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Growing Interest in Sustainability from Investors

The future is strong for sustainable investing, according to Sustainable Signals: The Individual Investor Perspective, a new report from the Morgan Stanley Institute for Sustainable Investing. The group surveyed about 1,000 people at the end of December and found some clear trends.

Overall, 71% of individual investors had an interest in sustainability when they made decisions about investing. Millennials were key players. They were almost twice as likely to invest in companies that are engaged in social or environmental issues. This is an important factor, because by 2020, one in three adults in America will be a Millennial. As they acquire more capital, they’ll be in a position to decide where to invest their money.

There were also significant differences in terms of gender. According to the report, women are more optimistic about sustainability leading to higher levels of profitability, and perceived sustainable investing to be better long term investments.

Here are 4 big trends in sustainable investing that the report pointed to:

  1. Economic returns underestimated. More than half of the people surveyed said there is a trade off between sustainability and financial benefits. The report highlights that it is vital to overcome this misperception that sustainability is counter to financial well-being.
  2. Millennials are mobilizing.  The report showed that 84% of Millennials surveyed were interested in sustainable investing. This trend will only get stronger as more Millennials enter the workforce. Their influence will grow and engaging them about sustainability now will have benefits in the future.
  3. Women are interested in sustainable investing. The survey indicated that 76% of women were interested in sustainable investing compared to 62% of men. There were also signs that women were more hopeful about the enduing advantages that sustainability brings especially in terms of profits. The data highlights a need to get men more engaged in the process.
  4. Sustainability has a strong future. –The positive trends in sustainable investing will continue to grow. The research showed that within the course of two years from 2012-2014, sustainable investments almost doubled.

Read the full report here.