5 Drivers Behind The Sustainable Investing Shift

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5 Drivers Behind the Sustainable Investing Shift

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Against all odds, sustainable investing in the U.S. smashed records in 2020.

Estimated net flows reached $20.9 billion in the first six months alone—that’s nearly equal to the amount of new money invested in all of 2019.

What is driving the shift to sustainable investing? This visual dashboard from Raconteur explains five key drivers, from generational shifts to investors’ preferred strategies.

DRIVER #1:

Millennial Investors and Personal Beliefs

Interest in sustainable investing is booming across the general population. However, there’s a clear generational trend, as well.

While the portion of each group that is “very interested” in sustainable investing has shot up since 2015, this share is significantly higher for millennials.

Year General Population Millennials
2015 19% 28%
2017 23% 38%
2019 49% 70%

Another correlated trend emerges with this.

These days, investors are more likely to follow their conscience. According to a recent report by Schroders, the majority of investors will not budge on investing against their beliefs, even if returns were theoretically higher.

  Level of Investment Knowledge
Would you invest against your personal beliefs? Beginner Intermediate Expert
Yes, if returns are higher 18% 20% 29%
No, I would not invest against my beliefs. 82% 80% 71%

DRIVER #2:

Top Themes of Interest

Powered by these personal beliefs, which categories are attracting investors? It turns out many investors are very interested in including environment-related themes into their portfolios:

  • Plastic reduction: 46%
  • Climate change: 46%
  • Community development: 42%
  • Circular economy: 39%
  • Sustainable Development Goals: 36%
  • Multicultural diversity: 30%
  • Gender diversity: 30%
  • Faith-based values: 24%
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Disclosure: None.

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