Young Investors Can Boost Impact Investing, Report Says

Impact investing strategies could be marketed towards younger investors and those with longer time horizons, according to a new report.

A detailed report into the UK’s impact investing sector has stated that there is “an opportunity to be explored in targeting specific demographics within pensions”.

Those further away from retirement — particularly those aged under 35, such as millennials and ‘Generation Z’ — have the capacity to take on more risk and so should be able to put a more sizeable allocation of their portfolios towards “sustainable and impactful investing”.

The report — known as the Wei Forward Report after one of its lead organizers, Lord Wei of Shoreditch — said any push to grow young investors’ interest in impact investing strategies should be partnered with education initiatives to ensure they understand their options.

One barrier to additional investment in impact strategies is reluctance on the part of providers to add new options in the sector. The report stated that there was a “lack of institutional understanding” about impact investing, as well as “a reluctance to stray too far from traditional asset classes as a result of risk-averse cultures and regulatory pressures”.

Recent surveys have shown that US and Canadian investors are keen to embrace ESG and impact investing in various forms, despite a vociferous political debate raging between Republicans and Democrats about the legalities of ESG investment rules.

A poll by Nuveen found that a large majority of US investors see responsible investment as a core part of their strategy, and should always be factored into investment processes.