#thesmart | Sustainable investment joins the mainstream

“Having experienced the financial crisis, millennials are suspicious of financial institutions. They also believe they can change the world. “


via The Economist


Growing demand has spurred Wall Street into action. Goldman Sachs now manages $10.5bn in assets dedicated to “ESG” (ie, meeting environmental, social and governance criteria) and a further $70bn in “negatively screened” assets that exclude the manifestly unvirtuous. TPG, a private-equity giant, last month raised a record $2bn impact-investing fund, with the help of Bono, a rock-star do-gooder.

The young are SRI’s big hope. In the coming decades, they will inherit pots of money. Unlike many of their baby-boomer parents, they believe in sustainable investing. There may not be much evidence to support claims that SRI outperforms the market, but there is enough to show it can match it. Having grown up in a digital age, millennials are both more exposed to the world’s woes, and more likely to use electronic investment tools. Amit Bouri of the Global Impact Investment Network, an industry forum, says more and more banks are contacting it “because clients demand these impact options”. Julia Balandina Jaquier, a family adviser in Zurich, says that “boomers see doing good as separate from investing; whereas millennials don’t see how you could possibly separate the two.”

Read the article in full here.