Plastic waste reduction, climate change, community development—investors care strongly about environmental and social issues, and that’s reflected in their ever-growing interest in sustainable investing. But the number adopting sustainable investing, while growing, still lags, according to the Institute for Sustainable Investing’s 2019 “Sustainable Signals” report, which surveyed 1,000 active individual U.S. investors. While a majority agrees it is possible to balance financial gains with a focus on sustainability, some still believe sustainable investing comes with a financial trade-off, while others want more choices, more guidance and more reporting on the impact sustainable investing offers.

Scroll down for highlights fromSustainable Signals: Individual Investor Interest Driven by Impact, Conviction and Choice.

Enthusiasm for Sustainable Investing Is at an All-Time High

More than 8 in 10 U.S. individual investors (and 9 in 10 Millennial investors) now express interest in sustainable investing. However, while adoption is growing — with half of individual investors (and two-thirds of Millennials) taking part in at least one sustainable investing activity — it still lags behind interest.

SUSTAINABLE INVESTING - INTEREST AND ADOPTION BY U.S. INDIVIDUAL INVESTORS

Interest in Sustainable Investing
%
%
%
%
%
%
2015
2017
2019
General population
Millennial population
Adoption of Sustainable Investing
%
%
%
%
%
%
2015
2017
2019
General population
Millennial population
General population
Millennial population

Investors Want Products That Match Their Interests

The most popular issues identified by sustainable investors are plastic reduction and climate change, with 46% of those polled indicating they are “very interested” in both.

MOST POPULAR ISSUES WITH SUSTAINABLE INVESTOR

Plastic
Reduction
%
%
Climate
change
%
%
Community development
%
%
Somewhat interested
Very interested

Investors also seek to measure impact against sustainability themes they care about most.

%

of investors say they are interested in receiving a report detailing the impact of their sustainable investments.

Investor Conviction Outweighs Financial Trade-Off Concerns

Respondents were conflicted about the financial returns of sustainable investments, but ultimately their belief in the potential for strong financial performance outweighed their skepticism. When asked if investing sustainably requires a financial trade-off, 64% of investors said yes. However, when asked if companies that engage in leading social, environmental and governance practices have the potential to be more profitable and may be better long-term investments, an overwhelming majority also said yes.

INVESTOR VIEWS ON SUSTAINABLE INVESTING

Sustainability and financial gains are a trade-off
64%
agree
Strongly agree
Somewhat agree
ESG practices can potentially lead to higher profitability and may be better long-term investments
86%
agree
Strongly agree
Somewhat agree

Investors Want More Product Choices

As sustainable investing matures, investors are looking to diversify their investments. Our survey makes clear that the range of products and solutions currently available has not kept pace with investor demand. For example, 88% of survey respondents with access to 401(k) plans would be interested in sustainable 401(k) options, but less than half say they are available.

PERCEIVED AVAILABILITY OF SUSTAINABLE 401(K) OPTIONS

2017
%
2019
%
Yes

INTEREST IF THERE WERE SUSTAINABLE 401(K) OPTIONS

2017
%
%
2019
%
%
Somewhat interested
Very interested

Learn More About Sustainable Investing at Morgan Stanley