Sustainable business practices and investment options are becoming increasingly important to investors, according to a survey released Friday by Morgan Stanley.
Seventy-one percent of active individual investors in the study described themselves as interested in sustainable investing, and 65% expected sustainable investing to become more prevalent over the next five years.
Total volume of sustainable investments — speaking in terms of environmental, social and governance practices — nearly doubled from 2012 to 2014, from $3.5 trillion to $6.6 trillion, according to the Forum for Sustainable and Responsible Investment.
However, investors had yet to fully translate corporate advantages into investment action. A majority of respondents in the survey said sustainability and financial returns implied a trade-off for investors.
The Brunswick Insight team conducted the survey on Morgan Stanley’s behalf in mid-November, collecting data from 800 individual investors and from an additional oversample of 200 millennials.
The survey found that millennials and women were at the forefront of sustainable investing and sustainability.
Eighty-four percent of millennials expressed openness to the idea of sustainable investing, compared with 79% of Gen X respondents and 66% of baby boomers.
Millennials were twice as likely to invest in companies or funds that target specific social/environmental outcomes and to divest because of objectionable corporate activity.
Seventy-six percent of surveyed female investors showed interest in sustainable investing, compared with 62% of their male counterparts.
Moreover, 40% of women said they would consider both rate of return and the effect of their investment when making an allocation decision, while only 23% of men said they would do this.