HOUSTON, Oct. 27, 2020 /PRNewswire/ -- In the wake of COVID-19 and the social justice movement environment, wealthy investors are paying much more attention to the social element of ESG, specifically how companies treat their employees and respond to political issues. According to a recent survey by Crossmark Global Investments, a leading provider of values-based investment solutions, 59% of investors say their decision to invest in a company would be impacted if that company made significant layoffs due to the pandemic, but the management team did not take pay cuts.
The nationwide survey of high net worth investors revealed findings about how investors view a company's actions when making investment decisions. More than half of investors surveyed (56%) said they are paying more attention to how companies treat their employees this year. Investors also place a high level of importance on corporate actions taken relating to sexist and racist remarks made by a company's employees. More than half of millennial respondents (ages 18-34) said that an employee should be terminated for making a racist (61%) or sexist (55%) comment. Within the baby boomer generation (ages 55+), less than half of the respondents said a person should be terminated for making a racist (38%) or sexist (32%) comment. This was more pronounced among women, with roughly half (47%) of female respondents across all age groups saying they would be less likely to invest in a company that did not terminate an employee for those actions.
"The events of this year have shed a new light on how companies treat employees and handle certain situations. Investors are paying more attention to the ethical standards of a company when making an investment decision" said Michael Kern, President & CEO of Crossmark. "While most of our clients at Crossmark are invested with us because they prioritize investing based on their values, it's wonderful to see investors starting to take action more broadly across the board."
Companies Response to Political Issues Impacts Investor Decision Making
In addition to paying attention to how companies handle inappropriate behavior by employees, three-quarters of investors indicated that a company's response to political issues plays a large role in whether or not they will invest in the company.
79% of investors over the age of 55 stated they are more likely to let a company's response to political issues impact their decision to invest in the company. Millennial investors also place a large emphasis on how a company responds to political issues, with 69% saying it will impact their investment decisions.
Philanthropic Efforts Becoming More Visible to Investors
Younger investors (ages 18-34) are more inclined to pay attention to a company's philanthropic efforts when it comes to whether or not they will invest in the company. More than half (60%) said a company's philanthropic efforts impact their decision to invest in the company compared to 43% of investors aged 55+. In terms of purchasing products or services from a company, 62% of millennials said the philanthropic efforts of a company have an impact on their decision making.
When it comes to measuring and researching those efforts, the majority of respondents said they either reviewed the company's website (38%) or looked for news coverage of the company's diversity efforts (32%). Less than twenty percent (19%) spoke to a financial advisor.
Investor Expectations for ESG Performance in a Down Market
In terms of ESG performance in turbulent times, younger investors were the most optimistic. Nearly half (44%) of millennial investors believe ESG outperforms in a down market, compared to 9% of baby boomer investors. In the 55+ age group, 16% of female respondents believe ESG does not outperform in a down market, compared to 46% of male respondents.
About Crossmark Global Investments
Crossmark Global Investments is a boutique investment management firm that provides a full suite of investment strategies to institutional investors, financial advisors, and the clients they serve. For over 30 years we have delivered uniquely-constructed products based on our proprietary, disciplined, and repeatable process. We are especially known for helping our clients align their investments with their values by creating socially-conscious, responsible investment strategies.
The survey polled 1,269 high net worth investors age 18+ with investible assets of at least $250,000. Fieldwork was undertaken between September 11th – October 2nd 2020. The survey was conducted online.
SOURCE Crossmark Global Investments