Special Report
| Next generation outlines 'social spending' plans |
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| Written by Adrie van der Luijt | |
| Wednesday, 28 May 2008 | |
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Providers must give green and ethical options to survive, a new survey suggests.
Financial services providers were delivered a warning shot by their next generation of customers, as UK teenagers revealed plans to direct future spending power at social and environmental issues. Four in five (85 per cent) believe controlling where they spend and invest will allow them influence, with over half (54 per cent) claiming their generation better understands its financial clout than their parents. Almost three quarters (73 per cent) say options to support social and environmental issues will help determine their future choice of financial services providers. List of 'no-go' areas The My Generation: Social Spending Power study, commissioned to launch the UK's first National Ethical Investment Week (NEIW), reveals the potential impact of a more socially-conscious generation. Savings (53 per cent) and investment (52 per cent) products top the shopping list of financial products where teenagers say they will demand ‘ethical' options from providers, followed by mortgages, and pensions. They have outlined a list of ‘no-go' areas, where they will refuse to have their money invested, headed by tobacco companies and weapons manufacturers. Instead, they want the option to direct their money towards companies that ensure they do not use child labour, or are providing new technologies to protect the environment. Penny Shepherd, chief executive of the UK Social Investment Forum (UKSIF), which is organising NEIW, said: "Financial services providers, and indeed, all businesses, cannot afford to dismiss the results of this report as youthful intent. "This will be the most socially-aware generation of consumers yet, who have been exposed to more information about social and environmental issues, and are also very aware of the power of the pound. If they are to attract and retain their custom, providers must sit up and take notice of their views," she added. Little or no understanding of green and ethical investments Over 1,000 15 to 19-year-olds, across the UK, were surveyed and told researchers that their generation has a responsibility to ensure investments are not used to support companies that harm the environment (85 per cent) or do not behave ethically (82 per cent). They added that they would use their spending power to make a real difference in social and environmental issues (65 per cent) and claimed to be more socially aware and responsible than their parents (65 per cent). A separate poll of 1,500 UK adults revealed that, while they share some of the same sentiments, they lack the knowledge to back beliefs with financial action. Six in ten (62 per cent) say the option to support social and environmental issues is important to them in their choice of financial provider, but 67 per cent have little or no understanding of green and ethical investments. Just 11 per cent currently invest in green and ethical funds but lack of awareness (71 per cent) is the key reason behind that, compared with just (16 per cent) who say social and environmental issues are not a priority for them. Strong feelings James Dalby, fund development manager at Norwich Union, said it was important to consider the key results of the research. “The younger generation have strong feelings about green and ethical issues. This can be seen from the views on recycling, energy efficiency and where to invest,” he added. Dalby pointed out that teenagers represented a section of the population that was a vital part of the future and would ‘lobby' older generations on a whole range of social and environmental issues. “This will certainly help to raise the profile of green and ethical investing," he concluded. George Latham, head of SRI Funds at Henderson Global Investors, said that the report showed that ethical investment would continue to grow as the next generation embed their social conscience into every aspect of their lifestyle from spending to saving. "This generation is also more sophisticated in its understanding of ethical issues. It recognises that good investment is not only about avoiding unsustainable and unethical business practices but also investing in those companies that provide solutions to today's challenges such as climate change," he said. Part of the landscape Julia Dreblow, SRI marketing manager at Friends Provident, said that for these investors of the future, the perception that ethical investment is 'new' or 'out of the ordinary' simply does not feature. “Like social and environmental challenges, it has always been part of the landscape for them. As UK ethical investment moves towards its 25th year it is wonderful to see research indicating its potential as an increasingly relevant and appealing force for change,” she added. Related articles
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