Ethical Investing  

The importance of ethical investing across the generations

This article is part of
Guide to ethical investing

“What did they do that made the world better? That’s a good human motivation and I find it translates very well in investment.”

One of the questions older investors may ask themselves when it comes to investing more responsibly is whether they have enough time left to make a difference.

Ms Landers recalls: “I had a client who said, ‘I want to do something about the environment but my money isn’t enough to solve it’. And I said, it’s true. However, if you don’t do anything or you continue to invest the way you are, you may be exacerbating the problem.”

Those in their 40s and older are also more likely to have regular access to a financial adviser, in addition to the available finances to invest.

A broad movement

Kathryn McDonald, head of sustainable investing at Rosenberg Equities, points out: “In terms of client demand for this type of more responsible strategies, we think there is already a massive transfer of wealth happening and clients are already very much interested in ESG investing today. 

“Therefore we don’t need to necessarily wait for the millennials to see this market boom. People in their 40s and 50s have already grown up in a world where access to company information is so readily available that there is an ever-growing expectation for companies to demonstrate certain kinds of behaviour in order to preserve their brand value.”

She notes also that various studies show women are increasingly making the financial decisions on behalf of their households and that they tend to prefer more ethical values in investing. 

The recent extreme weather conditions, such as the hurricanes which have hit parts of South America and the US, may have brought home the seriousness of issues such as climate change.

Damian Payiatakis, director of the impact investing business at Barclays, says: “A lot of times it is general exposure to inequality or political zeitgeist that is driving interest in this space.

“I would say it’s not solely the younger generations who are more interested, I think it’s a broader movement of people who are more aware of their role in society and how they can live in a way that is aligned with how they want to.”