The millennial generation has already played a significant role in effecting positive change through their buying behaviour, with the phasing out of single-use plastic and other irresponsible practices being brought to light across many of South Africa’s major retailers.
However, while you may be one of these eco-conscious consumers actively “voting with their wallets” against irresponsible practices that hurt the environment, you may not be aware that your money could be making an even bigger impact simply by being invested responsibly.
This is according to Jana van Rooijen, responsible investment specialist, who says that environmentally-conscious South African millennials possess the power to drive real change through their investment choices. “By choosing to invest your money in companies that are committed to sustainable and responsible practices, you can drive change on a much greater scale, by engaging with big corporates to pay more attention to environmental, social and governance (ESG) issues.”
On an international level, van Rooijen says this is already happening. “This highlights the gradual global movement towards more responsible investing, which is being largely championed by millennials who believe that their investments can influence global issues like climate change.”
She refers to the results of a recent Morgan Stanley survey, which show that millennials in the US are leading the charge when it comes to sustainable investing. “The survey’s findings reveal that 86% of millennials expressed interest in the idea of sustainable investing, while 61% reported making at least one sustainable investing decision within the past year, and 75% expressed a belief that their investments could make an impact to reverse climate change.”
Momentum Investments does not separate out specific “green investments” within its suite of products. Instead, van Rooijen says that responsible investing principles are integrated throughout all savings and investment products. “Responsible investing is part of our core belief and sustainable and responsible investment practices are a material factor underpinning our long-term success.
“We therefore consider the ESG risk of our investments to be relevant to the performance of the overall objective – across all asset classes, sectors, markets and through time,” she explains, adding that all Momentum Investments solutions and investment management businesses are signatories to the United Nations-supported Principles for Responsible Investment (PRI). “This means we are part of an international network of investors working together to put the Principles for Responsible Investment into practice.”
Dispelling the common investor concern that the performance of responsible investments is poor, relative to other investments, van Rooijen says that quite the opposite is proving to be true. “There is actually a growing body of research that supports the strong long-term financial performance of responsible investments.
“This makes sense when you think about it, because the companies that are taking active measures to incorporate sustainability into their business practices, are likely going to prove to be the most resilient over the long-term.
“Responsible investing therefore does not mean forgoing returns to help the environment or effect social change. Rather, responsible investing is about using your money to make a positive influence, while earning returns in the process,” van Rooijen concludes.