The survey, which assessed the attitudes of more than 400 millennials globally about SRI, found that while more than four in five (81%) would be interested in investing in socially responsible or sustainable investment products, a similar proportion (82%) believe more education is needed to drive interest in SRI.
Almost half (49%) of those surveyed currently have investments, but despite the apparent interest in responsible investing, just 9% currently invest in a fund focused on sustainability issues.
It also found that more than half of respondents (57%) said that digitisation, including digital investment platforms and live chat functions, would encourage them to invest in responsible investing products.
Will Oulton, global head of responsible investment at First State Investments, said: “Much has been written about millennials and their consumer practices and behaviours, but little work has been done into how such behaviours may translate in terms of their choices as consumers of financial products and services.
“It is clear from the survey that education is critical to convert interest into action, placing the onus on the financial industry to decipher the meaning of and improve accessibility to responsible investment products, for this group.”
The survey revealed that millennials are driven by a desire for their investments to have a positive impact, and also to boost returns.
More than a quarter (28%) highlighted impact investment – the ability to have a positive social or environmental impact, alongside financial return – as one of the themes of most interest to them, while 57% think the application of environment, social and governance (ESG) can boost long-term returns.
Half of those surveyed also said that perceived lower financial returns would stop them investing in responsible investment products, while 46% cited the perception of higher fees would be a barrier.
More than a third (37%) said that environmental considerations was the theme that they are most sympathetic to.
Oulton added: “The survey has revealed how engaged and ambitious this group is when it comes to future savings. When taken alongside the interest in RI, there is the potential for a huge inflow into ESG-focused products over the next 10 years as millennials reach their savings targets.
“Our industry needs to act now to ensure this group has the access and information needed, but also to dispel some of the underlying perceptions about the negative impact RI can have on returns.
“There are implications for providers across the entire investment ecosystem, including scheme trustees, managers, advisers and platforms. Transparency, access to information, and better reporting will be key factors in ensuring the interest in RI from this group is translated into action as their disposable income increases.”
More than three quarters (78%) of millennial respondents said that expertise in socially responsible/sustainable investing would be a reason to go to a financial services provider.
Lastly, around 82% said they would tolerate only five or less controversial company incidents before changing investments, highlighting the importance of good governance practices.