• Lea Jakobiak

Millenials Ensure Impact Investing Is Here To Stay

Updated: Mar 25, 2019

We were invited to a panel discussion hosted by FleishmanHillard Fishburn, featuring Spokespeople from the UN, Diageo and Barclays, to talk about the rise and rise of sustainability and impact investing.

Millenials want to know companies are investing in human rights

You may be hearing the term ESG more and more.

It stands for environmental, social and governance, and refers to the three central factors in measuring the sustainability and ethical impact of an investment in a company or business.

ESG Investors are growing, meaning that companies now have to demonstrate greater tangible impact.

If they make a mistake, they pay the price.

Take the VolksWagen emmissions scandal for example. The company took the eye off the ball, which subsequently led to an annual share price drop of 40%!

According to Paul Afshar, Partner of Purposeful Business at FHF, 74% of investors are willing to give sustainable investing more time, and 96% of institutional investors plan to engage with companies in ESG.

He was the moderator at the event, and joined by Jochen Krippner, Vice President, ESG & Sustainability Reporting, Barclays, Harriet Howey, Global Sustainability Reporting, Diageo, Lauren Smart, Managing Director at Trucost (part of S&P Global), and Joy Frascinella, Head of PR, United Nations Principles for Responsible Investment (UNPRI).

Paul Afshar, Partner, Purposeful Business, FHF

So who is driving the change that's making investors and companies take note?

Millennials (people aged between 18-36). The demand for greener products is there - and it’s turning into money.

Millenials are a very vocal group, who wants to know that they're not investing in coal, but investing in human rights! They're engaged with Parliament and Congressmen.

Millenials (aged 18-36) are a very vocal group

Here are a few examples of how companies are adapting to this demand:

  • Diageo, explained that a lot of its alcohol brands are made from water. As a result, the company’s investors want to know what Diageo is doing to mitigate issues surrounding water. So, Diageo is doing a lot to improve water conditions, in Africa in particular.

  • Barclays, which has 23 million customers in retail banking alone, has introduced a mortgage that's based on the energy efficiency of your home

  • Bank of America Merill Lynch recetly said that a lot of their investors were saying they had $10 million to invest - but want to invest in sustainability. So the bank revamped their entire business model for those customers.

  • Monzo, the popular UK challenger bank, has introduced an ethical banking blog

Diageo says its investors want to know what it's doing to improve water conditions

Another acronym you may now hear more about is TCFD.

It’s backed by Bank of England Governor Mark Carney, and basically says that all companies and insurers should all now be reporting climate risks in their annual reports.

Keep going millenials, investors are taking note, businesses are becoming more purposeful and impact investing is here to stay.

Thank you Paul Afshar and FHF for having us!

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