An influx of young investors are leading a charge of socially responsible and sustainable investing, funneling their money into investments and projects that serve the greater good.
In financial circles, socially responsible investments (SRI) and funds geared toward environmentally, socially and governance-friendly (ESG) projects have grown in popularity with millennial investors. Those activities include avoiding investment in companies associated with addictive substances and vices — like alcohol, gambling and tobacco — and seeking out companies engaged in social justice or environmental sustainability.
Socially responsible investing (SRI) now accounts for $26 trillion, a 2018 study from Harvard University's Kennedy School of Government found, which is more than quarter of all assets under professional management worldwide. The study found that millennials are increasingly making investment decisions that weigh the impact on society.
Separately, U.S. Trust found that 76 percent of high net-worth millennial and Generation Z investors have reviewed their assets for ESG impact, while Morgan Stanley found millennial investors to be twice as likely as others to invest in companies that incorporate ESG practices.
Although sustainable investing has existed since the 1970s, the new wave of young investors are interested in more than just stable financial returns.
"The Gen-Z and Millennial generation is extremely misunderstood," said Brandon Krieg, Co-founder and CEO of Stash, a micro-investing app with a heavy millennial and Gen Z client base. "They do care about activism and the brands that they agree with."