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Interest in Sustainable Investing in the U.S. Is Rising

Jon Hale, Ph.D., CFA

Jon Hale: Hi I’m Jon Hale, global head of sustainable investing research at Morningstar.

I’m constantly reminded about how many people have become interested in sustainable investing. It’s confirmed in study after study, including two reports that came out this month, one by Allianz and another by Newton Investment Management.

In the Allianz report, nearly 80% of surveyed U.S. investors said they “love the idea of investing in companies that care about the same issues they do.”

And in the Newton report, 86% of U.S. investors surveyed said they were interested in sustainable investing, with 20% saying they were extremely interested.

Our own decision-sciences team at Morningstar has developed a tool that helps investors (and their advisors) understand how much they value sustainability in an investment context. Using the tool, an investor is asked to theoretically allocate money to a series of paired stocks based on their sustainability and return characteristics.

A sustainability-preference score is then calculated based on their answers.

The findings from a sample of 950 respondents nationally:

Seventy-two percent incorporated sustainability into their investment decisions.

And while millennials and women were more sustainability-minded than older generations and men, the differences were generally not that significant.

Bottom line: Interest in sustainable investing in the United States is widespread. If you’re an investor who is interested, you are not alone!

Ask your financial advisor about it, or just get started on your own. There are many low-cost funds and ETFs now available that don’t require big initial investments.

And If you’re a financial advisor, don’t wait around for your clients to ask, chances are most of them would love to know more about sustainable investing and would appreciate you helping them make the connection between their interest in sustainability and their investments.

For Morningstar, I’m Jon Hale. Thanks for watching.