2020 was a pivotal year for environmental, social and governance (ESG) investing, with record inflows into ESG products rising 140% in 2020, per Moody’s Investors Service. Investopedia and  data also show many investors began using ESG principles to make 𒈔investment decisions for the first t♍ime.

In a survey of Investopedia and Treehugger readers, a majority or 58% of respondents reported that their interest in ESG grew in 2020, and nearly a fifth or 19%, begꦰan incorporating ESG stan❀dards into their portfolios during that period.

Most ESG Investors are🐠 Relatively New to 𓆉ESG Investing

More than half or 62% of ESG investors surveyed took up investing in ESG-related products within the last five years. Less than a fifth or 21% have over a decade of ESG-inve🌸sting experience.

ESG investments are also likely to grow going forward, wit𒀰h just over two-thirds or 67% of respondents claiming they plan to invest more in companies with strong ESG initiatives over the next five years.

Millennials and Younge𓂃r Investors Lead ESG Enthusiasm for Values and Profit

Although most generations of investors who responded to the survey want to invest in ways that align with their values, younger investors were slightly more likely to say they incorporate ESG principles than older generations. About 64% of millennials and younger investors report that they believe those principles will become standard in the future. By contrast, less than half, or only 42% of Boomer and older generations felt the𝔍 same way. 

Generation X investors, however, were both slightly more likely to identify that they want to invest in ways that align with their values𒅌, and belieওve they are “voting” with their investments.

Data by Amanda Morelli/Adrian Nesta.