Most Investors Plan ‘ESG’ Investments over the Next One to Two Years.
Washington, DC, October 12, 2021 : Nearly 8 out of 10 investors (78%) expect to add an ESG-focused investment to their portfolios over the next one to two years, according to a new nationwide poll released today by Kiplinger’s Personal Finance magazine in partnership with Domini Impact Investments LLC.
ESG investing, defined in the survey as “considering a company’s record on environmental practices, social issues and governance policies before investing,” resonates most with younger investors: 91% of Millennial investors say they are likely to add these investments to their portfolios soon, compared with 80% of Gen X investors and 68% of Baby Boom investors. ESG investing is also sometimes referred to as sustainable, impact, values, or socially responsible investing.
Overall, more than 70% of respondents say a company’s environmental practices, social issues management and governance policies are very or somewhat important to them when choosing investments. And 41% say they have already invested in stocks or bonds to try to address these issues. Kiplinger and Domini surveyed 1,029 investors ages 25 and up to learn about their views on ESG, what issues they care most about, and how they prefer to invest.
“Investors increasingly want to make a difference,” said Mark Solheim, editor of Kiplinger Personal Finance , “by choosing to invest in companies that can not only grow their profits, but also have a positive impact on their employees, shareholders, community and especially the planet.”
A majority of respondents overall believe ESG investing can make a difference in the way companies manage their businesses: But 75% of Millennial investors believe this to be the case, followed by 58% of Gen X investors and almost half (47%) of Baby Boom investors. And when asked to pick an ESG investing goal they care most about, more cited the environment than other options:
- 35% want to make a positive impact on the environment
- 24% want to build a better future for all
- 15% want to invest in their local community
- 12% want to avoid investing in industries such as weapons, fossil fuels or for-profit prisons
- 8% want to create more workplace diversity
- 6% want to advance social justice
“The good news is that companies like Domini can help people align their investments with their values” said Carole Laible, CEO of Domini Impact Investments LLC. “With our decades of experience, we apply our environmental and social standards on behalf of the thousands of investors coming together in our stock and bond mutual funds to promote ecological sustainability and universal human dignity.”
Encouraging clean energy to mitigate climate change (19%) and avoiding the depletion of natural resources and protecting ecosystems (18%) were the two most important environment-related outcomes for the ESG investor. Notably, Baby Boomers were significantly more likely than Millennials or Gen Xers to identify the depletion of natural resources as most important.
How people invest
When it comes to ESG-focused investing, most respondents say mutual funds are the way to go. Nearly half of respondents overall (49%) would choose them over other types of investments. An even larger percentage of baby boomers (58%) say this is their preferred strategy.
What’s more, three-fourths say they would like to invest in an ESG fund through their workplace retirement plan. And more than half (53%) say that having this option would have a positive impact when evaluating a benefits package offer. This was highest for Millennials, 72% of whom would consider it a plus.
While respondents indicated overall enthusiasm for ESG investments, they point to a few factors that could keep them from making a bigger investment in ESG stocks, bonds or funds. These include concern over performance, but also:
- Not enough information about potential investments
- Possibility of a corporation making a false ESG claim
- Uncertainty about how to get started with ESG investing
“We are encouraged that our mission and exclusive focus over the years has become more crucial to investors and companies alike” remarked Carole Laible. “Our hope is that we can help make ‘investing for good’ the way that all investing is done.”
What’s clear is that the staying power, popularity and prevalence of ESG funds is all but a given. When asked their opinion about the future of ESG investing, just 11% of respondents indicated they believe ESG investing is a fad that will fade with time. And nearly two-thirds believe ESG investing will continue to grow in popularity or push more companies to adopt ESG principles.
The Kiplinger-Domini national public opinion poll on ESG Investing was conducted August 4 to August 10, 2021, with 1,029 respondents. The survey has a margin of error of +/- 3.52%. Respondents were screened for age (25 and older), annual income (at least $75,000), and non-retirement investments (minimum of $10,000). A survey quota was implemented around familiarity with the term “ESG investing” to ensure that about half of the respondents were familiar with the term prior to taking the survey. Responses for some questions may not add up to 100 due to rounding or may exceed 100 if respondents could select more than one response.
About Kiplinger’s Personal Finance
For a century, the Kiplinger organization has led the way in personal finance and business forecasting. Founded in 1920 by W.M. Kiplinger, the company developed one of the nation’s first successful newsletters in modern times. The Kiplinger Letter, launched in 1923, remains the longest continuously published newsletter in the United States. In 1947, Kiplinger created the nation’s first personal finance magazine. Today, The Kiplinger Washington Editors, Inc., is a wholly-owned subsidiary of Future PLC.
Located in the heart of our nation’s capital, the Kiplinger editors remain dedicated to delivering sound, unbiased advice for your family and your business in clear, concise language.
Domini Impact Investments is a women-led SEC registered investment adviser that empowers both individual and institutional investors to make a difference, one investment at a time. By applying social, environmental, and governance standards across all of its investments, Domini harnesses the power of finance to create a better world. With an exclusive focus on impact investing that aims to create positive social and environmental outcomes while seeking competitive financial returns, Domini ensures every dollar is channeled in a way that achieves its goals of universal human dignity and ecological sustainability. The firm’s focus on continuous innovation and community engagement creates strength in numbers, allowing Domini to fuel tomorrow’s prosperity and make “investing for good” the way all investing is done.
Learn more at Domini.com .
Read Domini’s 2020 Impact Report.
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