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Bridging the Gap – From Interest to Action in Sustainability

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It is the latest trend for millennial consumers to put their money where their ideals are. The millennials are choosing products and services from brands that reflect their concerns about the environment and social issues. This generation is also providing a bottom-line incentive for companies to adopt more sustainable practices.

However, a disconnect has also been observed between millennial consumers who have an interest and those who act on the interest. The latest survey by Morgan Stanley Institute for Sustainable Investing has revealed that 85 per cent of investors has shown interest in sustainability, however, only 52 per cent of the general public has undertaken a sustainability investment (for example, investing in funds aimed at specific environmental or social goals). Millennials fared somewhat better, at 67 per cent.

That gap may indicate some lingering doubt over the financial advantages of sustainable investing. The survey did find evidence that many investors still perceive a trade-off, with 64 per cent responding that “investors must choose between financial gains and sustainability.”

On the bright side, the survey also indicates that investors are primed to increase their activity in the sustainable investment field, with 86 per cent of respondents believing that “corporate ESG practices can potentially lead to higher profitability and may be better long-term investments.”

In addition, the survey has found that 88 per cent “believe that it is possible to balance financial gains with a focus on social and environmental impact.”

Overall, the survey has suggested that individual consumers control a large, untapped well of financial resources that could help accelerate the transition to a low carbon economy, in addition to addressing other areas of social concern. But in order to be able to take advantage of this, the stakeholders in the financial services professionals will have to play a crucial role in shaping and channelizing investor choices to achieve maximum impact.