Millennials are coming of age and now make up the largest percentage of the U.S. population – which means they are set to make up an increasingly larger percentage of total individual investors – and this socially conscious generation is saying they want to support companies that strive for prosperity which means not just a wealthy few but rather the well-being of many. These purpose-focused young adults aren’t the only ones putting their money where their mission is. Historically wealthy families and financial institutions are investing in purpose too. Take the Rockefeller Brothers Fund for example, which committed to divest from fossil fuels. Purpose-driven investing is more than table stakes; it’s influencing substantial amounts of capital and positioning your brand to stand out as a sound monetary, as well as social, investment can help your business attract funding and increase financial performance.
Whether environmental and social business considerations – or Socially Responsible Investing – increase returns has been a topic of research and debate for several decades (though the movement itself wasn’t officially coined Impact Investing until 2007 at a meeting held by the Rockefeller Foundation). Studies show the numbers back the notion that purpose supports profit. Researchers from the Deutsche Bank and the University of Hamburg reviewed over 2000 empirical studies to assess the correlation between Environmental, Social and Governance (ESG) metrics and Corporate Financial Performance (CFP) and found that in 90% of cases studied ESG showed a non-negative relationship with CFP. Further, a recent Legg Mason survey found that over 43 percent of high net worth individuals and 56 percent of millennials would like to invest more in ESG assets. and 82% and 88% of each group respectively would like to learn more about them. So if you’re looking to raise capital for your business, be it from individuals, venture capitalists or institutions, be sure to take full advantage of the storytelling potential of your purpose-driven mission (as well as quantitative data to back it up), to entice investor interest by showcasing your brand’s ability to scale profits and impact.
By following these 5 steps you can leverage your purpose to make your company more attractive to investors and improve financial performance:
Investors – from individuals to institutional giants – are seeing the social and financial value of aligning purpose with profit and it’s increasingly important for your brand to define, measure and share your purpose driven-mission for the benefit of humanity and your bottom-line.
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