Younger investors are more willing to put money behind environmental and social goals — even if it's costlier
While the average investor in their twenties or thirties was willing to lose between 6% and 10% of their investments to see companies improve their environmental practices, the average Baby Boomer was unwilling to lose anything.
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The world’s largest asset management companies have come out swinging on environmental, social, and governance (ESG) investing, with heavy hitters like BlackRock, Vanguard, and State Street declaring their intention to use their proxy-voting power to press for everything from boardroom diversity to net-zero carbon emissions.
But is that what individual investors really want? Maybe. Maybe not.
That’s the mixed message from a new survey of investors released by Stanford Graduate School of Business, the Rock Center for Corporate Governance, and the Hoover Institution.
The survey, which polled 2,470 investors with savings ranging from less than $10,000 to more than $500,000, revealed sharp differences along generational lines, with younger shareholders saying they are far more eager to have fund managers pursue ESG objectives — and also far more willing to risk higher losses in the process.
Overall, 83% of all respondents said they think their personal views should be considered when mutual fund managers use their shares to vote on environmental or social issues. Their views diverged from there.
This piece originally appeared in Stanford Business Insights from Stanford Graduate School of Business. To receive business ideas and insights from Stanford GSB click here: (To sign up: https://www.gsb.stanford.edu/insights/about/emails)