The massive transfer of wealth that is now underway will have the ability to accelerate social and environmental impact finance in ways that were not contemplated a decade ago. We can expect the trend to continue for decades to come. The Economist piece on Millennials and sustainable investing highlights the impact of this wealth transfer on the largest asset holders and what this means for the industry. Between the lines, the article also underscores the failure of the advisor market to appreciate the trend (in general, and on a historical basis) and respond to the demands of a “new” client base. Critically, the investment thesis for the new investor class must possess both a positive financial performance and a positive mission outcome. This is the right result.
As we assess the technical advances and achievements from innovation, we are mindful that the outcomes need to satisfy both critical objectives. This result will drive stiffer competition and produce investment focus in the best technologies with the greatest likelihood of implementation and success.
-- John Shire is Partner in the Corporate Department of the Washington, D.C. office of Seyfarth Shaw and is the head of the Impact Investment practice.