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Millennials put greater importance on ESG factors

The Schroders Global Investor Study 2016

11/28/2016

November 28, 2016

The Schroders Global Investor Study 2016, which surveyed 20,000 end investors in 28 countries, found that millennials (aged 18-35) are more likely to place greater importance on Environmental, Social and Governance (ESG) factors than older investors (aged 36+). The survey found that the millennial generation ranked ESG factors as equally important as investment outcomes when considering investments decisions. The study also highlighted that global investors would hold ESG investments for an average of 2.1 years longer than their usual investments.

Millennials demand for ESG

ESG factors such as corporate governance, social responsibility and environmental impact issues, such as world poverty and climate change, were all significantly more important to millennials than to the older generations in their investment decision. Opinions between these two age groups differed the most on world-based social outcomes, like poverty and climate change, with millennials rating these highly (7.2/10) compared to older investor groups (6.4/10), on average.  The study also concluded that millennials were more likely to actively pull funds from companies with poor ESG records, companies associated with weapons manufacturing/dealing or linked to repressive regimes would be the primary causes of this.

Most groups of investors are looking for good corporate governance, with the issue topping their list of ESG concerns.  However, millennials again appeared to show more concern rating it an average of 7.4/10 compared to older investors rating it 7.0/10. 

ESG an alternative to short-termism  

The study found that global investors would stay invested in ESG investments longer than usual, with 82% indicating they would do this. Over a third (38%) said they would stay invested in companies with positive ESG philosophies for at least two years longer than they would stay invested in their usual investments. 

The value of ESG

On average, global investors rated ESG issues as less important when making an investment decision, than tangible, long-term growth, which they rated 7.8/10.  However, global investors still rated positive ESG factors highly at 6.9/10 on average, indicating a high degree of importance placed on both issues.  Many experts would argue the two considerations are inseparable.

Jessica Ground, Global Head of Responsible Investing at Schroders, said:

“The interest in ESG and corporate governance issues for investors only looks set to grow given its prevalence amongst millennials.  While returns are still the most important issue, ESG’s importance to end investors means that these factors are too big for any advisor to ignore. At Schroders we have long viewed ESG factors as contributing to investment outcomes and returns. We have been integrating analysis of them in our active fund management processes for almost 20 years. It is important to continue to educate investors on the value and added return ESG can provide.

“While many policymakers are concerned about the rise of short -termism in markets, encouragingly, those surveyed said they would stay invested in ESG philosophies longer than they would in other investments. It is important that investors recognize the value of being invested for the long term and this is especially relevant when considering ESG factors.”

For more information on the study results please visit www.schroders.com/us-gis

To discuss the findings of the study in more detail with Jessica Ground, Global Head of Responsible Investing, please contact a member of the Schroders PR team.

For further information, please contact:

Catherine Wooters of Prosek at 212-279-3115 x 287, cwooters@prosek.com

Jennifer Manser of Schroders at 212-632-2947, jennifer.manser@schroders.com

About the Schroders Global Investor Study 2016

Schroders commissioned Research Plus Ltd to conduct, between March 30 and April 25, 2016, an independent online study of 20,000 investors in 28 countries around the world. This research defines ‘investors’ as those who will be investing at least €10,000 (or the equivalent) in the next 12 months and who have made changes to their investments within the last five years. These individuals represent the views of investors in each country included in the study.

About Schroder Investment Management North America Inc.

Schroder Investment Management North America Inc. is an indirect wholly-owned subsidiary of Schroders plc (SDR.L), a global asset management company with approximately $487.1 billion under management as of September 30, 2016. Schroder’s clients include major financial institutions including banks and insurance companies, as well as local and public authorities, public and private pension funds, endowments and foundations, intermediaries and advisors, as well as high net worth individuals and retail investors. The firm has built one of the largest networks of offices of any dedicated asset management company with more than 700 investment professionals covering the world's investment markets, offering a comprehensive range of products and services.

Schroder Investment Management North America Inc. (“SIMNA Inc.”) is an investment advisor registered with the U.S. SEC. It provides asset management products and services to clients in the U.S. and Canada including Schroder Capital Funds (Delaware), Schroder Series Trust and Schroder Global Series Trust, investment companies registered with the SEC (the “Schroder Funds”). Shares of the Schroder Funds are distributed by Schroder Fund Advisors LLC, a member of the FINRA. SIMNA Inc. and Schroder Fund Advisors, LLC are indirect, wholly-owned subsidiaries of Schroders plc, a UK public company with shares listed on the London Stock Exchange. 

Further information about Schroders can be found at www.schroders.com/us.

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The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.