will-oulton

Will Oulton
Global Head, Responsible Investment
First State Investments

Giving millennials the Responsible Investments they want

We carried out a research project with Kepler Cheuvreux into people’s views and understanding of responsible investment (RI). The survey was worldwide, though most of the 540 respondents were British. We focused our report on the 79% of respondents who were born between 1980 and 2000 – the ‘millennials’ now in the workforce. Our research shows a growing interest in RI from younger pension savers and investors.

8 trends we identified in our research:

What these trends mean for the investment industry

DC schemes need to explain their RI policies to members. Consultants need to help trustee boards to decide whether RI will be a part of their default fund, or just their self-select options.

Investment managers need to be clear about their approach to RI. They should show ESG outcomes of funds alongside financial performance. They should develop their expertise and tie incentives to the quality of their RI work. Managers shouldn’t state or imply that RI investments don’t perform as well.

Regulators and policy makers need to support these changes, with standards for trustee training and education resources for members. Trade groups should promote consistent definitions for RI classifications and use independent measures to test the RI claims of investment managers.

Investment platforms and fund selectors should provide clear information for investors, on RI, where money is invested and the expertise of their fund managers. They need to offer more RI funds and easy ways to compare them.

The investment industry needs to understand that millennials’ attitudes are becoming the new normal: these are the mainstream investors of tomorrow. There is a great opportunity here, but there’s work to do if we are to make the most of it.

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