Investing August 11, 2017

Sustainable Investments In 401(k)s Attract Millennials

Ninety percent surveyed are interested in pursuing sustainable investments as part of their 401(k)s.
Reported by

Millennials are almost universally interested (90%) in pursuing sustainable investments as part of their 401(k)s, according to a study by the Morgan Stanley Institute for Sustainable Investing.

The firm says the survey results imply that offering sustainable investment funds as 401(k) options may be an additional way for companies to attract and retain Millennial talent in competitive job markets. The survey also revealed more than half of Millennial investors believe that companies with a focus on social or environmental performance are more innovative and roughly half believed they attract higher-quality talent (40% for environmental focus and 52% for social focus).

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

Additionally, Millennial investors remain three times as likely as the general investor population to have worked at or applied to a company because of its stance on social or environmental issues (19% compared to 6%).

These findings are in line with the general survey findings that three-quarters of investors overall, and 86% of Millennials are interested in sustainable investing. Investors report an uptick in sustainability-minded investment decisions since 2015 (38%, up from 32%).

Substantial majorities of Millennial investors believe that their own investment decisions can influence climate change (75%) and alleviate poverty (84%).

However, a majority of investors (53%) still believe that investing sustainably requires a financial trade-off. Millennials believe the trade-off myth to a greater degree than the general pool (59%). More than half believe that an investor’s sole responsibility should be maximizing profit (54% vs. 47% in 2015). But data and research have shown that sustainable investing does not negatively affect, and can even boost, returns for investors.

The survey also found while women still lead men in their interest in sustainable investing, the gap in action is narrowing. In 2017, women and men have a statistically equal likelihood of having integrated sustainability into their investment decisions (40% and 36% respectively).

«