Afghanistan; and they have seen a period of political shifts and division within the United States. It’s not just what they’ve seen, though: it’s what they talk about. Millennials are much more connected and technologically-savvy than any generation before them, and they use these connections and technology to share experiences and information with one another, regardless of cultural or global boundaries.
For better or worse, millennials are skeptical because of their experiences. Combine this quality with their attention to detail and unprecedented access to information and you have a generation that’s careful to do their homework before making any moves. They’re not likely to trust traditional stock market arrangements to handle their money safely and will use the tools they have at their disposal to figure out how to make their best choices. They are also a generation that cares deeply for the world they interact with and the people in it: if they can find evidence that their money will be invested in helping the world become better, they’ll uncover it and get started. Their education and passion make them a formidable force in the business world, and what they believe in is likely to shape markets in the years to come.
What They Care About
When millennials invest, they care about two things above nearly all others: social returns and transparency. They’re believers in the shared responsibility of people and organizations to make the world a better place and will prioritize social returns over an increased financial return. Companies that are interested in the money that millennials have would do well in responding to their concerns and can do this by listening through the channels through which their shareholders communicate with them. Being open about what they do and responding to asset managers’ questions is also a good way to reassure this generation of researchers that they can keep their money as well as principles safe.
This makes impact investing appealing to millennials. It offers different options than traditional investing does and gives them a novel way to act on the issues that they’re passionate about without sacrificing the opportunities that they’re seeking. Looking at companies through ESG filters makes sure that problems that can’t be solved through charities and governments can still find solutions. Issues like climate change, ethical corporate governance, healthcare, social justice, civil rights, education, the environment, access to food and water, and wealth inequity matter to this generation, and they will do all of the research and open dialogues with whomever they need to in order to be sure that their money is going to a good place. While a total shift in investing requires a cultural shift as well, as long as there are young people making demands of the market, choosing ethical options, and investing, the change could come along faster than any of us think.
The Future of Impact Investing
The millennial generation has found a way to further global missions while being financially responsible, and their demand and the upcoming wealth transfer is making the future of impact investing look less like a niche option and more like the future. A lot of growth has already happened in the short term, and there could be a great deal of sustainable, long-term growth in the future thanks to forward-thinking and conscious people like you who want to make a difference in the world.
Whether you’re a young millennial who’s just starting out with investing or an investor within another generation, Falcons Rock Impact Investments can help. No matter how experienced you are as an investor or what you believe in, we have options that can fit your needs. Learn more about our process.