Investors who consider that Socially Responsible Investing (SRI) is only for ‘Green Investors’, are being left behind by those who are willing to adapt to rapidly changing markets.
The Millennial generation is the most educated generation to date, and their interest in SRI has developed as they have grow up in a world of technology and social media. They are well aware of current affairs and issues such as business ethics, the environment, and human rights.
Their generation is also more demanding than previous generations and the market continues to develop new investment instruments to cater for the ethical investors. The focus now is on impact investing, investing for both financial and social benefit.
Looking back at returns for impact investing, we see superior returns over their corresponding risk level in general instruments, and there is also evidence of outperformance of ethical investments over the longer term.
The FTSE4Good benchmark returned 25.5% in the past 5 years, versus a 21% return from the FTSE All-Share. We continually research stable companies that have controlled their ethical, social, environmental and sustainability issues and are likely to outperform. Ethical investing will continue to develop and we will provide updates on the latest products.