The investing landscape is changing and changing fast. As baby boomers are planning for and entering retirement that leaves the door wide open for a newer younger generation of investors to enter the market.
Over the last decade, impact or socially responsible investing is directed to important societal and environmental causes while achieving long-term returns. Led by millennials, this relatively new investment approach is growing not only because of a generational shift but will continue to because of gender attitudes as well.
According to an August 2018 report by American Century Investments, 60% of Millennials believe that impact investing is somewhat or very important, which is higher than both Gen X’ers and Baby Boomers.
Millennials’ desire for more social responsibility and impact is one that has been heavily covered over the last few years. The American Century report though, made an important discovery:
- 57% of women were more likely to consider the impact on society an important decision factor versus 51% of men.
This is significant to note for a few reasons.
Women of all ages and backgrounds struggle with the pressure to earn enough, access education, care for a family and plan for retirement. Wearing multiple hats, achieving financial independence and increasing roles in being the primary breadwinner in over 40% of American households has increased the urgency to understand investing.
It is for this reason for why financial education and empowerment is growing in many educational institutions geared toward women.
Despite the urgency, women are finding themselves to be hesitant when it comes to entering investing. Several factors that stem from decades of complex-sounding financial jargon mixed with headline news have created myths and intimidation.
There is a great opportunity to begin to bridge that divide with women.
A Real Opportunity With Sustainable Investing
The American Century Investments report highlighted women’s stronger understanding of the importance of impact investing, on the other hand, the report further noted much less familiarity with this investing approach among women.
Women were known to volunteer for causes they believed in and wanted more of an opportunity to create a larger impact in the way wealthy philanthropists do. Millennial women especially, are more likely to engage with brands that prioritize social responsibility.
This is where there is a strong opportunity for sustainable investing to connect with women and open the gates to bridge the investment divide. Removing fear and improving familiarity all begin with educating.
Newday Impact Investing is working to ensure that investors are educated and empowered as well as providing a transparent platform to make this effort very convenient and affordable.
Women along with younger investors will be a driving force in the growth of impact investing heading into the next decade. In a study of affluent women by Calvert Investments found that 95% ranked “helping others” and 90% ranked “environmental responsibility” as important.
Women search for products and companies with connections to what is important to them. They are more likely to engage with brands where issues of social responsibility and the environment are prioritized.
The Global Impact Investing Network is forecasting the market to grow to $500 billion by 2020.