Let millennials become slaves to older generations
Fact or mistake? Sustainable investments just a hype of the "Millennials"
"The stereotype of a generation moving towards a more sustainable world centers on those born since the mid-1980s as surveys show that millennials are more interested in this topic. For example, they are more likely to buy organic foods, ask for fair trade coffee, and are more concerned about human rights than their parents or grandparents (Produce Retailer, 'Younger consumers buy more organics', 2017)
In addition, they have grown up in the internet age, have been better informed about unsustainable practices and have become more politically aware of them. Research in the US shows that Millennials are “the most progressive generation in 50 years” and make the country more liberal. (The Millennial Pendulum: A new generation of voters and the prospects for a political realignment, 2009)
When it comes to investing, on the other hand, the interest in sustainability is evenly distributed across all age groups. This was the result of a survey carried out by Robeco among its private customers in the Netherlands in 2017. Around 70% of the participants over 50 expressed a clear interest in sustainability, while it was 66% in the 34 to 50 year olds and 67% in the 18 to 34 year old age group. While it wasn't a comprehensive scientific study, it became clear that sustainability is as popular among the middle and older age groups as it is among millennials.
The proportion of those investors who continue to invest in sustainable funds was 28% for those over 50, 29% for 34 to 50 year olds and 26% for 18 to 34 year olds. This also shows that the interest is evenly distributed across the age groups, with the middle age group slightly ahead. At the same time, the average proportion of the portfolio that is already invested in sustainable investments was 29% for those over 50, 30% for 34 to 50 year olds and 33% for 18 to 34 year olds. According to Robeco's customer survey, millennials have a slight lead here, if not a significant one.
A long history
Sustainability is by no means a new fad. Its origins date back to the 18th century when the Quaker religious community defined the first exclusion criteria by rejecting any investment associated with the slave trade. More recently, the idea gained prominence with black equality legislation in the 1960s and environmental protection campaigns in the 1970s. Exclusion criteria were used to a greater extent in the 1970s when companies refused to invest in South Africa because of the apartheid regime.
The idea of sustainability reached the global level in 1987 when the UN's World Commission on Environment and Development published its report "Our Common Future", which denounced the uncontrolled exploitation of natural resources, at that time mainly in the form of excessive deforestation. This document is particularly well known for coining the term "sustainable development". This was primarily aimed at the emerging countries, which were called upon to avoid the destruction of their environment in the course of their economic growth. The chairman of the commission, Gro Harlem Brundtland, defined the new term as follows: “Mankind is able to shape its development sustainably in such a way that it meets the needs of the present without impairing the possibility of future generations To satisfy needs. " (Report of the World Commission on Environment and Development: ‘Our Common Future’)
Another catchy term, the “triple balance sheet”, was coined in 1995 by the British businessman John Elkington. He said that every company needs to keep its balance sheet in three ways: people, the planet and profit (not just the latter), as they are all equally important to the long-term prosperity of society. From this, the ESG concept with the aspects of environment, social affairs and governance was developed, which today represents the foundation of most processes in sustainable investments. (John Elkington, ‘Enter the triple bottom line’, 2004)
In the following decade, the term “sustainable investing” and the related investment theme became widespread when it was first taken seriously by investors. After a few metamorphoses such as "Ethical Investment", "Responsible Investment" and "Socially Responsible Investing - SRI", "Sustainable Investment" has generally established itself as the most suitable generic term for the various investment strategies that take ESG aspects into account.
The globalization of the concept of sustainability experienced its temporary culmination with the UN Climate Change Conference (COP21) in Paris in 2015. It led to the Paris Agreement, according to which the world would increase the global average temperature to less than 2 ° C compared to pre-industrial levels should limit. The agreement was ratified by 174 countries on April 22, 2016 - the date is now known by the UN as "Earth Day".
After sustainable investing was more of a niche phenomenon in the past, we are now clearly at a turning point and there is no turning back. "
Guido Moret, Active Ownership Specialist & Masja Zandbergen, Head of ESG Integration, Robeco
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