Impact investing is becoming increasingly popular, especially among millennials, although social impact remains at the bottom of the list of important factors in investment decisions, a report from American Century Investments finds.
Based on a survey of a thousand American adults, the firm's Impact Investing Research report found that 49 percent of respondents considered the idea of impact investing to be very or somewhat appealing, up from 38 percent in 2016. Millennials were the most likely to say impact investing was appealing (56 percent), followed by Gen Xers (52 percent) and baby boomers (44 percent), while men (52 percent) were more likely than women (47 percent) to say so. Similarly, 24 percent of respondents said they were very or somewhat familiar with the concept of impact investing, up from 20 percent in 2016, with more millennials (32 percent) and men (30 percent) familiar with the concept than women (19 percent), Gen Xers (26 percent), or baby boomers (17 percent).
According to the survey, only 54 percent of respondents said impact on society was a very or somewhat important factor in their investments decisions — up from 42 percent two years ago, but well below other factors such as return on investment (86 percent), fees (83 percent), risk (83 percent), and investment duration (81 percent). Women (57 percent) were more likely than men (51 percent) to consider impact on society an important decision factor, as were millennials (60 percent, compared with 51 percent of Gen Xers and 52 percent of baby boomers). In terms of issue area, health care and disease prevention and cures once again topped the list of causes that mattered most to respondents, except among millennials, who were split between health care (28 percent) and better education (29 percent).
"This research shows that interest in impact investing continues to grow across all age groups but particularly among the next generation of investors," said Guillaume Mascotto, vice president, head of ESG (environment, social, and governance) and investment stewardship at American Century Investments. "As an asset manager, we're committed to offering solutions for those seeking to have a positive impact on society by investing in companies whose business activities are focused on addressing global issues, notably the United Nations' Sustainable Development Goals (SDGs)."