Attributed to Jasper Judd, Co-Founder and Trustee, Global Returns Project
Comments on millennial wealth often focus on unfavourable comparisons to Baby Boomer prosperity. But while Boomer affluence remains indisputable, millennials’ control of global assets continues to rise. With millennial wealth already topping $24trn, financial institutions have not ignored this shift in fortunes. Instead, those institutions have already worked to attract millennial attention with ESG options that recognise millennial concerns about the Climate Crisis.
To continue adapting, financial institutions can offer similar options for clients to support not-for-profit climate solutions. Normalising that support gives millennials another powerful mechanism to mobilise their assets for climate action.
Millennials’ economic influence and interests
The ‘millennial’ generation has long been plagued by perceptions of financial frivolity or misfortune. From failing to save effectively to drowning in student debt, millennials are often imagined as a global cohort incapable of economic heft.
A recent report from UBS calls many of these assumptions into question. Estimating millennials’ combined wealth at approximately $24trn, the report identifies the younger generation as an emerging powerbroker in the global economy. Driven already by income growth and entrepreneurial activity, this accumulation of assets will only increase in the wake of ‘one of the largest intergenerational wealth transfers ever’. A report from Accenture suggests that in North America alone, inheritance from Baby Boomers may top $30trn by 2050.
Rounding out this portrait of millennials’ financial power is a generational stereotype that has held true. Millennials pay attention to purpose: acting personally and professionally with a set of values in mind.
As a purpose for taking action, tackling the Climate Crisis consistently tops the list of millennials’ global concerns. Deloitte’s most recent Millennial Survey identified the durability of this climate concern even in the wake of COVID-19. Despite the ongoing pandemic, the issue of climate change and protecting the environment remained essentially tied with health care and disease prevention for millennial respondents in mid-2020.
Sustainable options from financial institutions
Faced with millennial wealth and climate consciousness, financial institutions have already adapted their outreach. Sustainable investing and ESG options offer important opportunities for savers and investors to protect the planet. A recent report suggests that global sustainable investment had reached $30.7trn in 2018, up 34% from 2016 levels.
Millennials already make up a significant portion of that total. 95% of millennials report interest in sustainable investing, and a staggering 67% have been involved with one or more sustainable investment activity. In the coming years, this engagement will only increase.
The need for climate not-for-profits
To further adapt to millennials’ economic influence and interests, financial institutions can also offer opportunities to support not-for-profit climate solutions.
ESG and sustainable investing allow market forces to encourage important climate action. But markets are not all-powerful. No market solutions exist for suing polluters, protecting rainforests, or accelerating clean energy to the billion people with no power. Not-for-profit organisations perform these critical tasks.
Take the environmental charity ClientEarth as an example. In September, the organisation was instrumental in accelerating the closure of Poland’s Belchatow power plant: the single largest greenhouse gas-emitter in Europe. This victory reminds us that not-for-profits play a key role in climate action – a role that for-profit organisations cannot fulfil.
In their effort to engage with millennials, financial institutions can acknowledge the role played by climate not-for-profits and provide their clients with simple ways to support them. Climate-conscious millennials will take advantage of an opportunity to channel their assets into issues beyond the reach of ESG initiatives.
An option to Reinvest in Earth
The Global Returns Project has coined the term ‘Reinvesting in Earth’ to describe that simple way for individuals with assets to support climate not-for-profits. When an individual Reinvests in Earth, they commit at least 0.25% of their savings and investments annually to funding not-for-profit climate solutions.
Financial institutions could make Reinvesting in Earth normal and easy by offering it as a tick-the-box option for clients. In addition to attracting millennials, normalising this regular, proportional funding could raise remarkable sums for the climate.
Globally, private individuals hold approximately $140trn in assets. If just 3% of those individuals Reinvested in Earth, they would raise $10bn every year for critical climate solutions.
Despite stereotypes to the contrary, millennials play an increasingly powerful role in the global economy. While ESG initiatives have proven popular with this younger demographic, financial institutions can also incorporate climate not-for-profits into their options for clients. Normalising the practice of Reinvesting in Earth gives millennials the ability to support non-market climate solutions with their assets.
The Global Returns Project:
The Global Returns Project (GRP) is an initiative from the Climate Crisis Foundation which seeks to transform the way we use private assets, by normalising “Reinvestment” in Earth.
It was founded in 2019 by finance gurus Yan Swiderski and Jasper Judd, after they grew frustrated by the lack of support being given to climate-initiatives.
With its unique funding structure depending on the commitment of assets rather than income, the organisation hopes to turn the table on traditional philanthropy and make it easy for individuals to fund not for profit climate solutions, whilst also encouraging financial institutions to make such reinvestment normal and easy for their clients.
Now that the COVID-19 pandemic has moved the Overton window for what we understand as achievable social and policy change, the next decade could prove fertile ground for climate change initiatives. As such, the Global Returns Project has set itself a target to raise 10 billion dollars per year for environmental causes. These funds will then be divided between the organisation’s partners, all of whom are identified via a rigorous selection process as the most highly effective climate solutions. Current partners include Ashden, Client Earth, Global Canopy, Rainforest Trust and Trillion Trees.
Jasper Judd Biography:
Jasper Judd is co-founder of the Global Returns Project. A Cambridge graduate and Chartered Accountant, he has held several senior finance, strategy and innovation roles in large listed global business throughout his career.
In recent years, however, Jasper has been increasingly focused on the Climate Crisis and what people with professional backgrounds can do to make a difference. Spurred by the desire to build a brighter future for his children, he decided to co-launch the Global Returns Project where he uses his financial expertise to empower people to easily fund not for profit climate solutions.