Mr Hollands notes: “You don’t have to be managing an ethical fund to recognise that a company which is sloppy in managing its environmental or societal impacts is one which risks shareholder value through potential reputational damage, customer desertion, fines and legal penalties, and potential loss of access to government contracts.”
There is often an assumption that these types of funds appeal more to millennials than other demographic groups. Millennials, those born between the early 1980s and early 1990s, are often said to be the driving force behind the increasing number of ethical and sustainable mandates launched by fund groups.
Research by Triodos Bank among 2,020 UK adults appears to back this up. It reveals in its latest Annual Impact Investing survey that 19 per cent of UK investors are planning to invest in an SRI fund in the coming years, rising to 47 per cent of investors aged 18 to 34.
It also points to millennials as being behind a trend it calls “resist investing”, with 30 per cent of investors motivated to invest in an ethical fund because of events in the news, climbing to 56 per cent of investors in the 18 to 34 age group.
More than millennials
Christopher Greenwald, head of sustainable investment research and stewardship at UBS Asset Management, says he definitely sees particular interest in sustainable investment from millennials.
But others believe this generation cannot take all the credit.
Mr David points to a shift across a much wider group of investors, both by age and type; from charities, private clients, pension funds and financial advisers.
“While there are suggestions that millennials are more interested in SRI investing, we are seeing interest in the area from a range of demographic groups,” notes Ms Tovey.
She adds: “More advisers are talking to their clients about their choices in this area when making investment decisions, which is driving demand.”
However, Brian Dennehy, managing director of FundExpert.co.uk and Dennehy Weller & Co, has observed no interest at all from his clients.
“We have no demand from our client base, either advised clients of Dennehy Weller & Co, or the DIY investors of FundExpert.
“As the millennials get older and have more serious money to invest, they will naturally focus on the more serious investment theme of maximising profits,” he predicts.
But while Ms Dreblow supports research that points to millennials being more interested in this area than older generations, she is careful not to pigeonhole investors.
“It has been recognised that women are more interested in this area than men for some decades,” she explains.
“I have regularly heard stories from advisers who have talked about sitting down to discuss investment with married couples, only to encounter domestic disharmony resulting from a wife being more interested than her husband,” she recalls.
