The Greta effect? Half of parents feel pressured by their kids to spend their money ethically – and many want to invest it that way too
- Almost half of parents feel pressured to live more sustainably
- A Wealthify survey reveal children now understand what ethical investment is
- While more parents are saving, over half say it stretches their finances
As negotiations came to a close at COP26 last week, young activists took to the streets in protest at the watering down of the draft agreement.
Thanks in large part to climate activist Greta Thunberg, the younger generation is more aware than ever of the effects of climate change and now they are starting to pressure their parents to act and invest more sustainably.
A survey of 1,000 parents by investment service Wealthify revealed almost half of parents feel pressured by their children to live more sustainably.
Children are pressuring their parents to live and invest more sustainably
And it’s not just environmentally conscious teenagers piling on the pressure: Wealthify’s research shows one in six parents of children under the age of six have been asked whether something they’ve bought was ethical.
Children are now also far more aware of the role investment plays and have a strong grasp of financial subjects, according to the survey.
Nearly half of parents say their children have a good understanding of saving money, while one in five parents say their children understand what ethical investing is.
Ethical investing has become increasingly mainstream with the proliferation of ESG funds: figures from the Investment Association (IA) reveal that responsible funds have taken £6.7billion of investment in the first half of 2021.
That is some £2.4billion more than the previous year.
A fifth of parents who have put money away for their children have opted for an ethical fund and nearly half of parents who have not started saving for their children are considering it.
Despite this there remains a limited awareness of green investment opportunities, with 32 per cent saying there are not enough options and two in five saying they are not sure what is available.
Wealthify chief executive Andy Russell said: ‘We know from our research that making choices about savings can be challenging for parents who are juggling multiple priorities.
‘However, those who remain in cash savings accounts will continue to see their money eaten away by inflation if they choose to do nothing about it.
‘Now, increasingly, there is added pressure from children who are asking them to do it ethically… [Young people] are a force for good in accelerating change, so we must listen and learn from [them]. If COP26 has taught us anything, it’s that the next generation has a voice on ethical issues, and they are using it.’
While parents may be increasingly responsive to their children’s ethical demands, over half say it stretches their finances.
Currently just over three quarters of parents say they have saved money for their children.
On average they are saving just over £76 a month for each child, rising to £86 per month for those who have children under six.
But the vast majority of parents are not utilising the available options; just a third of parents save into a Junior ISA (JISA) for their children, of which there are ethical options.
Russell added: ‘Parents can start investing [in a JISA] from as little as £1, making it genuinely affordable for those who, up until now, might have thought investing wasn’t for them.’