Investment trends

Millennials and Gen Z are transforming the investment world, placing a strong emphasis on environmental, social, and governance (ESG) factors.

Their commitment to sustainability 🌍 is driving real change in financial markets and influencing corporate strategies 🌿. Here’s how these generations are reshaping sustainable investing for a better future 🌏.

Values-Driven Investing: A New Norm 🌟

For Millennials and Gen Z, investing is about more than just returns 📊—it's about staying true to their personal values.

According to Deloitte's 2024 Gen Z and Millennial Survey 📄, nearly nine in ten Gen Zs (86%) and Millennials (89%) say that having a sense of purpose is essential to their job satisfaction and well-being 🌱.

This commitment extends to their investments, with younger investors increasingly favoring companies that prioritize strong ESG practices 🌍.

The rise of ESG Funds 📈🌱

The demand for ESG funds has surged, led by Millennials and Gen Z who are increasingly seeking investments that align with their values 🔥.

A recent survey by the Morgan Stanley Institute for Sustainable Investing found that more than three-quarters (77%) of individual investors globally are interested in investing in companies or funds that aim to achieve financial returns while also considering positive social or environmental impact 🌍.

Notably, 54% of respondents said they plan to increase their allocations to sustainable investments over the next year 📈. This shift underscores the widespread interest in sustainable investing as both a financial and ethical priority.

Additionally, the study highlights that 80% of global investors believe it’s possible to balance financial returns with a focus on sustainability 🌿.

Climate action ranked as the top sustainable investment theme, with 15% of investors prioritizing it, followed by healthcare, water solutions, and circular economy initiatives. This value-driven approach among Millennials and Gen Z investors is fueling the growth of ESG funds, reshaping financial markets and pushing companies to adopt and report on sustainable practices.

Do the young have the money?

Technically, not yet.

But Millennials and Gen Z over the past three years experienced the highest growth in financial assets compared to other age groups.

A survey by the FED said that in the US Gen Z alone saw their financial wealth triple to nearly $6 trillion in 2024, up from just $2 trillion in 2019 💵.

This wealth surge was fueled by increased ownership of stocks 📊 and retirement accounts, with more than half (55%) now holding retirement plans through employers or independently—an impressive six-point rise since 2019. Additionally, the early 2020s retail trading boom saw young investors flock to individual stocks (22%) and mutual funds or ETFs (9%) 📈📊.

As their financial portfolios grow, so does their need for specialized financial advice.

With 44 million households and rising, Millennials and Gen Z are prime candidates for advisors who can navigate their unique needs and build long-term relationships 🌍💼. Advisors willing to embrace these younger generations now stand to gain clients with lifelong growth potential, especially as older households shift toward wealth decumulation.

In short, Millennials and Gen Z are setting the stage for a future where financial prosperity aligns with purposeful, sustainable investing 🌿.

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