There’s a growing body of evidence that responsible investing’s (RI) time has come. In addition to almost US$60 trillion in assets managed globally by signatories in the United Nations-supported Principles of RI, surveys conducted around the world show that investors are increasingly interested, and looking for, investments that not only produce strong returns, but do so in an environmentally and socially responsible way. Millennials show the strongest interest in RI and represent an important opportunity for financial advisors and asset managers alike.

Demand for responsible investments in Canada is strong among millennials, who were born between 1980 and 2000 and now represent the largest demographic in North America, and is expected to grow, according to Millennials, Women and the Future of Responsible Investing, the first national survey of Canadian millennials and women exploring their views on RI. The survey, conducted by Ipsos-Reid and on behalf of Vancouver-based OceanRock Investments Inc., found that Canadian millennials were far more likely than Generation X investors or baby boomers to show an interest in, and an understanding of, RI. It found that two-thirds of millennials surveyed consider environmental, social and governance (ESG) factors when making investment decisions compared with 48% of Gen. X investors and 40% of baby boomers.

Interestingly, millennials were far more likely than older investors to expand their definition of value beyond strict financial terms by considering the positive societal impact of their investments. According to the OceanRock survey, half of millennials seek a balance between rate of return and positive social impact, compared with only 36% of Gen. X investors and less than a third of baby boomers.

The survey found that millennials placed the highest value on companies with good environmental and social practices, as they believe these firms would be more profitable and better long-term investments. The majority of millennials also strongly believed that companies with good environmental and social practices would provide investors with better protection against downside risks. Of significant note, almost three-quarters of millennials said they would likely exit an investment because of objectionable corporate activity on environmental and social issues, compared with 56% of Gen. X investors and 47% of baby boomers.

The OceanRock survey results suggest that there’s a significant opportunity for advisors and mutual fund managers to respond to the investment needs of millennials by incorporating ESG factors into the selection and management of investments and highlighting the results of their ESG activities to clients regularly.

The study noted that as millennials age, it will be increasingly likely that they will be looking to their financial advisors to respond to their need for RI. In fact, 82% of millennials surveyed believe that RI will become more important in the next five years, with two-thirds of saying it is important for their advisors to be knowledgeable about RI issues and trends.

“The data highlight a strategic opportunity for advisors to add even more value by educating themselves and their clients about RI,” says Fred Pinto, head of wealth and asset management with Qtrade Financial Group. “Advisors who are knowledgeable about RI products and ESG issues are better positioned to attract millennials’ assets today and in the future, as this generation accumulates and inherits more wealth in the years to come.”

The survey also highlighted some interesting information about Canadian women. Although surveys conducted in the U.S., such as one done in 2015 by the Morgan Stanley Institute for Sustainable Investing, suggest distinct differences between men and women about their attitudes toward RI, the same could not be said in Canada. In fact, Canadian women in the OceanRock survey demonstrated almost exactly the same responses as men regarding their positive feelings about RI.

The survey did find, however, that women were twice as likely as men to indicate that they either weren’t sure or didn’t know what their views were on questions related to RI. This suggests a clear educational opportunity for RI professionals, as women investors may actually be more open to RI once they are more informed.

Pinto suggests that these findings present an opportunity for investment advisors to better serve women: “Women were more likely than men to indicate that they require more information about RI, and more women believe it’s important for their advisor to be knowledgeable about responsible investing. Advisors who take steps to inform their clients about RI are positioning themselves to see positive results.”

This study found that the age of a Canadian investor has greater influence than gender, education or geography in determining an individuals’ interest in RI. In the long run, responding to millennials’ desire to be responsible would seem to be the most sustainable act the investment industry can do.