5 Tips to Attract Youth ESG Investment
“The youth is the hope of our future.”- Jose Rizal
This quote is a stark reminder for ESG investors across the globe to act on environmental sustainability by looking to the upcoming generation of investors. According to USresearch, while millennials are purported to be more interested, generationally, in ESG issues, Gen X are the prime investors in ESG at present in America. So, how do companies make sure the younger generation is aware of and attracted to ESG investments, and that this is not just a social media trend that passes by? Here are 5 tips to draw the youth towards ESG investing:
Make ESG a priority
Companies need to realise that there has been a massive paradigm shift when it comes to the younger generation’s job possibilities amid the COVID crisis. The majority of youth are now looking for jobs that offer the option of remote or hybrid working, and also the fact that their mental or physical health is not being affected in a detrimental manner. Companies need to understand the mindset of younger investors and how they can make an effective ESG strategy in order to attract and retain their talented workforce. They should engage with their younger employees to make them aware of the concept of ESG, how it functions, and its global impact.
2. Easy access to sustainable investing
Gone are the days when one used to chase after investor companies to understand their investment policies, principles, and funds. With the digitalisation of corporations and the boom of social media, youth are much more aware of climate change through news articles, blogs, videos, and digital life in general. With just a click of a button or a simple Google search, one has easy access to multiple ESG investment options along with collated information on ESG funds. It has become easier for the younger generation to make sound sustainable investments with less hassle, unlike the older generations.
3. Increase participation
Since the pandemic arrived, company meetings have been virtual, held via Google Meet, Zoom, and so on. Continuing to do so means that companies worldwide can engage and increase employee participation in shareholder meetings, helping to form better engagement with shareholders and younger investors. As a result, managing directors, and board investors can contact young shareholders to address their concerns regarding their ESG investment funds wherever and whenever. Companies can share their viewpoints on ESG, when convenient, and help younger investors make sound sustainable investment decisions.
4. Value-driven investments
Everyone wants to make a big buck, and the only difference is whether they are doing it conscientiously or not. Many people are passionate about environmental causes and want to make a change for the better. So, why not make a smart sustainable ESG investment while keeping your profits in mind? Companies should make younger investors or employees take into consideration ESG factors while investing, and demonstrate how those investments can provide solid returns, just as with non-ESG options. Younger investors need to understand that their choices can be in line with their values and morals.
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5. Acceptance of ESG investing
We are all witnessing the global harm caused by climate change, be it forest fires due to soaring high temperatures or a rise in sea levels, and the younger generation is undoubtedly key to the future of this planet. This has led to a wider acceptance of ESG investing all across the globe. So, companies and investors must now take critical ESG factors and ratings into account while making long-term investment plans, and they need to limit climate risk or potential damage from business activities, a reason why the financial sector is looking to attract the younger generation of investors by providing better sustainable investing options which are beneficial both to them and their bank accounts.
The feedback loop of youth investment
It is up to both larger corporations as well as SMEs alike to take the initiative in capturing the ever-changing attention of the younger generation of investors. Through various ESG programmes and awareness, companies must transparently show how ESG investments not only make pragmatic financial sense, but constitute the necessary direction for investing that will, in turn, provide incentive for companies to make ever greater ESG policy implementations.
This new direction must ultimately be regenerative, and that will only endure with the participation of the next generation.
Refer to KnowESG’s growing index ofESG Ratings to assess how well companies are implementing ESG policies.